Paying more for the same thing is bad economics, and this is especially true of energy because all energy is the same. Electricity is electricity – there’s nothing different about the electricity we used writing this sentence than you use in your business.
Despite this, business electricity prices vary greatly between suppliers. This is because they have variable costs of their own. These get factored into the company’s margin, and this leads to a disparity in prices between suppliers.
This is the reason why comparing business electricity makes so much sense: if electricity suppliers have different prices, and you want the lowest prices, you need to be able to see the best prices in real-time to make a decision.
Before you start comparing quotes, this guide will help you compare business electricity the right way, get the best deal and maximise your savings.
How business electricity differs from domestic electricity
Understanding the key differences between business and domestic electricity tariffs will help you get a better deal. There are 5 things you need to know:
- Business electricity rates are cheaper than domestic rates
- The VAT rate on business energy is 20%, not 5%
- Some business tariffs don’t have a cooling-off period
- Business electricity contracts can last longer – 3, 4 or 5 years at a time
- Business energy tariffs are single fuel only – gas and electricity are always separate, so there is no such thing as a dual fuel business tariff.
The different types of business electricity tariff
Suppliers will usually offer a variety of different contract types. The right contract for you depends on your business and how you use electricity.
Fixed electricity tariffs let you fix the rate per kWh, giving you a predictable fixed cost for your electricity. A fixed tariff may also fix the standing charge (this covers the cost of your energy supplier getting electricity to you).
Variable energy tariffs are subject to changes in wholesale market prices. This means the price per kWh can go up or down. You won’t have predictable energy bills, but you may save money if the price of electricity goes down.
You can’t buy a deemed rate tariff – instead, you get moved onto one. You will get moved onto a deemed rate tariff if you don’t renew your contract or switch supplier. Deemed rates can be up to 40% more than standard rates.
A rollover tariff is a 30-day rolling electricity tariff with variable prices per kWh. This will give your business flexibility over a short period. It will be useful if you are between premises or only need electricity for a short time.
Which is right for me?
If your business wants a predictable price for electricity, a fixed tariff is definitely what you want. You can fix a business electricity tariff for 1, 2 or 3 years at a time with most suppliers and up to 4 or 5 years with some suppliers.
Variable tariffs are generally only recommended for short-term use because historically, electricity prices only go up. If you fix your tariff for several years, you will be protected from the massive price hikes that are common in the industry.
How do I compare business electricity deals?
Until very recently, it was difficult to compare business electricity deals from multiple suppliers because there were few high-quality comparison services. This is changing and you can now compare suppliers with a few services.
Here’s how to compare business electricity deals:
- Visit a third-party intermediary (TPI) like EnergyBillKill.com – TPIs are hooked up to energy suppliers and have exclusive deals in place to offer the best rates
- Enter a few details about your business, including how much electricity you consume, your postcode and your ideal term length
- Compare the quotes presented to you – you should have quotes from several suppliers based on the information you provided
- Choose the deal that’s right for you
- Initiate your switch through your preferred TPI – your TPI will communicate with your new supplier and your new supplier will do the rest.
How much could I save?
Switching your business electricity could save you up to 20% on your electricity bills. We know this because around 40% of our customers save 20% with us, with another 40% saving 10%. These are big savings that shouldn’t be missed.
You can get started comparing quotes with EnergyBillKill today. It takes less than 60 seconds to get quotes and we can initiate your switch the same day.