All businesses rely on energy to help them function properly.
Whether it's a construction site or hair salon, energy is essential.
As a business owner it can sometimes feel like spinning plates and with so many things going on, your energy bill can sometimes be forgotten about.
In fact, it is estimated that 40% of UK businesses haven't changed their energy supplier in the past five years.
The main reason you should switch your business energy supplier is that it can help reduce your bills substantially.
Often businesses will find themselves on expensive and unsuitable tariffs for their needs.
A recent study shows that businesses could be overpaying for their energy by up to £1100.
That's 50% of the average business energy bill in the UK.
Business energy tariffs are structured the same way as commercial tariffs are.
There are two types available, fixed rate tariffs and variable rate tariffs.
Each have their advantages and disadvantages and it is worth knowing which one will be most suitable for your business.
Fixed Rate Tariff
This type of payment plan is where the energy bill is fixed at a certain rate.
Beneficial if you're on a budget as whatever the rate is, it will be fixed for the agreed amount of time, meaning that you will always know how much you're paying daily for a standing charge and for each kwh you use.
This protects you against any fluctuations in the energy market.
This can sometimes backfire however as prices may drop and you won't be able to take advantage of the new lower rates until your contract is up.
Some companies will allow you to switch to another tariff before the contract time is up, but only within their company.
A great benefit of a variable tariff is that they can offer cheaper rates at the time of agreement.
You are at the mercy of the market and its fluctuations however.
Again, this may work in your favour at times and in others it may not.
A smaller company just starting out may see this as a preferable short term solution to keep overheads down but risk price increases in the long term.
Within a variable tariff there are two types of agreement.
Tracker Price Tariff: These tariffs change based on the market conditions and wholesale energy price.
Blend & Extend Agreements: These tariffs extend your existing contract for a longer duration. The unit rate is calculated by finding a compromise between your current unit rate and the available market rates.
Business energy rates to tend to be more favourable to the consumer compared to residential rates.
A large reason for this is due to the fact that suppliers will offer contracts with longer periods so in turn they can offer your business a cheaper rate.
More and more energy suppliers are offering green energy options to both residential and business customers.
If your business is environmentally conscious then these tariffs may be available to you, but do generally tend to be a bit more expensive.
Every business is unique, as is their energy consumption and needs.
Some businesses even pay differing VAT rates on their energy tariffs.
This makes it difficult to pin point exactly how much you will save when switching your energy supplier.
It is also worth remembering however that if you pay 4 pence less per kwh then this can save over £1000 a year for your business.
Hopefully that's cleared up some questions that you may have regarding how switching your business energy supplier can help your business.
Now the last one you most likely have, is "how can I switch my business energy supplier"?
Well thankfully the process couldn't be simpler; all you have to do is click the "Start Free Quote" button to start comparing prices in seconds.
This is an absolutely free service and there's no obligation to commit, so click the button, follow the prompts and get comparing now.