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Energy Switching: An Overview

With Quotezone you can compare business energy tariffs and help reduce your energy bills.

Running a business means you’ll be used to juggling overheads but that doesn’t mean you should pay more than you need for essentials like business energy. At Quotezone.co.uk, we can help you find the right tariff for your business gas and electricity needs – potentially cutting bills and boosting your bottom line. Here’s what to consider.

How is business energy different from domestic energy?

Business energy comparisons aren’t quite the same as comparing deals for your home and there are a number of differences, for example:

  • You can’t switch business energy suppliers until your switching window officially opens. This is usually six months before your contract ends. Home energy users can technically switch at any point but can be penalised for leaving their contract early.
  • Business energy is usually bespoke with plans tailored to your needs, unlike domestic energy plans where you sign up for energy provider’s predefined gas and electricity tariffs.
  • Business energy suppliers usually don’t offer a cooling off period, because it isn’t mandatory for business energy plans. By contrast, domestic tariffs have to give you 14 days to change your mind.
  • Dual fuel tariffs usually aren’t available with business energy, so your business gas and business electricity will likely be billed separately.
What affects business energy quotes?

A number of factors affect the cost of your business gas and electric – some of which you can control and others you can’t. For instance, commercial suppliers will take into account:

  • The size of your business.
  • The industry you’re in and your level of energy consumption.
  • The length of the contract you agree to.
  • The wholesale cost of gas and electricity.
  • Environmental levies that energy firms must pay.
  • The cost of transporting, maintaining and developing the energy network – shown on bills as the Transmission Use of System charge or TNUoS.
  • The cost of distributing energy throughout the network – shown on bills as the Distribution Use of System charge or DUoS.
What factors should I bear in mind if I want to compare business energy tariffs?

When you compare business energy prices, you’ll need to look at:

  • Cost per kilowatt hour (kWh) – just like domestic energy, business energy is measured in kilowatt hours and suppliers will charge you for every unit you use. One thing you’ll notice is that business energy typically costs less than domestic energy per kilowatt hour.
  • Standing charge – this is the cost of supplying energy to your business premises. You’ll be charged this on a daily basis so check what it is as it can have a big impact on your bills overall.
What business energy tariffs are there?

Business energy suppliers tailor quotes based on your needs, but you’ll be able to choose from a handful different contract types, including:

  • Fixed rate – this fixes the cost of the gas and electricity you use per kilowatt hour for an agreed length of time. Business energy contracts tend to be much longer than domestic energy agreements and fixed contracts can last as long as five years. Remember – you won’t be able to leave a fixed rate contract until your switching window opens.
  • Variable rate – the cost of gas and electricity can go up or down according to market trends. You’ll benefit if prices go down but will pay more if they rise. Some variable plans are flexible and don’t tie you in to a fixed period so you can leave at short notice.
  • Deemed rate – this is the equivalent of a default tariff and can be expensive in comparison to a fixed rate agreement. You can often find yourself on a deemed rate contract if you move to new premises and haven’t yet agreed an energy plan.
  • Out of contract tariff – similar to deemed rates, this will apply when your old contract comes to an end and you haven’t negotiated a new one.
  • Rollover – essentially this is when your existing contract auto renews. Rollover contracts can also be expensive (even if your lapsed contract was fixed) as they often won’t reflect the most current and competitive rates on the market.
  • 28-day contract – if you’re still on a 28-day contract then chances are, you haven’t switched energy supplier since the 1990s when the energy market was deregulated. These are a type of variable rate contract and can be expensive. The good news is, you can switch supplier at short notice.
Which is the best business energy plan for me?

When you compare business energy prices, you’ll need to bear in mind a whole host of factors to work out what best suits your business – consider:

  • Costs – compare unit cost and standing charges.
  • Length of contract – fixed rate and variable contracts come with their own pros and cons. If your energy use is consistent, a fixed rate plan can help you manage and budget for bills, but a variable plan can be unpredictable. However, if it’s flexibility you’re after then a variable rate may give you what you need.
  • Green energy – as a business user, you’re likely to use more energy than the typical domestic one. With that in mind, you might decide to lower your carbon footprint and use a ‘green energy supplier’ who sources renewables where possible – such as hydro, solar or wind energy.
  • Customer service – compare customer reviews and see what people have to say. It’s also worth focusing on the length of time it takes for a supplier to solve a problem. The last thing you want is a provider that takes weeks or months to resolve issues.
What is a half-hourly meter?

If your energy use is particularly high (a minimum of 100 kWh within any half hour period) you could benefit from something called a half-hourly meter (or HH meter). Businesses that might need an HH meter include production plants or manufacturing firms, but your existing provider is likely to be in touch with you if your energy consumption reaches this level.

HH meters monitor your energy use and send updates to your supplier every 30 minutes. One of the main benefits of an HH meter is that you can see when your energy use is at its highest, which could help you plan shift patterns or move production to different times of day to benefit from off-peak costs.

If you don’t know whether you have an HH meter or not, take a look at a recent bill. There should be a rectangular box which shows you an S number. There will be six groups of digits within the box, if the top left-hand digits are 00, then you have an HH meter.

What information do I need to switch business energy suppliers?

When you compare the market for business energy prices, it’s helpful to have a recent bill as all the details you need will be on there, including:

  • Your postcode
  • Your current supplier
  • The contract you’re currently on and when it ends
  • The amount of energy you use in kWh.

If you don’t have a bill to hand, don’t worry, you can still run a business energy comparison but it might not be as accurate.

Can I carry over my business energy plan if I move premises?

In short, yes. If you’re happy with your existing supplier and you move premises, you should be able to carry over your business energy contract. If that’s the case, let your supplier know when you’re moving and they’ll arrange continuity.

However, moving to a different premises is a great opportunity to compare business energy prices from other suppliers and you could find a much better deal. If you do decide to cancel your existing contract and switch, you must let your supplier know in writing.

Whether you switch or not, don’t forget to take meter readings of your old and new meters to ensure you only pay for the energy you use.

Search for the best business energy suppliers

Whatever your business, don’t let business gas and electric prices eat into your profits – search all available business energy deals with us instead. As an Ofgem accredited comparison site, you can trust us to deliver free, unbiased and independent advice.

To start your search, just fill in our business energy quote form and we’ll take it from there.

This information provided by Quotezone is not intended to be and should not be construed as advice. The information is publicly available and is correct as of 9th August 2017

* Ofgem research finds comparing and switching supplier or energy tariff can make a big difference to your gas and electricity bills – with annual savings of around £300 available please see https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/how-switch-energy-supplier-and-shop-better-deal

** Over 250,000 people switch energy company or tariff every month. Please see https://www.energy-uk.org.uk/our-work/retail/switching.html

To see the latest monthly switching stats, please visit Energy UK’s website: http://www.energy-uk.org.uk/publication/293-research-and-reports/switchingreports.html"