Rising business electricity rates might catch many small and medium-sized businesses unawares. Many businesses are saddled with expensive contracts and face unpredictable energy expenses with few savings choices. One of the simplest methods to avoid overpaying for energy is to do a good Business Energy Comparison, an essential step in ensuring you’re not locked into an overpriced plan.
Below, we’ll look at how comparing electricity tariff quotes, understanding contract types, and switching electricity suppliers may help you avoid financial mistakes and save money on your business energy.
Why Business Energy Costs Are Rising
In recent years, UK firms have encountered a volatile energy market. While the energy price cap restriction benefits domestic consumers, it does not apply to enterprises. Global wholesale costs, supply chain problems, and increased demand during the colder months all influence firms’ unit rate and standing fee.
If you haven’t evaluated your energy tariff in a while, you’re probably on a basic variable tariff, one of the most costly alternatives.
Common Traps in Business Energy Contracts
Many firms, unintentionally, get into contracts with
- High exit costs for leaving early
- Expensive default tariffs when the contract expires
- No clear view of how much energy is utilised regularly
- Without regular electricity meter readings, some suppliers overcharge customers
Furthermore, many small and micro firms do not have in-house energy experts. This increases their likelihood of accepting the first bargain provided without comparing energy prices from various sources.
Fixed vs Flexible Energy Contracts: What’s Best?
Choosing the right energy contract can lead to long-term savings. Let’s explore the pros and cons:
| Contract Type | Pros | Cons |
| Fixed Rate Tariff | Price stability, protection from market volatility | Less flexibility, possible exit fees |
| Flexible Rate Tariff | May benefit from market dips, suitable for short-term contracts | Risk of price spikes, harder to budget |
| Dual Fuel Contracts | Single bill for gas and electricity, easier to manage | Less freedom to compare gas and electricity separately |
| Electricity Only Deals | Better if you use more electricity than gas | Need to manage the gas contract separately |
A fixed-rate deal offers price certainty, helping with budget planning. However, if energy prices drop, you may not benefit unless you renegotiate, which might involve paying exit fees.
Key Tips to Avoid Expensive Electricity Rates
Here are some practical steps:
- Compare Before You Commit
Before signing any contracts, always compare them. Consider cheaper unit rates, standing energy bills, and contract length. Look for hidden expenses.
Use online energy supplier comparison tools to simultaneously compare energy deals from multiple suppliers.
- Monitor Usage
Monitor use by installing a smart meter or taking regular meter readings. Understanding your kilowatt-hour use allows you to select the best plan.
If you use the service during the off-peak hours, enquire about discounts.
- Understand the Tariff
Determine whether you’re on a fixed, variable, or default tariff. If your current supplier switches you to a variable plan after your contract expires, you could pay more than required.
Switching Electricity Providers: What to Know
Switching electricity providers isn’t as tough as many company owners assume.
- No interruption in supply
- The new provider contacts your old supplier
- You receive a final bill, which can include departure costs
Ensure you give contact information, pay your electricity bill, and hold on to your electricity key or gas card if you have a prepayment meter.
If your contract is due to expire, start examining choices at least thirty days in advance. Simply switching suppliers might save you money.
Supporting Low-Income and Vulnerable Clients
While most business plans do not apply, home-based company owners may be eligible for schemes such as the Warm Home Discount or fuel voucher programmes if they get specific advantages.
Local authorities may also assist with energy efficiency modifications, such as access to a new boiler or insulation.
Additional Tips for Business Energy Savings
To receive discounts, select direct debit as your payment option.
- Look for comparison energy deals platforms that display fixed deals and electricity-only possibilities.
- Review your current deal every 12 months
- Consider renewable sources for lowering your carbon impact
- Use liquefied petroleum gas if off-grid and compare rates accordingly
When to Switch?
The optimal time to switch energy contracts is within 30-49 days of your current term. This period is frequently free of departure fees, allowing you to switch to a better package with no penalty.
FAQs
- How can I determine if I’m overpaying for business electricity?
A business energy comparison portal allows you to compare your current tariff and unit pricing to alternative options. Examine the standing fee, contract type, and whether you’re on a default tariff when your fixed deal expires.
- Does switching electricity providers make sense for a micro business?
Yes, even micro and small companies can profit from moving energy suppliers, particularly if they are on a normal variable rate or have not switched. You might save money while getting better service.
- Will switching suppliers disrupt my electricity or gas supply?
No, your power and gas supplies are steady. The only changes are to billing and customer service. Your new supplier will manage the changeover, including alerting your previous source.
- What happens if I switch before the end of my existing contract?
Depending on your existing agreement, you may be subject to departure costs. Most providers, however, allow transferring without penalty within the last 30-49 days of a contract.
- Can I get help with energy costs for my business?
While initiatives like the Warm Home Discount plan are primarily for household users, you may be eligible for energy savings subsidies or improvements through your local council or energy company development programmes.
Final Thoughts
Staying aware and proactive is the greatest way to prevent excessive commercial power costs. Whether you’re a small business, a dual fuel customer, or have a prepayment meter, taking control of your energy use can result in significant savings.
Review your existing contract, monitor use, and do a complete energy comparison. Your company will benefit from improved pricing, more control, and less environmental impact.
Make the switch today, and you’ll never have to pay more for power again.
