There are different ways to lower your business electricity expenditure, one of which is sourcing better electricity deals from providers for your business. Electricity may be a requirement in your daily operations, but that doesn’t mean that you have to spend more than necessary on this service. The key to securing bigger energy savings is knowing how to compare the different business electricity rates offered by various energy providers.
Comparing Energy Rate Tariffs
Energy rates can either be on a fixed or flexible tariff. Fixed rates apply the same rate throughout the entire contract period, while flexible or variable rates mean you’ll be charged at different rates at different times throughout your contract, depending on the state of the energy market.
A fixed business electricity rate can be beneficial for businesses that want more predictable energy costs throughout their contract period. As long as your energy usage remains more or less consistent, your electricity bill will also stay the same, more or less. On the other hand, flexible or variable rates allow businesses to take advantage of months where energy prices take a dip. Obviously, though, you’re taking something of a risk as your energy spending will increase during months when the market price is trending upwards, regardless of whether or not your energy usage stays the same.
It’s also worth noting that a fixed-rate contract will tend to come with a sometimes-hefty exit fee if you decide you want to switch to a different energy plan or provider before the contract period ends.
Comparing Energy Providers
Different energy providers offer different business electricity rates per kWh depending on how the length of the contract period you sign up for and the type of energy you want. For instance, some providers offer lower rates for clients who sign up for longer than the usual 12-month contract.
Some energy providers deal mainly in renewable energies if you want to increase your business’s drive towards environmental friendliness, and there are a few who offer a mix of both renewable and non-renewable energies too.
If your business uses gas as well as electricity, you may have the option of choosing between a dual and a single contract. A dual contract means simply that a single provider will be providing both your gas and electricity. Although dealing with a single provider can be more convenient in terms of administration, it could also turn out to be more expensive. Some providers may offer either lower gas or lower electric rates, but not both. If you want to take advantage of the lowest rates for each utility, then a single contract for gas with a separate contract for electricity split between two providers could be the cheaper choice.
Working With the Right Partners
Knowing which of the many electricity suppliers to opt for still remains the best way to get the most competitive business electricity rates in the UK. An independent consultancy firm can help you find the energy deals that match your business’s unique circumstances and will offer you maximum savings without sacrificing any of the efficiency and proper workflow your business needs.
And some consultants, like Smarter Business, for instance, will not only research your energy use and the markets and recommend a list of energy quotes that match your budget. They can also recommend the changes that you and your staff can make around your premises and working processes to ensure that your business practices are as energy-efficient as possible.
FREQUENTLY ASKED QUESTIONS
Is business electricity rate cheaper than domestic rate?
Yes, the average business electricity rate is cheaper than domestic rates, typically due to the higher amounts of energy businesses use. However, most business customers pay a higher rate of VAT (20% instead of 5% for domestic electricity), and other costs may apply, like the Climate Change Levy (CCL), for instance.
How do I change my business energy supplier?
If you’re still within the contract period, you may need to pay an exit fee. Notify your supplier as soon as possible that you intend to change to a new provider. Tell them when you want to switch too. Provide the latest readings when requested; and pay any outstanding bills when they arrive to avoid harming your business’s credit rating.
What is a good price for business electricity per kWh in the UK?
In the UK, the average annual business electricity bill is £3,061. The average unit price per kilowatt-hour for businesses is 14.36p per kWh, while domestic consumers pay on average around 17.2p per kWh. Also check the supplier’s daily standing charge, though. Across UK suppliers, this can cost between 5p and 60p daily, which can make a big difference.
How much electricity does a small shop use?
Obviously, it depends on the type of business and the ways in which you use electricity. A bakery or hairdressers may use much more power than a gift shop, for instance. Most small businesses use on average between 15,000 and 25,000 kWh per annum. A microbusiness may only use around 5,000 to 15,000 kWh.
What sources and appliances consume the most in business electricity?
Some of the biggest contributors to the business electric power costs of a commercial establishment include the following:
- Air conditioning
- Computers, laptops, printers, and the like
- Heating systems
- Office lighting fixtures
- Telephones, routers, modems, and other communication devices
- Water heaters
Tips for Switching Business Electricity Suppliers
It makes sound business sense to switch electricity suppliers if you can obtain lower business power prices. However, you do need to be sure you’re getting a better deal, otherwise, you may find yourself tied into a lengthy contract that costs you more. With this in mind, here are a few things to check before switching business electricity suppliers:
- Review the contract carefully. Check the small print, especially if prices are low, for hidden charges and large penalty fees for early exit from the contract.
- Ask the supplier lots of questions. Check how often you’ll be billed, whether your business energy charges can change mid-contract, and what the cancellation fee would be if you found a cheaper deal elsewhere.
- Don’t skip the details. It’s a business decision – don’t leave anything to chance. Check reviews from other clients to make sure customer service is good, and the company is contactable if you have a query, for instance.
Simple Ways to Reduce Business Energy Costs
If you own a business, you’ll want to be reducing costs as much as possible so you can plough the money saved into other areas of the business. As well as doing a market-wide business electricity rates comparison, here are several other things you can do to help reduce your energy consumption expenses:
- Establish a turn-it-off-as-you-go routine.
- Maximise daylight – nature’s a free resource!
- Invest in renewable energy sources.
- Keep your air con in good condition.
- Book an energy audit from an expert consultancy.
Even these small things can offer significant savings that will benefit your organisation in the long run. Being proactive will take your energy-saving game to another level – you just need to know the simple steps you can take to reduce your energy usage.
Smarter Business is here to help you save money, not just on electricity but on all your utilities and more. Head over to our homepage to learn more about our wide range of cost-cutting services.