Every business, whether a small startup or a major corporation, relies on electricity. However, with growing energy expenses and unpredictable power tariffs, relying on an obsolete or uncompetitive corporate electricity plan may gradually deplete your resources. Is your present power supplier assisting you or costing you more than necessary?
Whether you haven't examined your plan in a while, it may be time to do a Business Energy Comparison to determine whether you're receiving the best deal.
Understanding Your Business Electricity Plan
A business power plan describes the parameters under which your firm receives and pays for electricity. It covers the unit prices, standing costs, contract period, and departure fees. Plans vary greatly, and many organisations inadvertently accept introductory or rollover pricing, often far from the lowest.
Businesses, unlike consumers, are generally provided with tailored pricing. This implies that power rates might fluctuate based on things like:
Size and nature of your business (e.g., micro business, small business, or large business)
- Your industry sector
- Energy usage patterns
- Location and number of multiple sites
- Contract length and payment terms (e.g., direct debit)
Why Sticking with Your Current Supplier May Be Costing You
Many firms stick with their present supplier because it is convenient or because moving is seen to be difficult. However, this frequently leads to increased prices. Suppliers may raise rates without improving service, especially if you are on a deemed, out-of-contract, or variable tariff.
According to the UK government, firms that do not compare gas and electricity prices or switch business electricity suppliers regularly may pay 30% or more in excess.
Business Electricity Tariffs: The Essentials
Here's a quick look at common tariff types available to businesses:
Tariff Type |
Description |
Ideal for |
Fixed Tariff |
Locks in a unit rate for a set term. |
Budget-focused SMEs |
Variable Tariff |
Prices can go up or down with the market. |
Risk-tolerant businesses |
Deemed Rate |
Automatically applied when no formal contract exists. |
Newly relocated businesses |
Green Tariff |
Electricity from renewable electricity sources. |
Eco-conscious companies |
Fully Fixed |
Fixes both unit prices and standing charges. |
Long-term planning |
The Cost Components of Your Energy Bill
When analysing your energy bills , it is crucial to understand where your money goes.
- Unit Rates: The cost per kWh of power utilised.
- Standing Charges: The daily price for connecting to the power network.
- Non-Commodity Costs: Include network, policy levies, and system balancing fees.
- Other Costs: Other expenses include meter readings, administration fees and probable departure costs.
You may not get the greatest value if these factors are not obvious or competitively priced.
Why Comparison and Supplier Switching Matter
A good energy comparison can help you identify the cheapest plan and switch business electricity suppliers without disrupting service.
Switching has the following key benefits:
- Reduced business electricity rates
- Better client service
- Access to green tariffs
- Better contract terms
- Long-term cost reductions
Switching is crucial for new enterprises placed on high tariff rates.
How Smart Meters and Usage Data Can Help
Installing a smart meter allows for more precise meter readings, ensuring you only pay for what you use. It also lets you monitor your energy consumption in real time, detecting patterns and inefficiencies.
By monitoring electricity usage , you can:
- Identify inefficient procedures
- Adjust activities to off-peak hours when wholesale prices are lower
- Set informed usage goals
This not only reduces your electricity bills, but also helps to reduce your carbon footprint.
Tips for Managing Your Business Electricity Effectively
- Review your plan annually. Don't allow contracts to auto-renew
- Use reliable portals to compare providers regularly
- Select the right tariff for the business model
- Ensure billing is accurate with a smart meter
- Go green, renewable energy is not only ethical, but it is also becoming more affordable
- Consider entirely fixed tariffs for budgetary stability
- Look for hidden expenses, such as departure fees or standing charges
Real Business Impact: A Case for Switching
Company A, a medium-sized UK retailer with many locations, converted from a typical variable to a completely fixed green tariff. What's the outcome? They saved £9,200 annually and cut their carbon footprints by 18%.
FAQs
1. Can I switch business electricity suppliers at any time?
You can often move at the end of your contract or during renewal. Before making any changes, always check for exit costs.
2. Will my electricity supply be disrupted if I switch energy suppliers?
No, transitioning is entirely effortless. Your energy will flow normally; the provider and billing information will change.
3. What distinguishes between a unit rate and a standing charge?
The unit rate is the cost per kilowatt hour of energy utilised. The standing charge is a daily price to keep the supply connection active, regardless of how much you consume.
4. Do I need a smart meter for my company?
While not required, a smart meter provides precise meter readings and aids in monitoring energy use, which can result in cost savings.
5. Is renewable energy more expensive for businesses?
Not always. Many green tariffs are now competitively priced due to lower wholesale pricing and government incentives.
The Bottom Line
Electricity is essential for running your business, but you should not pay more than required. Whether starting a new business, managing a small firm, or operating nationwide, updating your business electrical strategy is essential.
Don't wait for excessive energy expenses to become apparent. Take action immediately to manage your energy, get better unit rates, and protect your bottom line.
So, consider whether your business's electricity plan is a lifeline or a liability.
