How Does Business Electricity Pricing Work?

Business electricity bills can be astronomical, but it doesn’t have to be that way. Here at Smarter Business, we live up to our name by helping you to find the best prices for your utilities. That allows you to use those savings to grow your business further instead.

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Understanding Business Electricity Pricing

when to switch business electricity suppliers
A number of factors affect business electricity prices, regardless of whether you’re running a small business or a large enterprise. While the wholesale energy costs tend to be lower for businesses, they typically consume far more energy than the average household would. In addition, other factors contribute towards bigger bills for businesses, such as a higher rate of VAT charged and environmental levies. These all impact on the total price, but there are often significant savings to be made if you understand business electricity pricing and know how to evaluate which is the best deal for your company’s unique circumstances.

So, what makes up the total electricity price that businesses pay?

  • Wholesale energy cost or raw energy cost
  • VAT charged at 20% (domestic customers pay at 5%)
  • Transmission or distribution cost
  • Unbilled volumes or losses
  • Environmental costs or levies, like the Climate Change Levy (CCL)
  • Operating costs of the supplier or metering expenses
  • Supplier’s profit
By the time your utility bills reach you, these costs have already been added.

The wholesale costs businesses pay vary between providers in part because it depends on how much electricity they have to route to their clients. As with any other wholesale business, the more electricity is bought, the lower the business electricity prices per kWh will be.

The network costs also cover transmission and distribution. The main provider takes the burden of transmitting electricity where it needs to be sent, equating to additional costs in terms of maintenance and operational expenses.

As for the environmental costs, these are mandated by the government for a good reason. It’s businesses’ responsibility to adopt more sustainable practices. Environmental levies help energy providers become more responsible in their own practices as well.

Other costs include taxes and other operating costs involved in suppliers transmitting energy to your business.

why is business electricity important

How We Can Help You Reduce Your Energy Costs

Here at Smarter Business, we help you run your business in a smarter way by driving down your energy costs. We have been assisting businesses across the UK to find the best business electricity deals for their own unique needs for years, helping them to save thousands of pounds. With our intervention, our loyal customers have switched electricity providers and saved so that they can divert that extra money into more important aspects of their business, rather than spending it on utilities.

Here’s how our services can help you:

  • We do all the research

    We save you the time and effort of researching what’s on offer from each provider by doing all of that for you. Because we understand how providers work, we are able to tap into every possible deal they offer and how each of these could benefit you based on your usual energy consumption.

  • We analyse the data and recommend the best deals

    We don’t just look for the cheapest rates. We also analyse those and the terms and conditions that come along with them. Often, people only see the low rates and fail to factor in how these might change over the longer term of the contract and beyond. They also might not consider other conditions that come with these energy products, such as whether you’re opting for an introductory rate that will go up after a period or the length of the contract. We look at long-term results based on your needs and recommend which ones would benefit you financially over a longer time period.

  • We help you apply best practices that trigger long-term efficiency

    We don’t just help you find great business electricity rates – we also create utility management plans that further decrease your utility costs. This ensures you’re future-proofed in terms of using less energy and therefore paying less over time, regardless of changes in the market.

    The ultimate goal here is to avoid all unnecessary costs so that this extra resource can be diverted into other aspects of your business.

Smarter Business Practices to Minimise Electricity Usage

With our help, you can make your business practices more sustainable while also improving your financials by saving on electricity costs. Here are just some of the many ways you can save on energy costs while growing your business:

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Switch to energy-efficient appliances

Did you know that a single LED light only uses 5 watts to give out the same amount of light that a halogen does at 30 watts? That’s an 85% decrease!

In some cases, businesses opt not to switch to more energy-efficient equipment, simply because the initial outlay appears to be more expensive. But bear in mind that buying such appliances and equipment is a one-off cost. If you compute the amount you will save over the longer term, the benefits will become apparent.

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Make sustainability part of your business practices

Even more than the kind of equipment you use, the way that you and your employees use energy matters. Many employees are not aware of the impact of their actions, especially when it comes to your business’s energy usage.

When businesses become more intentional about sustainability, they contribute not just to their own financial health, but to that of the earth as well. Including simple yet sustainable practices in policies, like shutting down office equipment and other electrical fixtures when not in use, really can make a difference.

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Perform regular energy audits

Energy audits give you opportunities to further reduce your overall energy usage. You may have the right intentions, but it’s less effective to transition into energy-efficient practices without knowing the current state of your business’s consumption and practices.

After an energy audit, you will be given specific recommendations that fit your business. This way, you can monitor the successes against the original baseline and be more sure that every step you’re taking is heading in the right direction.

Let us know what kind of changes you want to make in your business, and we’ll help you make it happen. Remember that choosing the best electricity provider and the best business electricity prices is just one part of the entire process. By using our services as a business energy broker while also allowing us to come up with a solid utility management plan, we can help you build sustainable practices that benefit your business, your employees, and the community around you.
Interested in finding out how to get started? Call us here at Smarter Business at 01444 220060 or email us at info@smarterbusiness.co.uk and let us know how we can help you. We have a wide range of services, including sourcing the best business electricity rates, all designed to help you grow your business in the smartest way possible.

FREQUENTLY ASKED QUESTIONS

What is business electricity?

Business electric tariffs are types of energy deal created for business purposes. You can request bespoke quotations from suppliers and can negotiate better rates than home energy users. However, business contracts tend to last longer and offer less flexibility to switch.

What is a good rate for business electricity?

On average in 2021, the price of business electricity begins at 12.66 pence per kWh. Small business electricity prices tend to be higher at an average of 15.10 pence per kWh, while big businesses are currently paying around 11.76 pence per kWh.

How do I change my business energy supplier?

Here’s how you can switch business electricity supplier with the help of an energy broker:

  • Read the terms of your existing energy contract
  • Locate a current energy bill for your business
  • Contact an experienced broker
  • Confirm the best deal for your needs
  • Await your business energy switch

How much can you save by switching to an energy supplier?

It’s estimated some businesses can save up to 45% a year by simply switching energy supplier. While you may not achieve this rate of saving, it does emphasise that comparing providers and taking the time to research the best deal could be worthwhile. If you don’t have the time or knowledge of the market, an energy broker is invaluable.

Can I cancel my business electricity contract?

Yes, by calling your businesses electricity supplier for this. You can usually do this within 30 days of the contract’s end date. You can send a termination notice to your supplier at any time, usually with 90 days’ notice. You may have to pay a penalty if you’re still within contract – check the terms and conditions.

Is electricity cheaper for businesses?

Electricity rates for businesses are based on their size and electricity consumption. Business electricity unit prices tend to be lower than domestic costs, simply because of the higher amount of energy they use. However, overall, the majority of business customers pay higher rates of VAT (20% compared to 5% for domestic users).

How can businesses reduce electricity costs?

Simple tips to reduce business electricity costs include:

  • Switching off lights that aren’t in use
  • Buying energy-saving light bulbs
  • Consider using fluorescent bulbs, which use 10% less energy than traditional bulbs
  • Hiring an energy broker like Smarter Business to explore suppliers’ deals and find the best one tailored to your business’s needs and usage

What businesses use the most electricity?

The following tend to use the most in terms of electricity:

  • Restaurants, convenience stores, and grocery shops are considered to be some of the highest energy consumers
  • Car dealerships are open long hours, and lighting is critical to how products are displayed
  • Office buildings, residential buildings, hotels, and motels

How long does it take to switch electricity providers?

It may take as long as three months to completely switch the provider of electricity for your firm. This is because electricity meters tend to be read on a quarterly basis and your new provider will need an accurate reading before they bill you.

What should I look for when choosing an energy company?

What to consider when hiring a provider of electricity for companies:

  • Their business electricity rates in the UK
  • Their reputation for customer service
  • The flexibility or otherwise of their contracts
  • Whether or not they provide green or renewable energy
  • What happens to prices once the contract ends

Using an energy broker takes the guesswork out of choosing an energy company.

Smart Ways to Minimise Business Electricity Usage

Here are some tips to lessen your business electric power consumption:

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Buy energy-efficient appliances.

The smartest way to save energy is to invest in appliances that are made to do just that. Having energy-efficient appliances in your place will keep your power consumption at a minimum.

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Make the most out of natural sunlight.

If your office has an area where the natural light comes in, then it’s better to take advantage of that than turn lights on. Natural light is also better for employees’ well-being.

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Use fans instead of an AC system.

Shut your AC off a few days a week and use fans to keep the space cool. Offices, warehouses, showrooms, and kitchens can all benefit from this.

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Hire in an energy audit.

An energy audit will keep track of electricity consumption and include professional advice on how to reduce it.

Top Common Uses Of Electricity In Business

Common appliances in a business that uses energy at business electricity rates include but are not limited to:

  • Air conditioners
  • Heaters
  • Water heaters
  • Office lights
  • Printers, computers, and laptops
  • Telephones, modems, and routers
  • Dishwashers and refrigerators
  • TV and game consoles
Eye_appliances
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Tips on Getting the Best Business Electricity Tariffs

To source the best business electricity tariff:

  1. Check your current tariff so you can compare rates
  2. Find out when your contract ends to avoid being re-enrolled in a disadvantageous new one
  3. Decide how long you want your new contract to last
  4. Research new suppliers, including smaller suppliers and suppliers who are new to the market
  5. Read reviews on suppliers you’re thinking of using
  6. Check your business electricity profile class to ensure you’re signing up to the right tariff
  7. Understand your current usage and patterns of usage
  8. Check your business’s credit rating
  9. Pay by direct debit to save money.

If you don’t have the time or inclination to do all of the above, a professional energy broker can find you the best deal for your circumstances.

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Dos and Don’ts When Switching Electricity Providers

where to find a business electricity supplier

What to look for when switching business power providers:

  • The ease of transferring. Don’t accept a provider who offers a complex, lengthy transfer process.
  • Avoiding common pitfalls. Look beyond low initial prices to what happens when this promotion expires. If costs spike, avoid the deal. Watch out for contract auto-renewal as this is also likely to be disadvantageous.

For an easy and stress-free switch of business energy provider that will save you money, request a quote from Smarter Business now. Our knowledgeable team of professionals will guide you through your transfer every step of the way.

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We’ll provide you with a list of providers, plans and tariffs that suit your needs, are available in your area and show clear cost savings. You can then make an informed decision on the plan you would like to switch to.

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With all the hard work taken care of, you can sit back and enjoy saving on your gas and electricity bills. It’s recommended that you run comparisons regularly, or at least as a current contract reaches its end, to continue benefiting from savings.

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When you work with Smarter Business, you benefit from all of our Energy Services:

Switch to a Smarter Gas Supply Deal

If gas is a requirement of your business operations, a gas supplier comparison can identify some huge cost savings. When you’re searching for a deal, it’s not always advised to go for the cheapest price available but, instead, one that is suited to your individual business, its needs and its functions.

What is the best solution for you – We take into consideration the size of your company, your gas usage and your current tariff when drawing comparisons, which then provides you only with the relevant information to help you make an informed decision.

Save up to £2000+ on Business Electricity Rates

As your business relies on electricity, it is essential that you can rely on your electricity supplier. We make finding the right rate for your business as easy as possible, ensuring you get the best possible service at the most reasonable price.

Why choose us – With so many options available, we iron out the complexities involving tariffs, business size and usage rates, running comparisons that leave you with all the information you need to do what’s right for your business.

Whether you’re on a fixed rate, deemed rate or rolling contract, or your business is large or small in size, there’s always a chance that you could save money by switching electricity suppliers.

Get the best business electricity & gas deals

ELECTRICITY

We are the energy experts

Our team has been helping UK businesses save thousands of pounds for years by reviewing their energy contracts. We have acted as an energy consultant for companies of all sizes.
Switching gas suppliers and getting better electricity deals has enabled our customers to make more funds available for other areas of their company and to grow their operations.

Book Your FREE Energy Saving Consultation Today

Get the best business electricity & gas deals

ELECTRICITY

We are the energy experts

Our team has been helping UK businesses save thousands of pounds for years by reviewing their energy contracts. We have acted as an energy consultant for companies of all sizes.
Switching gas suppliers and getting better electricity deals has enabled our customers to make more funds available for other areas of their company and to grow their operations.

Business gas and electricity tariffs explained.

Unit rates for business gas and electricity are typically lower than domestic prices, although VAT is charged at a higher rate. Prices are dependent on business size, location and consumption and there are the different tariff plans and contracts available:

Fixed Rate

For fixed rate energy tariffs, the unit price for gas and electricity will remain the same for the entire term of the contract. Contracts are usually 12 months long but can sometimes last for up to 3 years.

As it’s the unit price that is fixed, bills can vary depending on your usage of gas or electricity each month.

This tariff is beneficial for businesses who want to stay on top of their utility expenditure, while being protected from any energy price increases. However, a downside of this is that you won’t benefit from any decreases in energy prices.

Another thing to consider before opting for a fixed rate tariff is that most of them have exit fees. This is a lump sum penalty charge that is incurred if you switch suppliers before your contract has ended, making it more difficult to compare and save.

On flexible rate tariffs, also known as variable rate tariffs, units of gas or electricity are charged at a rate that reflects market conditions, so they are susceptible to price increases and decreases.

These tariffs are attractive when entered into while market prices are low but they can increase rapidly, resulting in higher monthly bills.

Usually, when an energy deal expires, businesses are automatically switched onto the supplier’s variable rate tariff, which could prove costly if not monitored. When this happens, it’s best for a business to run a comparison to ensure they are still getting the best deal.

Therefore, an advantage of variable rate tariffs is that you are free to switch at any time and no exit fee will be charged.

Deemed rate contracts often have some of the most expensive business gas and electricity rates. They are usually entered into when a business has not yet negotiated a deal with their supplier and roll over every 28 days. As each month passes, your business could experience bill increases.
 
However, these contracts ensure your business is not disrupted by a cut off in energy supply until a deal is negotiated. The 28 day rollover period could mean that in a very short amount of time, your business could benefit from huge cost savings by running a comparison and switching suppliers before the next 28 days commence.

Not all businesses require gas but, if yours does, it is a good idea to consider single and dual fuel contracts.

A dual fuel contract is where you are supplied both gas and electricity by the same supplier and on the same tariff. This is seen as the simplest option for many as it means only having one bill and dealing with only one supplier.

However, for businesses who want to make sure they are getting the best possible deal in terms of cost savings, you can compare single fuel tariffs and take out separate contracts for gas and electricity.

Types of Energy Contracts

FIXED

The best price certainty. All costs withing the contract – including Third Party Charges (TPCs) – are fixed.

Contract price is fixed but can be adjusted during the contract period if suppliers have under-forecast TPCs.

The electricity rate is fixed, but all other TPCs are billed at the prevailing rates.

FLEXIBLE

A Hybrid between fixed and flexible contract. Multiple energy purchases spread the risk of energy procurement.

Energy can be purchased at different times up until the day of supply, with some of the cost determined by the spot price.

A portfolio of customers whose consumption is grouped together to provide access to wholesale energy prices under a pre-agreed, low risk energy procurement strategy.

Business Electricity Comparison

We work with the best business electricity suppliers in the UK and consult numerous electricity tariffs to get the best deals for our clients. Let us compare business electricity rates for you, saving you time and helping you find a contract most suited to your business’ needs. Get an online quote now and start saving on your electricity bills.

Business Gas Comparison

Switch business gas suppliers and improve your bottom line. We compare business gas prices for you and recommend the best deals on the market for your business.

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Green energy suppliers

Climate change is a big concern for many businesses. Whether you’re seeking to reduce your carbon footprint or on a net-zero initiative and aiming to become carbon neutral, switching to a green energy supplier is a logical first step.

Typically, these providers are not the cheapest around but, as demand for sustainable energy increases, a green deal could present savings when compared to your current tariff, so it is definitely worth checking.

Green tariffs work in a variety of ways to meet the needs of different types of businesses. For example, some offer a completely renewable energy supply, while others combine a mixture of both renewable and non-renewable sources. In a similar way, some suppliers promote initiatives like matching your energy consumption by purchasing the same amount of renewable energy.

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