How to switch business water?
The business water market was deregulated in 2017, meaning that all commercial properties can now choose from several different water suppliers. Prior to 2017, there was a regional monopoly for non-domestic water services.
Opening up the water market has helped to lower bills and improve competition. The market is also closely regulated by Ofwat, who have set a limit for what customers can be charged if they don’t switch or renegotiate their deal.
In this guide to business water, we will cover how the market works and uncover who the players are. You will also learn about the benefits of switching and how to switch, so you can go about getting the best deal for your business.
How does the business water market work?
Unlike the domestic water market which is served exclusively by regional water suppliers (Thames Water, Yorkshire Water, etc.) the non-domestic water market is served by retail suppliers like Open Water and Water Plus.
The non-domestic water market was deregulated in England in 2017, creating what is known as the Open Water Market.
Prior to the Open Water Market, the non-domestic water market was closed to retailers and only open to regional suppliers.
The Open Water Market was set up by the UK Government, led by the water regulator Ofwat, Defra, and MOSL. These three organisations now oversee Open Water to make sure it continues to provide a fair and open market.
In Scotland, the business water market was deregulated in 2008. Wales does not have a completely deregulated market yet.
What was the point of deregulation?
Prior to deregulation, there was a regional monopoly for non-domestic water.
This stifled competition and created a low-quality market. With no competition to force water prices down, suppliers had no incentive to lower prices or even improve their service since businesses were stuck with no way to switch.
Scotland deregulated their water market way back in 2008. This resulted in a much fairer marketplace with lower prices and a healthier level of competition. England followed suit to replicate these results, and the rest is history.
Who controls the business water market?
The business water market may be served by retailers, but retailers do not control the market itself. The water market in England is controlled, monitored, and regulated by three organisations: Ofwat, Defra, and MOSL.
- Ofwat is the economic regulator for the water market in England and Wales. They are responsible for setting limits on pricing and protecting customer needs, as well as encouraging competition and investment.
- Defra is the Department for the Environment, Food, and Rural Affairs. They are responsible for policy on the environment and alongside Ofwat they put together the framework for accountabilities with the Open Water operation.
- MOSL is the market operator of the non-domestic water market in England. They are responsible for ensuring the non-domestic water market runs correctly. They played a lead role in developing the Central Market Operating System.
In Scotland, the WICS (Water Industry Commission for Scotland) regulates the market.
The relationship between wholesalers and water retailers
Wholesalers are the companies who own and operate the network of water pipes, treatment works and mains systems. They control the water supply, and they sell the water as well as treatment works to retailers.
Retailers then sell the water to you. By the time you receive your water, it will have been treated and paid for by the retailer.
Who are the wholesalers?
Wholesalers are regional water companies. They include:
- Severn Trent
- Thames Water
- Yorkshire Water
- Southern Water
- Wessex Water
- SSE Water
- United Utilities
- South West Water
- Northumbrian Water
*Please note that this is not a complete list.
Who are the retailers?
There are over a dozen business water retailers. They include:
- The Water Retail Company
- SES Business Water
- Smarta Water
- Utility Bidder
- Regent Utilities
- Clear Business
- Source for Business
- Water 2 Business
- Business Stream
- First Business Water
- Water Plus
- Everflow Water
- Yu Water
- Olympus Water
- Castle Water
*Please note that this is not a complete list.
What are the benefits to changing my water supplier?
The business water market was deregulated so that you have the power to switch your supplier at the end of your existing contract.
Whether or not you take up this opportunity is up to you. There are several potential benefits to switching, including:
- You could save money: Water retailers compete for your business and it is in their best interests to outcompete other suppliers. You could save money on your water rates and shave hundreds of pounds off your bill.
- You could get better service: Like all businesses, customer service varies from supplier to supplier. If you have been unhappy with your existing supplier, switching will give you the opportunity to choose a supplier with better reviews.
- You could streamline your water bills: If your business operates multiple sites, you may have several water contracts with several suppliers. You could switch to the supplier you are most happy with across your sites. In doing so, you would streamline your water bills and you may qualify for a multi-site discount.
- You can take advantage of lower prices: The water market isn’t as volatile as the electricity and gas market, but prices do fall and rise. If your old contract was taken out at a time when rates were higher than now, it will be worthwhile switching.
How much money could I save by switching?
Switching to a cheaper water supplier could save you hundreds of pounds per year. Our research shows that the difference between the cheapest business water supplier and the most expensive can be as high as 60%.
If you have a meter, then you will currently pay for your water through a standing charge and a volumetric rate. Switching could potentially give you access to a lower standing charge and volumetric rate, lowering your bill overall.
If you do not have a meter, then you will currently pay for your water through a standing charge and the rateable value of your property. Rateable values and standing charges are set by the retailer, so there is still an opportunity to save money.
Something to keep in mind is that charges for businesses who use less than 50 Ml (250 Ml in Wales) of water per year are subject to price limits.
If you use more than this amount, there are no limits, but the difference between large users and households must not be substantial. Ofwat regulates prices to make sure they are fair. You can find out more about how they set price limits here.
How to switch water supplier
Depending on when you moved into your company’s premises, changing supplier may involve switching from an old supplier to a new supplier, or taking out a new connection if there is no existing water supply in place.
The process for both scenarios is the same.
Checking your current deal
Depending on your current deal, it may include:
- Water supply
- Wastewater removal
- Both water services
You may want to chat with your existing supplier to see if they can give you a better deal. The deal they offer may be better than you can get by switching.
Finding the best rates
We want to lower business water costs for every single UK business and bring full price transparency to the business utilities switching market.
By answering 5 simple questions using the form above, we can help you find the lowest business water prices.
Getting a quote
Whether you use a comparison site, a broker or go to a water supplier direct, you will need the following information to hand:
- Your meter number / Supply Point Identification (SPID)
- Your organisation’s name
- Your organisation’s address and postcode
- Your annual water consumption (estimated)
- Your contact information
You may also need to supply:
- Your Unique Property Reference Number (UPRN)
- Your annual spend as an alternative to annual consumption
This is all the information a business water supplier, comparison site or broker needs to provide you with a quote.
The switching process
Whether you switch to a new business water supplier or take out a new connection, the process is relatively simple.
Once you have agreed a deal with a water retailer, the switch will begin, and a contract start date will be agreed with your new supplier.
The switching process will happen behind the scenes. You will have no hand in it. Your new supplier will keep you updated about the switch.
The following things will also happen:
- You will get a final bill for any remaining charges from your old supplier
- You will get your first bill from your new supplier as agreed in your contract
Once the switch process is complete, that’s it! You will now have a new water supply, subject to the term date in your contract. Once this ends, you can repeat the process and hopefully save even more money on your business water bills in the future.