As with domestic energy, there are two charges that will make up the bulk of your business energy bill:
- Unit cost – Measured in kWh, this is the rate you pay for the gas and electricity you use. This rate will usually be fixed, but your bills can still go up and down, depending upon usage.
- Standing charge - A fixed daily charge to cover the maintenance of the national grid, and the cost of transporting gas direct to your business premises.
When you compare quotes, you can cut the cost of your bills by looking for deals that offer lower unit costs and standing charges, but the price you pay each month will also be affected by additional charges and taxes, including transportation and distribution costs levied by suppliers, as well as VAT and the Climate Change Levy, issued by the government.
You should also be aware of the types of energy contracts that are out there, of which there are five main types:
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Fixed rate – Unit rates are set at a certain price for the duration of the deal. This can help with budgeting and safeguard against price hikes. Monthly bills will still fluctuate in line with your energy usage.
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Variable-rate – Unit rates are linked to market activity, and can go up or down for the duration of your contract. So you could end up paying more or less from month-to-month, even if your energy usage remains constant.
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Deemed rate – Also known as an out-of-contract rate tariff, this is a rolling deal with expensive rates.
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28-day – A contract for businesses who haven’t switched since the energy market was deregulated.
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Rollover – A contract that is used when no alternative has been agreed before your current contract’s end date. Rates are usually among the supplier’s most expensive.
You need to be particularly mindful of deemed rates and rollover contracts. If you haven’t signed a new contract or renewed your old contract, most suppliers will put you on ‘deemed rates’, a temporary rate that is usually a lot more expensive than regular, in-contract prices, or a ‘rollover contract’, which will see you sign up with your supplier for another year, again on less competitive rates.
If you’re placed on deemed rates, you can get out of this contract by giving your supplier 30 days’ notice, but if you go onto a rollover contract, you’ll find this much more difficult to leave.
That’s why it’s important to know when your business energy contracts end, and agree a new deal before this date.
The energy needs of a business are often vastly different to those of the average household, and commercial energy contracts reflect these differences – so, even if you’re used to switching supplier to get the best deal on domestic energy, you may still struggle when it comes to switching business gas and electricity suppliers.
Whereas you can switch your household energy in just a few clicks of your mouse – just enter your postcode along with a few other details and you’ll instantly be presented with a list of suppliers and quotes – switching business energy isn’t quite that simple.
Because each and every business has unique energy demands, which are not only determined by the industry they operate in, but also by things like location and number of staff members, it’s not usually possible to offer the same ‘off-the-shelf’ tariffs that are available for domestic users.
Instead, all commercial energy quotes are tailored to meet the needs of each individual business. And because different businesses have different gas and electricity demands – some may not even use gas at all – there’s no dual fuel option, meaning you have to get separate deals for both gas and electricity.
So, to get the best deal, you’ll not only have to ring around each and every business energy supplier, you’ll have to do it twice to get individual quotes for both fuels – unless, that is, you let the energy experts at MoneySuperMarket do the hard work for you.
How to compare business energy deals
As a busy business owner, it’s unlikely you’ll have the time to ring around a range of suppliers for bespoke business gas and electricity quotes, but one call to the MoneySuperMarket energy experts is all it takes for us to compare tariffs for you, and find a competitive deal that suits the needs and budget of your business.
To make the comparison process as quick and simple as possible, try to have the following information to hand:
- A recent energy bill
- Your business' registration information
- Your MPAN and MPRN numbers from your bill or meter
- Your current contract's end date
- The date your switching window opens.
Our energy experts can then search the market to find the best possible deal. And the final decision is always with you – we supply the quotes, and you pick the one you like best.
Give our business energy experts a call now on 0800 088 6986, and see how much you could save.
