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How Flexible Business Energy Contracts Work

How Flexible Business Energy Contracts Work

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Last updated: 20 May 2020

Every business is different, and so are their energy requirements. Your business can’t go without power, and a chunk of your income will always go towards gas and electricity costs. Luckily, there are many things you can do to reduce your business energy bills.

One of these is making sure that your energy deal is right for your business. As a business owner, you’ll have to take a few things into account before you decide what sort of tariff to go for. You’ll need to consider your location, your energy needs, and of course your financial situation.

As always, to make sure your hard-earned profits aren’t spent in the wrong places, it’s important that you compare prices to get the best business energy deals.

What Options Do You Have?

A flexible tariff is one that can change in price, similar to a variable rate tariffs for domestic energy. Flexible tariffs can offer cheaper energy rates at the time of agreement, but you won’t be protected if energy prices rise in the future. Flexible tariffs fluctuate depending on the wholesale energy market. Typically, if you go for a flexible tariff, your business energy is supplied on a contractual basis and the terms can last as long as three years.

There are two main types of flexible tariff agreements:

  1. A tracker price tariff which changes based on market movements.
  2. A ‘blend and extend’ tariff that temporarily fixes your payments by taking an average of your contractual rate and the current market rate.
A fixed-rate tariff is when the unit cost of energy that you pay is fixed. This means that whilst the terms that you agreed with your supplier stand, your gas and electricity prices will not be affected by the energy market. You may also get small discounts if you pay monthly via direct debit. Fixed-rate tariffs are good for businesses where budgeting is key. However, when you’re on a fixed-rate energy contract your supplier may not let you get out of it easily. There may be better energy deals available on the market while you’re still tied into your contract, and the cost of wholesale energy could go down. Both flexible and fixed-rate tariffs usually come with a 12-month minimum term.

If you’ve seen changes in the energy market, or you’re unhappy with your current energy supplier, it’s important to remember that you don’t need to stay with the same company. Often, business owners can be put off making a change as the process can seem difficult and complicated. In fact, 43% of business owners have never switched energy suppliers. Don’t be one of the 43% - you could consistently make savings for you and your business by switching energy suppliers.

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How Can I Get the Best Business Energy Deals?

Seeing whether or not you’ve got a good business energy deal at the moment is easy. We can show you the best deals in your area within minutes, and you can choose which one works best for you. Simply fill out the form on our site and within minutes you’ll have all the best business energy deals that suit your needs right at your fingertips!

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Danny Lord

Author: Danny Lord

Danny is our Editor-in-Chief, and has been writing news and guides for comparison sites for the last five years.

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Business energy suppliers

There are currently more than 50 energy suppliers to choose from in the UK. Most domestic energy suppliers also offer their services to businesses, including the Big Six, but there are also many firms that specialist in commercial energy supply.

  • Avanti Gas
  • British Gas
  • CNG
  • Crown
  • Dual Energy
  • EDF Energy
  • E-On
  • Gazprom
  • Npower
  • Octopus
  • Opus Energy
  • Scottish Power

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