Electricity price comparison for business
Electricity is usually a businesses largest utility requirement and so it makes sense to get the best deal available when it comes to commercial energy. Business energy comparisons are different from domestic energy comparisons in that electricity demand will be much higher and therefore the potential savings are much greater.
The commercial energy sector has long been dominated by British Gas, however British Gas energy plans are hardly ever the most competitive. In recent years the range of energy suppliers has diversified with increasing competition much like how the domestic energy market has seen an influx of new energy suppliers.
Switching providers and changing your business energy plan to a more competitive tariff can mean considerable savings for a company. However many UK businesses do not prioritise electricity supply costs and end up losing out on potential savings of hundreds of pounds for micro, small and medium businesses and potentially thousands for large and commercial scale companies.
Most UK companies choose a rollover contract or end up on out of contract rates costing UK businesses more than a billion pounds in higher energy rates.
Business energy broker
In the UK there are well over 100,000 companies who are on a half hourly meter. A Half hourly meter sends meter readings back to the supplier every 30 minutes and is similar in operation to a domestic smart meter.
Businesses on a half hourly meter tend to be high energy usage customers and therefore have a custom negotiated energy rate. Business energy brokers exist to act as brokers or negotiators between a company and the energy suppliers. Due to the large amount of electricity consumed by these large firms (over 100,000 kWh a year) they are able to negotiate better energy prices.
A good energy broker will be able to assist you through the negotiating process and advise you of the best way to get the most competitive energy rate for your business. They will handle the switch between your current supplier and your new supplier and notify you when your new contract ends so you can negotiate a new contract. Energy brokers often work on a commission basis with the fee being added to the customers unit rate.
Business energy comparison
For most businesses in the UK a new and cheaper energy supplier is found through a business energy comparison site. Business energy contracts for gas and electricity are handled separately with electricity usually being the most costly part of any firms utility bill.
Performing a business electricity price comparison can be done by any competent employee or the business owner if you are a micro or small business. A price comparison for business works much the same way as a domestic energy price comparison where your current energy usage and price paid is compared against suppliers in the energy market.
Fixed term energy contracts
You can fix a business electricity price for between 1 and 5 years with a 12 month fixed price plan being the most popular as it allows you to compare prices each year to make sure you are getting a good energy deal.
The table below shows the cheapest electricity deals for a small business based on the average energy usage of (20,000 kWh annually). The comparison was done through Love Energy Savings on July 2020 and shows the cheapest overall deal for each yearly fixed term length.
|Dual Energy||1 Year||£236||£2,835|
|Dual Energy||2 Year||£244||£2,927|
|British Gas Lite||3 Year||£247||£2,968|
|British Gas||4 Year||£269||£3,225|
As you can see from the results the longer you fix your price for the higher the monthly cost. The cheapest business electricity tariff for 1 year costs £236 a month from Dual Energy and as you increase the term of the fix the monthly cost increases with a 5 year fix from Total costing £289 a month.
The fixed price is in relation to the standing charge and the price per kWh of electricity. Our illustration uses the typical average small business electricity usage of 20,000 kWh per year or about 1,666 kWh per month. If you use more energy than our example your bill will be higher or less if you use less, only the price you are charged per unit will remain fixed.
How to compare business energy tariffs
To compare electricity prices for business you need to use a business energy comparison site. There are a number of energy comparison sites but they do not all offer the same range of energy suppliers to show all of the energy plans on offer.
Domestic energy switching sites more or less compare all of the same energy suppliers but commercial energy comparisons are different. For a domestic energy comparison you'd likely get the same deal, assuming you are looking for the cheapest supplier whichever comparison service you used. Not so for business electricity comparisons.
Business energy comparison websites will only offer comparisons for business energy utilities that they can switch you to which means they will not compare the whole of the market. For this reason it is worth comparing energy companies with at least two different business energy comparison sites.
The table below shows three sites that offer business energy quotes where you can see the results of your comparison straight away. I have purposefully excluded so other sites as thy do not show you the results of the comparison online and instead have to provide a contact telephone number.
|Business Energy Quotes||Love Energy Savings||Go Compare|
|british gas lite||✔||✔||✔|
If you are making a comparison you do not want to be drawn into a telephone conversation without first having a complete picture of what deals are on offer. You may end up signing up to an energy rate without a wider comparison as it is easy to get talked into a deal over the phone which is contractually binding so do your research first.
Here is the list of business comparison websites that I have excluded as they require that you discuss your switch over the phone before you have seen the comparison results.
- Compare the Market (powered by bionic)
- Money supermarket (powered by bionic)
- Uswitch for business (powered by bionic)
- Business Energy
- Gocompare (powered by energylinx for business)
- Utility Bidder