Business energy especially business electricity usage is higher compared to domestic and therefore comparing business energy rates and switching to a cheaper business tariff can make significant savings.
As a business energy supplier Bulb is not as well known as it is for it's domestic supply service. Bulb differentiates itself from the traditional business energy suppliers by only having one rate it charges and more importantly not having any exit fees making it less of a minefield when switching to a cheaper business energy tariff.
Bulb for business
Bulb is particularly attractive for small and micro businesses that have lower energy usage compared to most SME's as it offers a less complicated service. With one tariff and no exit fees it offers a less confusing and less risky option for small businesses that may not have a dedicated member of staff dealing with the businesses energy requirements.
For small and micro business where it is generally the owner who has to deal with all of the day to day issues Bulb business energy offers an uncomplicated and more transparent option for switching and saving on business energy.
Bulb for microbusiness
Microbusinesses are now treated very similarly to domestic properties when switching energy providers. One of the complexities of the 1 to 5 year fixed term business energy contracts is the rule for giving notice, knowing the exact end date of your current contract and being moved onto expensive default business rates.
A micro business is defined as a business with less than 11 employees, uses fewer than 100,000 kWh of electricity per year and 293,000 kWh of gas per year. As a micro business your supplier must tell you the end date of your contract on your bills as well as your annual consumption figures which makes it easier for you to switch providers.
Bulb business tariff
The bulb tariff for business is a single meter variable rate. There are no fixed term contracts so no exit fees. Variable tariffs are good if you want the flexibility of being able to switch without early exit fees. However if energy prices increase so will your per kWh unit rate that you pay for your gas and electricity usage.
The current bulb business tariff as at August 2020 (eastern region) is 12.51p per kWh for electricity with a 27.397p per day standing charge. A typical 20,000kWh per year business electricity usage would cost £3,317.04 which includes VAT and CCL (climate change levy) working out at £276.42 a month.
The cheapest comparable fixed rate deal is from British Gas Lite costing £3,635.56 annually inclusive of VAT equating to £302.96 a month. This is a 3 year fixed price deal rather than a variable rate. Fixed term business energy is more expensive because you are getting a fixed price for 3 years, essentially buying your energy in advance.
In order to get the best deal it is essential to compare business electricity by using one or more business energy comparison services and weigh up the benefits of your business between a fixed rate and variable rate business tariff.
Unlike domestic energy there is not a single whole of the market comparison service for business so it can be more time consuming to get the best deal for your company. Business energy rates used to be more complicated and fraught with dangers hidden in the terms and conditions of energy contracts. Taking your eye of the ball can end up being costly to your business.
Bulb vs Octopus Business energy comparison
Bulb and Octopus are two of the newer business energy providers in the UK and both offer a variable rate tariff. We compare a typical small businesses energy usage based on the Eastern region with an annual single rate electricity usage of 20,000 kWh per year.
Prices are calculated exclusive of VAT and climate levy charge as not all businesses pay 20% VAT on their energy and some smaller companies are exempt from the climate change levy.
Both business energy suppliers supply 100% renewable electricity as part of their business tariffs. They also have business gas tariffs but for our comparison we are only comparing electricity.
|Month price checked||Supplier||Electricity daily standing charge||Electricity pence per KWh|
|August 2020||Bulb Business energy||27.397||12.51|
|August 2020||Octopus Business energy||21.00||14.85|
Bulb costs £2,602 a year for variable rate business electricity which works out at £216.83 a month. Octopus energy business charges £3,046.65 for variable rate business electricity equating to £253.89 a month.
In this instance Bulb energy for business would be a better deal for a small company looking to switch to a variable tariff. Bulb works out cheaper by £444.65 a year or £37.06 a month. Incidentally Bulb for business claims to be 15% cheaper like for like than its competitors, in this instance it is more or less 15% cheaper than Octopus business energy.
Business electricity prices
It is important to note that whilst Bulbs business electricity prices are competitive as we've seen from our business energy comparison as a rule fixed energy business tariffs are generally more expensive than variable rates. The longer you fix your energy prices the more expensive the tariff will be.
You pay more for the safety of knowing how much you are going to be paying for the fixed period which can be up to 5 years for business energy.
Most business tariffs are fixed and whilst other suppliers do have variable rate tariffs they generally tend to be reserved for existing customers when they roll over to the suppliers standard rate tariff. These tariffs tend to be expensive and not very competitive compared to the energy companies fixed rate deals.
A variable business rate tariff like Bulbs is going to be lower than average and possibly currently the cheapest electricity supplier for small business. Variable rates can go up so if you are planning for the long term it may worth be considering a fixed term energy tariff.