Business Electricity Rates
As a business the amount that you pay for your electricity can have a significant impact on your bottom line, particularly if you are a small business with high energy usage. Larger companies can negotiate directly with the energy supplier and therefore command much lower rates.
Electricity prices can vary depending on the size of your business and the energy company that supplies your electricity. As a general rule the larger your firm the lower the amount you will be charged for each unit of electricity that you use.
Business energy suppliers offer a number of electricity only tariffs made up of kWh unit rate in pence and a daily standing charge. If your business also uses gas you will need a dual fuel business tariff that will attract its own separate kWh unit charge and a daily standing charge for gas.
Small to medium business are able to do a business energy comparison in order to find a cheaper electricity tariff to switch to.
Compare Business Electricity Rates
Business energy switching is more straightforward than it used to be. In fact for a micro business it is just as easy to switch energy as it is for a domestic customer as a lot of the consumer protection that applies to residential customers applies to micro businesses.
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.
Larger businesses may find they need the services of a business energy broker. Energy brokers are able to search the whole of the market to find you the best deal tailored to your business energy needs, much like a consultant.
Business energy brokers understand how the business energy market works and understand how businesses use energy. They use that knowledge and experience to find you a better energy deal and save your company money.
An energy broker is usually paid a commission based on the amount of energy a business uses. The more energy a firm uses the larger the amount of commission the broker stands to earn. It is therefore in the brokers interest to keep you as a business happy by saving you as much money as possible. If they do a good job you are likely to use their services again once your current energy contract comes to an end.
Cheapest Business Electricity Rates
Finding the cheapest business electricity rates can be difficult if you don't know which energy comparison sites you can use that will give you an instant comparison. Unlike domestic energy comparison services that compare a wide range of suppliers and give you the energy rates instantly many business comparison services hide this information until you call them.
We'll run through a typical business comparison later on to show you what can typically be saved by switching to the cheapest business electricity rates, even if you are only a small or micro business.
Not being able to get energy prices online means that if you are business owner looking for cheaper energy rates the whole process can become time consuming.
We checked the top business energy comparison sites and found only two that gave you upfront prices.
All of the following companies including Compare the Market, Uswitch, Money Supermarket, Simply Switch, BusinessEnergy.com, Confused.com, Utility Bidder, BusinessComparison.com and UKpower all require you to wait for a call from an advisor.
The problem with getting tied into a discussion with an advisor without first seeing the comparison figures beforehand is that you can end up getting talked into a deal outside of a wider market comparison.
When you are talking to someone on the phone you are more likely to end up singing up to a deal that may not be the best for your business. At the end of the day it is their job to sell you a new energy plan that you could potentially be tied into for up to 5 years.
The only two companies that gave upfront business energy quotes were LoveEnergySavings.com and GoCompare.
Using a business energy comparison site that will give you up front energy quotes means that it is easier for you to get a better idea of which energy supplier is going to offer you the cheapest business electricity prices.
Small Business Electricity Rates
Let's takes look at a typical small business in the UK who is currently supplied by Bulb Business energy on an Economy 7 meter with a day and night tariff. There is no gas supply to the business.
The small business uses an estimated 28,745 kWh per year which costs them £4,284.59 annually. More than two thirds of the energy the business uses is during the daytime attracting the higher daytime rate that E7 meters attract. Day usage is 20,369 kWh with a unit rate of 16.488p costing a total of £3,358.44.
Economy 7 meters have a cheaper night rate that usually runs from midnight to 7am and a higher daytime rate for the rest of the day. To take advantage of the lower night time rates your business needs to be actively using a significant percentage of their overall electrical energy usage during those 7 hours of off peak energy.
Our small business energy comparison has a night rate of 11.04p per kWh and 8,389 kWh are used by the business in the off peak period costing £926.15.
Running a business electricity comparison based on the information on the businesses current energy usage through Love Energy Savings and Go Compare shows that the small business could save by switching to Scottish Power.
|Supplier||Tariff Type||Electricity daily standing charge||Day Electricity pence per KWh||Night Electricity pence per KWh||Total cost (excluding VAT)|
|Scottish Power||2 Year Fixed||27.32p||15.09p||10.35p||£4,084.29|
|Scottish Power||1 Year Fixed||27.25p||14.54p||10.00p||£3,940.84|
A Scottish Power 2 year fix deal through Love Energy Savings would save about £200 a year. Scottish Power charge 15.09p per kWh for their day rate and 10.35p per kWh off peak night rate. There is a daily standing charge of 27.32p.
The total per year for the 2 year fix deal costs £4,084.29 compared to the current deal with Bulb Business costing £4,284.59. You would pay more for the standing charge with Scottish Power at a cost of £99.72 a year as there is no standing charge with Bulb's tariff. However with a higher day rate and night rate for the annual energy usage of the business it works out cheaper with Scottish Power.
Alternatively a 1 year fix with Scottish Power through Go Compare works out at £3,940.84 per year compared to Bulb's £4,284.59 saving £343.75. The Standing charge of 27.25 p/day (£99.46 a year), a day rate of 14.540 p/kWh (£3092.08 a year) and a night rate of 10.000 p/kWh (£749.30 a year) would save the business if it switched.
Best Business Electricity Rates
For our small business electricity rates comparison the best deal comes from Scottish Power saving this small firm somewhere between £200 and £400 a year. As this is a comparison for a specific business your mileage may vary.
Businesses use varying amounts of electricity and not everyone is with the same supplier and on the same tariff. The benefit for you as a small business using Love Energy Savings or Go Compare to compare business electricity rates is that it is a quick and easy way for you to find out how much you could save by switching to the cheapest business electricity rates.
Getting the best Business Rates from an existing supplier
In this instance I dug a little deeper just to illustrate that you really need to check how much you are paying for your energy and take action if you are paying too much.
Checking the businesses current deal with Bulb on Economy 7 it looks like they could, in this instance, save even more by switching from Economy 7 to s single rate tariff. If they did this the company would reduce their yearly energy costs down to £3696 saving £588.59 over the course of a year which is even a bigger saving.
I'm pretty sure the small business in question is not aware of this and even more sure that Bulb business will be in no great rush to enlighten their obviously 'valued business energy customer'.
The point is as a small business it's pretty easy to check if you are being charged fairly or your energy. You just need a computer with internet access to compare.
So this business could switch to Bulb's variable rate tariff and pay 12.51p per kWh as their single all day rate (28,745 kWh's * 12.51p = £3,596) plus a daily standing charge rate of 27.397p per day (27.397p * 365 days = £100). So the new yearly cost would be £3969 rather than the current deal of £4,284.59.
Comparing Business Energy
Make sure that you do not get tied into a deal over the phone without first doing an online business energy comparison. No single business energy comparison service can compare the whole of the market so using comparison tools that give you quotes without commitment.
As you can see from our example comparison it was relatively easy to find several potential switches that would save the business money. It's a cost free process that takes little time but you need to make sure you stay away from the comparison sites that do not give you an online comparison up front, at least initially. Always check with your current supplier, do this online so they cannot hide any 'new customer' deals from you.
If you want to reduce your business energy bills you have to compare. Many businesses, especially small firms that do not have a dedicated manager for the role can end up being tied into a badd energy deal they cannot easily get out of. It only takes 5 minutes and is cost free to get an initial idea of how much you could potentially be saving.