Finding the Best Electricity Deal for Your Business
Share this guide:
Last updated: 20 May 2020
Running a business isn’t easy. It’s not cheap either. There are so many costs involved, from staff salaries and rent to supplies and insurance. It can be easy to overlook gas and electricity costs, but energy can in fact be one of your business’s biggest overheads.
The average small business in the UK spends around £5,000 a year on electricity. But in such a highly competitive market, comparing prices and switching suppliers could save your business thousands of pounds a year.
Getting a business electricity deal
is not the same as getting one for your home. With businesses, quotes are normally bespoke and personalised, so the deal you get depends on the specific circumstances of your business. This guide will go through what tariffs you can get, how switching works and what you can do to get the best and cheapest electricity deal for your business.
How much can I save by switching?
It’s difficult to give an estimated figure on how much you could save on your electricity bills, as each quote is specific to your business. The amount you pay will ultimately come down to how much electricity you use. This will depend on the size of your business, from how many people work there to how much electrical equipment you use, from lighting to computers. The tariff and prices you can get also depend on where your business is located.
Enter your details into our form, and we will get in contact with you to ask you a few questions about your business. We will then provide you with a list of the best tariffs available that you can compare and then choose the one that works for you.
What kind of tariff can I get?
When getting an electricity contract for your business, you can either get a fixed rate tariff or a flexible tariff. Fixed rate tariffs are more common, and they are generally better value for money than flexible tariffs.
With a fixed rate tariff, you are protected from future price hikes in the wholesale cost of electricity, as the price you pay for your energy stays the same for a set period. However, if the wholesale price of electricity was to fall during your contract, your business won’t benefit. Fixed rate tariffs for business electricity usually run for a minimum of 12 months.
You can also get a variable rate tariff, which will go up and down depending on the wholesale cost of electricity. They are typically less competitive than fixed rate tariffs. The main benefit of getting a variable rate tariff is that you’re often tied in to a much shorter contract than fixed rates, so they can be good if you’re planning to move premises in the near future. You can get 28-day contracts, or rollover contracts
which renew automatically until you cancel it yourself.
If you’re not on a rollover contract, you could be moved onto a deemed rate once it ends. These are usually much more expensive, so when your contract is nearing completion you should start to compare business electricity prices
as soon as possible and make the switch.
You could also go for a smart meter
, with which your electricity usage will be recorded in real time and sent to your supplier, ensuring they bill you accurately. The government plans for smart meters to be offered to every home and small business by the end of 2020.
When you’re getting an energy deal for your home, you can get your gas and electricity supply under the same contract, known as a dual fuel tariff
. But this isn’t the case for businesses. Because every business has their own specific needs, gas and electricity tariffs for businesses must be found separately.
What should I be careful of?
When signing up to a new electricity contract with your supplier, make sure that you’re fully aware of the terms and conditions before you sign. Unlike domestic energy
, there’s no cooling-off period. That means once the contract is confirmed, you’re tied in until the end of the term.
You should also be aware of any exit fees. Fixed rate tariffs will tie you in for at least a year, and you will be unable to leave in the middle of your contract without paying a penalty.
You also need to keep on top of your dates and know when your current deal is coming to an end. Unless you’re on a rollover contract, your supplier will move you onto their deemed rate tariff, which will likely be much higher than what you were paying previously. Give yourself at least a month before your contract ends to look for a new business electricity deal
How do I find the best electricity deal?
To get the best business electricity deal
, you need to shop around and compare tariffs. Many businesses in the UK can save thousands of pounds a year by switching their energy supplier.
First of all, you must provide us with a few details, such as your name, company name and email address. We will then get in touch with you to ask you some more questions about your business, such as its current energy supplier and tariff and its typical energy usage. We will then provide you with a list of quotes that you can choose from.
You need to look at the unit cost of electricity, as the lower this is, then the more you will save. The amount you spend on your bills will still depend on how much electricity you use, but you can keep the costs down by choosing a tariff with a low unit cost.
If you’re calling the energy suppliers directly, it’s possible to haggle with them over the phone to negotiate a better price. Ofgem doesn’t allow people to haggle over their household energy, but in the world of businesses everything’s fair game.