Compare electricity prices for business
Energy suppliers for businesses have long taken advantage of small and medium sized firms who don't necessarily have a member of staff dedicated to energy purchase. Your business energy supply can often be left and seen as something less of a priority. As a result many companies end up using a default energy supplier as there isn't the time, knowledge or inclination to switch to a better deal.
Worst of all many businesses do not realise how much they are being overcharged by remaining with one of the Big 6 energy suppliers such as British Gas.
Businesses are also misled into believing that finding a cheaper energy deal is a complex and time consuming task that requires significant knowledge and understanding of the energy market.
Compare electricity and gas prices for business
Doing a simple price comparison for you business energy is actually easier than comparing your home energy.
In fact it takes less than 5 minutes to find out how much you are overpaying and who you can switch to to get a much better deal. All you need to do an initial check is to enter your business postcode and select your business address into a business energy comparison site to find out how much you could save.
Business energy contracts are attached to the supply point - not the business owner. This means that if you are moving business premises, there will be no penalty fee for ending your contract early.
If you do find a cheaper energy deal you want to switch then the switching service will take care of all the hard work for you arranging the transfer between suppliers. It won't cost you anything, the service is free and could literally have a new cheaper energy supply sorted without the hassle by a trusted switching service.
Let's look at an example of how switching business energy can save you money. A business based in the eastern network region is currently paying £5,488.42 through British Gas with an estimated electricity usage of 36,531 kWh per year.
Doing a quick comparison shows that they could save £649 over the course of 2 years by switching to Octopus Business. On their old tariff they were paying 15.02 p for 36,531 kWh but with Octopus they would pay the lower rate of 13.89p per kWh.
Their current daily standing charge from British Gas is 0.00p per day which is great if you are renting or own an unoccupied building but not very good if you are an active business. Low cost or zero daily charge tariffs means higher unit rates for the electricity you use. Businesses use lots of electricity compared to domestic which means inflated energy bills.
So even with a daily charge of 24.55p per day (£89.61/year) switching to Octopus would save this business would be paying £516.38 a month compared to the £548.84 a month they are paying now.
This is a modest saving for a small business with 3 employees. However this is a typical small business to illustrate the point. Energy prices has fallen but most business rigidly stick with their current supplier and overpay year after year.
40% average saving can be achieved when compared to your energy suppliers standard out-of-contract deemed rate.
I could have used an atypical example of a small manufacturing business with much higher electricity consumption to show greater savings but the point is to show most businesses can save if they switch.
As an additional benefit of switching to Octopus they are switching to a 100% green renewable electricity supply so can boast of their green credentials.
Why you should compare and switch
Most business energy contracts are fixed for a term or 1,2 or 3 years. Once you come to the end of that contract you default to a default contract or deemed contract, these contracts can be as much as 80% higher than fixed energy deals.
Doing nothing guarantees that you will be paying more. When it is so easy and takes so little time to find a new cheaper business energy deal and have an energy comparison site manage the switch for you at no extra cost it makes sense to take action.
Why compare electricity tariffs for business?
Most businesses in the UK are heavy users of electricity compared to their gas usage. A businesses demand for electricity grows with size with a micro-business typically using between 5,000-15,000 kWh per annum. The lower end being close to a typical heavy domestic electricity customer.
Even a small business can be consuming anywhere from 15,000 to 25,000 kWh every year and a medium business using 30-50,000 kWh's.
Electricity costs around 4 to 5 times more than gas per kWh. The average UK business spends around 2 to 3 times more on electricity than on gas according to Bionic, the business energy comparison technology behind sites such as Compare the Market, Money Supermarket and uSwitch for business.
A British micro-business would typically spend £430 on gas a year compared to £1,062 on business electricity. A small business would have a typical annual gas bill of £856 but spend £2,038 on electricity and a medium sized business spending £3,146 on electricity compared to £1,424 on gas.
So you can see why even a small business would want to compare electricity tariffs. Reducing you kWh costs by even a small amount can have the biggest impact on lowering business energy costs.
Even if a small business switched to an electricity tariff costing a penny less it could save itself several hundred pounds a year. According to the This is Money website a small business typically overpays on electricity by £289 a year with some businesses overpaying by £1,100 a year.
Business electricity comparison
Energy prices vary by region which means the only way to get a cheaper business energy deal is to use an energy broker or comparison site. This is true for both commercial and residential energy.
It is important to shop around for the best energy deal as there is no one commercial energy comparison site or broker that will compare every available tariff on the market. Unless you are using 100,000kWh per annum in which case you have more negotiating power and can get a better deal approaching a supplier directly your best option for lowering your energy costs are by comparing business tariffs for a cheaper price.
British Gas Business comparison
Taking an average annual electricity consumption of 20,000kWh for a typical medium energy usage small business and getting a quote directly from the British Gas business website we get a price of £3,465.18.
The cheapest quote going directly with British Gas is £3,465.18, about £289 a month. This includes a 7% discount for paying by direct debit and the quote excludes the climate change levy (CCL) and VAT as this varies by business so most quotes you will get often exclude these figures.
This is the cheapest electricity quote for a 1 year fixed price '1 Year Saved Plan' tariff with a kWh charge of 18.630p and zero daily standing charge. A Zero rate standing charge is beneficial if you have a business that is seasonal or has long periods of inactivity.
Energy broker business energy comparison
Using the same energy usage details the quote we get from a business energy broker (Love Energy Savings) comes out at £2,888, about £241 a month. This is a tariff from Octopus Energy providing 100% renewable electricity on a 2 year fixed price contract. The unit rate from Octopus's business tariff is 13.99p per kWh (single tariff rate) with a daily standing charge of 24.55p.
By switching you would be making a saving of £577 per year and you would have the benefit of 100% green energy. An additional benefit of using an energy broker is that they would be able to manage your switch and account for you removing the hassle of managing the switch yourself. A great time saver for smaller businesses.
Out of contract and deemed rates
If you haven't got somebody within your business managing your energy contract then be warned of missing your contract switch dates. There is no cooling off period and your business energy provider is not obliged to notify you when your contract is coming to an end unlike for residential energy.
Costs of deemed energy contracts are on average 80% more than rates charged in a negotiated contract. Around 10% of micro-businesses are on deemed contracts.
It is important that you are aware of when your current energy contract ends (an energy broker can find this out for you) as you can be rolled onto a much more expensive tariff that you could be tied into for a year or more.