Business Energy FAQ
Business energy is an overhead that most companies have in common. However, unlike with the domestic market, resources around business energy aren't plentiful, leaving many business owners in the dark about commercial energy and making it more difficult to ensure a competitive deal.
The only real difference between business and domestic energy is the way they are packaged and sold. As you know, the best way to reduce the cost of your energy is at home is to compare different, quotes. This can be done easily, online via a price comparison site. It's possible to compare business energy too but not in the same straightforward way.
It's also worth noting that in the business energy market, gas and electricity are treated as entirely separate products, and must be secured under separate contracts. In contrast, domestic customers can pay for their gas and electric under a combined contract if they wish.
Can I save money on my business energy?
If you haven't shopped around for the cheapest deal already, yes. Businesses can save up to 30% on their bills by comparing deals. Make It Cheaper have saved businesses an average of £1,150* on their energy (* Figure based on 6,000 actual contracts arranged in 2016 when compared to prices or renewal quotes of existing suppliers. Saving figure a combination of savings achieved through switching gas and electricity).
What are Fixed Tariffs and How Do They Work?
A fixed term tariff is a contract that sets out how much a business will pay for its energy. This includes a specific price per unit for the gas or electricity a business uses, as well as a daily standing charge that's payable regardless of how much energy a business consumes. The cost per unit and standing charge will not change for the duration of the contract, with these deals typically lasting anywhere between one and four years.
What are Variable Tariffs and How Do They Work?
On a flex approach contract, a business can take advantage of favourable energy market activity by purchasing energy for the months – or years – ahead, usually when costs are low. However, this can be a risky strategy if a business is caught out of contract when energy prices are high.
How Do I Switch My Business Tariff?
For busy business owners, it can be difficult to find the time to dedicate to running a thorough comparison or to switch tariffs.
The good news is that there is help available – even to the busiest of business owners. Through the services of a business energy broker, not only can they help you save money by switching your contract, but they can even save you time.
One short telephone conversation with one of Make It Cheaper's business savings experts is all it takes to learn enough about your business's needs and consumption habits to obtain market wide quotes on your behalf. This means you can have a view of the deals available to you within minutes, and our savings experts can even advise you on the deals that best satisfy your business's needs.
Does it take a Long Time to Switch?
There's no quick self-service way to compare business energy quotes and switch to a better deal. However, there are third-party intermediaries (TPI), like Make It Cheaper that operate to make the process a lot smoother.
Switching your business energy can be both easy and pain free with the help of a TPI. Once the process is underway should take you around 4-6 weeks on average from start to finish. Switch times can however, be impacted by the circumstances of your own business.
How Do I Determine the Best Tariff?
When deciding on a new tariff, it's important to think about your personal business circumstances, as well as price. Most contracts operate on a one, two or three year basis and can be fixed or variable with different payment arrangements attached (direct debit, pay on receipt of bill etc), so it's worth considering what structure is going to work best for your business.
Customer service satisfaction scores may be another element to consider when choosing a new deal as it will impact on how quickly and easily any issues will be resolved, should they occur.
How Much Should I Pay for Business Energy?
There are two main rates that make up your business energy prices – a daily standing charge that you'll pay regardless of how much energy you use, and a set cost for each unit (kWh) of energy your business consumes. The price you pay per unit will depend on your contract's terms, which is why it's important to run a business energy comparison to find a contract that properly suits your business's needs. A thorough comparison will also help to ensure that you're not overpaying on your business energy rates.
How Can My Business Reduce Its Energy Bills?
Other than ensuring you're on the most competitive contract, being energy efficient is the other major way to reduce your business energy costs.
From utilising low-consumption appliances, energy-saving light bulbs and good insulation to instigating changes to the way you and your employees use energy, it's possible to ensure you use only the energy you need. This useful article on domestic energy consumption has some tips that can also be applied to you business.