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Whatever the size of your company, energy bills can be a drain on your running costs. Heating, lighting and equipment are all essential to keep you functioning and it's all too easy to get stuck on a tariff that's sky-high or simply not right for your needs.
At BusinessComparison we understand that just as companies vary in size and scale, so do their energy requirements. When it comes to gas and electricity use, it's certainly not a case of one size fits all. That's why we strive to find you the best rates for your individual needs.
There are two main types of business energy tariff, fixed rate and variable. Fixed term agreements are usually cheaper in the long term, protect against wholesale electricity and gas price increases and can be budgeted for by setting up a direct debit.
A variable rate contract benefits users if commercial electric and gas prices fall. Business energy is supplied on a contractual basis with terms lasting typically between one and three years.
When it comes to running your own business there's no doubt that the bills stack up. Gas and electricity are essential commodities and, as such, will always form a portion of your monthly outgoings. However, there are choices that you can make to reduce the amount you're paying for energy.
Just by switching business energy suppliers you can save up to 40% on your bills.
So how do you go about making an informed decision about which providers to use and which deals are best suited to your needs?
There are two main types of tariff used. Because the size and scope of every company is different, so too are their requirements for gas and electricity.
Choosing the correct type of tariff reflects how you use gas and electricity as well as how you go about paying for it. Certain factors should be taken into account when selecting a commercial energy tariff for your company, including your businesses financial situation, how much energy you use and where your company is located.
This type of payment plan, where the energy bill is fixed at a set rate, is well suited to those on a budget. The rate that you pay for your business energy is fixed at a set amount for an agreed period of time. In some cases this can be for as long as four years. After which you can enter into a new agreement or switch to a different supplier.
This arrangement ensures protection from price changes during the agreed period and prices are usually cheaper than with a variable contract.
Some providers also offer a percentage discount off every bill for customers who pay by direct debit. Read our handy guide on your energy bill explained.
However, one point to consider with this type of tariff is that you are locked in for the agreed duration and are unable to switch if prices go down or better deals become available on the market.
Variable tariffs can offer cheaper energy rates at the time of agreement, however don't offer the same level of protection against energy price rises as the amount that you pay for your business gas and electricity will fluctuate depending on the energy market.
A variable tariff represents the balance between paying lower energy costs in the short term and the risk of these rising in the long term. This may be a risk that small or start-up companies are willing to take to keep immediate overheads down. Within a variable tariff there are two main types of agreement.
These are a tracker price tariff which changes based on wholesale market movements and a blend and extend agreement which is an extension of your existing contract for a longer duration.
The blend and extend tariff obtains a unit rate that comprises of an average between your current contractual rate and that of the current available market rate.
There is no hard and fast rule to say that businesses can't move between these two tariffs as long as notice is given to the current supplier as per the agreed contracted period.
70% of firms experience difficulty comparing energy tariffs and 43% have never switched supplier according to research by the Federation of Small Businesses.
This is surprising when you take into account the scale of savings that could be made by businesses. A lack of understanding about the different suppliers, customer loyalty, concern about the time and effort it may involve and mistrust of lesser known suppliers are all perceived issues standing in the way of making a switch to a different supplier.
However, switching is not the long and complicated task that many believe it to be and the savings can make the change well worth it.
Typically, your supplier will send you a renewal letter detailing the new prices they intend to charge for your estimated use. Usually this is sent 60 days before the end of your current contract, however this can vary.
At this point you can either choose to renew your contract at the rate suggested or save money by switching to a different supplier with a new contract.
Compare business energy deals for your company using our comparison finder tool. Simply follow the online instructions and we'll guide you through the whole process of finding your new deal.
Upon comparing business energy prices it's useful to have a copy of a recent bill in front of you. On this document you'll also find important reference numbers that you will need to give in order to switch to a new supplier. These are the Meter Pointer Reference Number (MPRN) for gas and the Meter Point Administration Number (MPAN) for electricity.
Once you have found the best deal for your company with a provider that you are happy with, you need to arrange a new deal in plenty of time. Ordinarily you have up to 30 days before your existing deal expires to switch to a new supplier.
This is referred to as Notice Period End Date and you must inform your supplier of your intention to switch before this date.
Use a business energy broker such as BusinessComparison to process the switch and inform your existing supplier that you are taking your business elsewhere.
You can find out who currently supplies your gas and electricity by looking at a recent utility bill. The contact details of your supplier will be printed on the document.
If you have just moved to new premises or don't have this to hand then you can contact the Meter Point Administration service to get details of your gas supplier and your local electricity distribution company.
If you move into new premises then a deemed contract will normally be in place for gas, electricity or both even if you have not agreed a contract with a supplier. If an existing contract has come to an end but the customer continues to consume energy then a deemed contract may also exist. Costs of deemed contracts are on average 80% more than rates charged in a negotiated contract. Around 10% of micro-businesses are on deemed contracts.
This is when a supplier of gas or electricity rolls you over onto a new contract. This may be the case if you have failed to tell your supplier of your intention to end a contract before the notice period
If your company is moving into or out of commercial premises then it is referred to as a Change of Tenancy.
As a new tenant, you must agree a new contract either with the existing supplier or a new supplier of your choice. You may decide to use a price comparison site to help you search for a deal or seek a more competitive tariff with the existing company provider. If you are the tenant moving out then you must keep your supplier fully informed of your situation.
Yes. If you decide to switch your provider then you must inform your existing supplier either directly or, if you are using a comparison company or third-party intermediary (TPI) by signing and supplying a Letter of Authority (LoA).
An MPAN (Meter Point Administration Number) is the number that identifies your electricity supply. It's sometimes referred to as a 'Supply Number' or 'S Number'. This unique meter code helps suppliers locate your home and is found on your old statements. If you don't have an electricity bill to refer to then your supplier or local distributor will be able to tell you what it is.
MPRNs (Meter Point Reference Number) are the equivalent reference for gas and will also be found on your gas bills. They have 6 to 8 digits and are sometimes also referred to as an 'M Number'. A supplier or local distributor will be able to tell you what your MPRN is if you are unable to find it.
A commercial smart meter supplies data about how much energy your company uses. This can help put an end to inaccurate bills as suppliers will no longer need to rely on estimated costs.
If your company is a large corporate entity and operates from multiple locations, then you may require a multi-site meter. This can help you to manage your consumption more efficiently.
Switching to get the best price for your can become time consuming and complicated if you are using different suppliers for different sites. This is especially the case when tariffs are due for renewal at different times. A multi-site meter means you are on one tariff with one bill across your sites. We can help you to compare suppliers and switch to get the most competitive deal possible for your multi-site meter.
Corporate procurement is designed specifically to help larger businesses manage and maintain their energy.
Because every contract is for a fixed amount of time, you're tied into the agreement until it expires and can't cancel or change it. The time frame will depend on your agreement with 12 months being the minimum. Smaller businesses receive reminders about when their contract is due to expire. This is the point at which you can search for a cheaper deal. If you find a deal that you prefer with a different supplier then you can accept it and inform your existing supplier that you want to close your account. Once your contract expires, you will be sent a final bill to pay and may be asked to send a final meter reading.
The average annual utility bill (gas and electricity) for a small business ranges from £2,700 to £4,300. For a micro business, this is £950 per year to £2,500 and for a medium business the average is £4,800 to £7,000+.
There are certainly more commercial savings to be made with business energy rather than domestic or residential tariffs. Commercial contracts can last anything from 28 days to 5 years and businesses are locked in to the fixed term meaning that, with suppliers chasing your business, there are opportunities to access cheap deals and make larger savings.
Significant financial savings can be made by using a comparison service to compare energy for small business owners, which will compare deals on gas and electricity and make a switch that benefits their needs. Using a price comparison site can make this process even quicker and easier.
At BusinessComparison we offer a free energy comparison service. Why not compare and save more money on over 150 commercial tariffs with us today?
Business customers who want to choose a green energy provider can do so, provided that there is a suitable supplier who can service their premises.
Opting for green energy may not be the most cost-effective solution for your business, but if you're committed to finding an environmentally-friendly solution then it may be possible to find the right supplier for you. You could enhance your energy saving further by installing commercial solar panels, or even consider microgeneration.
When you're choosing the best energy deal for your business, you might have the option to either pay a tariff or a standing charge that costs the same amount regardless of usage.
A standing charge is a fixed amount that is charged no matter how much energy your uses, whilst a tariff means you will only pay for your consumption. Which option is cheapest and best for you will depend on the type of company you run, along with other factors such as its location and how much energy it needs to operate.
There's no doubt that businesses can benefit from much more competitive pricing than those looking for domestic utilities. There are many reasons for this, it's in part due to the fact that some commercial electricity contracts last for as long as five years - making it easier for suppliers to offer long-term deals.
How much you stand to save by switching energy providers will depend on lots of factors, including its size, status, and location. That being said, by using BusinessComparison to find a better deal our users save an average of £446 each per year - which works out at around 40% of their bill.
Switching providers can be seamless, but it's important to make sure you make arrangements with your new supplier early to guarantee that there's no crossover period where your company is moved onto a deemed rate.
Switching your supplier can take much longer than switching between domestic suppliers, with an average switch time of four to six weeks. This will depend on where your premises are located, the particulars of your current commercial energy supply agreement, and other similar factors.
All we need to get started on finding a better tariff is your postcode, name, email address, and phone number.
To help us to find the best priced and most appropriate deals it can also help if you're able to confirm who your current electricity or gas provider is – along with an indication of either how much you currently spend in pounds or use in kilowatts (kWh). These details aren't essential, though, and you'll still be able to search for a cheaper tariff without them.
One of the main differences between business and domestic electricity tariffs is that businesses usually pay the same, fixed rate throughout the entirety of their contract. This means that businesses are often better protected from price rises than domestic customers.
It's often the case that businesses use much more energy than your average household, which part of the reason that commercial and domestic electricity supply works so differently. Unlike domestic customers, businesses often tie themselves into a tariff for a long period of time spanning years – so it's even more important for them to make sure that they're getting a deal that's right for them at a good price.
Whilst the rates might generally be better for commercial customers, it's worth remembering they may also have to pay 20% VAT on their tariff compared to the 5% paid by domestic customers. In addition, businesses in the UK are required to pay the Climate Change Levy (CCL), with the current rate set at £0.541 pence per kWh of electricity used, and £0.188 pence per kWh for gas.
There is an exception to this rule, however, and your company won't have to pay CCL and will only pay 5% VAT if you use less than 33kWh of electricity and 145kWh of gas on average per day.
Switching your supplier can be quite different than making the swap at a residential address, with the switching period taking around six weeks. During this time, your new supplier will work out the finer details with your existing supplier and let you know a switching date.
There should be no disruption to your electricity and gas supply, even on the day that the change is made. Generally, there won't be any need for your supplier to make any changes to the infrastructure at your premises, as gas and electricity will be supplied through the existing pipes and cables regardless of your supplier.
Contracts can be fixed from between one month to as long as five years. Generally speaking, the best rates and deals are reserved for the longest fixed-term contracts – but keep in mind that if rates do fall you will still have to pay your agreed unit rate and/or standing charge for the duration of your contract.
Some businesses choose to bulk buy energy in advance of using it so they know how much they've paid. This is called the Flex approach. Using this type of approach, a company can take advantage of a favourable market rate and purchase gas or electricity at a good price, months or even sometimes years in advance when costs are low.
This works well for some businesses however, can be a risky choice if you are caught out of contract when prices are high.
There are no generic business electricity tariffs available which makes comparing suppliers even more important. Each contract – the price and duration – is unique to your company.
Even though you might choose the same supplier for electricity and gas the contracts will be separate and may contain different start and end dates.
Most businesses have the standard 20% VAT rate applied to their electricity bills although there are some exceptions to this. If you are a charity, non-profit organisation or SME with low electricity usage then you may qualify to apply for a reduced VAT rate of 5%.
If you pay via a monthly direct debit then your supplier may give you a small discount.
To ensure your rates will be in line with your current business gas consumption it's useful to have a recent bill to hand when comparing prices.
Over the course of a year, a company paying 4 pence less per kWh can easily save over £1,000.
Gas contracts typically last between one and three years.
From 1st April 2018 private landlords will have to ensure that before a property is let out it must have a minimum energy certificate band of E or above. That's following the introduction of the Energy Efficiency Regulations 2015. Landlords who do not follow this will be served with a compliance notice followed by a penalty of up to £10,000.
These new regulations are worth taking into account when considering the duration of your new contract as improvements to the energy performance of commercial properties are likely to drive down your associated costs if you are renting your premises.
Based on their gas and electricity consumption, a Crewe-based manufacturer has secured a business energy saving which equates to over £2,460 against the amount their previous supplier had quoted in their renewal letter. Within a few minutes of using our comparison solution they had compared the whole market and arranged their switch to Opus Energy – an independent utility supplier specialising in saving businesses money in a hassle-free way.
A Bolton-based hairdressers with an average business energy use said that they were delighted with the service, "They really do know their stuff when it comes to business electricity and gas contracts. I was advised on the different suppliers and their tariffs which ultimately allowed me to make an informed decision. Plus, I saved money!" By using BusinessComparison they saved £257 per year.
One of the UK's largest retailers of disability and mobility products found that they saved time and money using this comparison service. In the past they, “would call around all the different suppliers,” which “was extremely frustrating.” They used the personalised service to save £13,885 on their energy bills and now they receive a call from their account manager to make sure they are saving money every year.