Although it works in broadly the same way, switching to a more competitive business energy contract isn't quite as simple as sorting out a new domestic deal. Corporate energy deals are calculated differently with no dual fuel option to take advantage of usually. If you are a big company which uses a lot of energy, for example, you may find yourself being charged every half hour or have multiple electricity meters installed on-site for clearer readings. Don't worry though! To help you find out more about how to compare business electricity contracts and explain more about getting the top tariffs on the market, we have put together the below guide.
As noted above, business electricity deals come in a range of options to suit the needs and budgets of all UK companies. This often sees bespoke contracts offered by energy suppliers to businesses. These bespoke deals take into account details about your business and how much electricity you use on average.
But how does this tie in with getting the best deal you can? The only way to be sure is by comparing quotes you get from every supplier around. This can be very time-consuming though and also complicated. How do you know what a good deal looks like if you are no expert?
This is where using a reputable company who specialises in comparing business electricity deals comes in. Companies like this do all the hard work for you and check the market to find the best deals around. In addition, they will also have expert staff to advise you on what the best deal might be for your organisation.
Of course, it never does any harm to know a few basics when comparing deals. The below shows the most common type of contracts for business electricity:
- Fixed-rate tariffs, which allow you to agree in advance with the supplier what unit rates you will pay. These rates will then be fixed for the whole period of your contract. The rates you get on these contracts are normally decent but remember to check business electricity prices with a price comparison site to double-check first.
- Deemed rate tariffs, which are set-up on a 28-day rolling set of terms. These are normally used if you do not agree a fresh contract with a supplier before your existing one finishes. Deemed rate contracts usually come with higher rates though, so be careful!
- Rolling contracts, which see your business tied into a 1 year deal on higher rates. You may be able to work out a new deal on a blend and extend basis. This enables you to agree a lower rate by agreeing to a new, longer-term arrangement. These rates are still unlikely to be the best around though.
As you may guess, working out your monthly business energy rates involves a few different variables. There are 2 main ones to factor in when shopping around for a new deal though. These are:
- Unit cost, which is the price you pay for each kWh of electricity used.
- Standing charge, which is a daily charge to cover national grid maintenance and the cost of delivering electricity to your premises.
Both these charges are major influences on how much you pay per month for electricity.
The issue many entrepreneurs have here is knowing what a good deal looks like. It is worth getting a handle on this so you know which are the best contracts to sign-up for when comparing quotes. While it is impossible to give a definitive answer to this question, the below figures outline how much you should expect to shell out for business electricity on average:
- Microbusinesses = 14.4p to 15.9p per kWh unit charge and standing charge of 23p to 29p per day
- Small businesses = 14.3p to 15.1p per kWh unit charge and standing charge of 23p to 28p per day
- Medium businesses = 14.3p to 14.7p per kWh unit charge and standing charge of 23p to 27p per day
While the above average figures are only a guide, they at least give some idea of what to look out for when comparing quotes.
Most business electricity contracts mean that companies can only move to a new deal in the renewal window. This is normally about 6 months before the existing contract is up. Once you enter this window, your current supplier should send out an offer to renew your deal. Be warned though - these new terms are often not competitive! Therefore, it makes sense to look around to compare them against other suppliers. Comparing business electricity deals can be done in a few simple steps:
– Approach business energy suppliers for quotes
- Select which tariff best suits your businesses requirements
- Apply to the new supplier for the contract in question
- Let your previous supplier know you will be switching
- Wait for your new deal to come into effect.
Sounds simple, right? However, it gets more complicated when you think about repeating the above steps with every supplier on the market. This is the only way to be sure of getting the best deal after all. Once you begin to do this though, you soon realise how much time and hassle it involves. Many businesses will choose instead to let an expert energy comparison company handle their search for a new deal and also look after the process of switching suppliers. This takes all the work away from you and allows you to get on with running your business.
It is true to say that most businesses switch suppliers to save money and this is one major benefit. Getting the best deal though is not all about what you pay. You should also think about what any supplier offers in terms of special promotions, customer service, reliability and flexibility. Be sure to look at the price but also at whether the supplier is the best fit for your organisation too.
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