Energy is important for the everyday operation of all businesses. Without a supply of gas and electricity, sales outlets can’t sell goods, bed and breakfasts can’t keep their guests cozy, and storehouses can’t find products.
In spite of its significance, energy isn’t something that many business owners reflect upon. If you’re curious whether you’re paying too much for your gas, or don’t understand what type of electricity contract is ideal for commercial use, you definitely aren’t alone.
This essential guide will brief you on everything you need to know about business energy:
What Exactly is Business Energy, Anyway?
First, Let’s start with the nitty-gritties. Business energy is – well, energy for commercial use. The same way your residence receives a supply of electricity and gas, so does a business – and it definitely wouldn’t get far without it!
How Does Domestic Energy Differ from Business Energy?
Following are ways business energy differs from what you may be used to at home:
- Business Rates are Inexpensive – While Residential energy providers sell and buy electricity and gas on a once-a-month basis, business energy is purchased in bulk. Business energy providers purchase enough energy to last the duration of your contract, which means you could benefit from a discounted unit rate.
- Business Energy Contracts Last One Year or Longer – Even though variable and fixed rate tariffs are available, all business energy contracts are for an agreed period. So, you can’t shop around for a new contract until your current one expires.
- There’s no Grace Period – Domestic energy switches take no longer than seventeen days to complete, fourteen of which are covered by the grace period, during which time you can nullify the contract without penalization. Conversely, business energy contracts offer no such escape clause; so ensure you’re content before taking on any contracts.
- Business Energy Contracts are Single-Fuel Only – You might find that signing a dual fuel contract – where the same energy provider offers both your electricity and gas – saves you a considerable amount of money on your home energy bills; however there is no such option with commercial energy, meaning you’ve to run separate quotations for both electricity and gas.
- There’re No Off-The-Shelf Solutions – When changing residential energy providers, you can select from various tariffs to find the most affordable one on offer, but business energy deals aren’t similar. Instead, providers evaluate the requirements of every business on a case-by-case basis and offer a personalized quote.
What Types of Commercial Energy Deals are on Offer?
Electricity and gas suppliers offer different types of contract, and it’s vital to ensure you’re on the best one, to avoid paying too much for your energy.
There’re 5 main commercial energy deals offered:
- Fixed Term – Goes for a set price per kWh for the period of the agreement. This doesn’t fix the overall amount you pay monthly, which will vary depending on your usage.
- Variable Rate – Unit tariffs are connected to market activity, meaning they could vary throughout your agreement period.
- Deemed Rate – If you let your existing tariff expire without changing the provider or taking on a new contract, you’ll be placed on an out-of-contract tariff, and pay your provider’s high-priced rates.
- Rollover – An agreement that is used when no alternative has been agreed on before your current agreement’s expiry date. Rates are among the provider’s most costly.
3 Options to getting Energy Quotations
For business-to-business energy quotes, you’ve three options:
1.The DIY Approach
It takes time to explore the entire UK Business Energy market, as there’re 53 providers to visit their sites or get in touch with the sales representatives. You might not get the best prices, as some brokers might have an exclusive deal not generally available.
So, we recommend that businesses use one of the following routes to market:
2. Price Comparison Sites
Making comparisons online is part of our daily lives now, and the business electricity and gas market is no different. You get to view a subsection of the entire market directly, while others hook you up with a negotiator to walk you you through the switching process.
3. Energy Negotiators
Outsourcing the process to recognized business energy brokers would save you a lot of time since they use specially made technology platforms to quote the entire energy market on your behalf.
Energy negotiators help individuals or organizations take on better deals for their energy. They basically act as a broker between customers and providers, in the same way, that a business energy comparison website does.
Teaming up with an energy negotiator is to a great extent a win-win situation. Businesses save a considerable amount of money on their energy bills. Negotiators have a good understanding of the energy market and build close relationships with providers, who might, in turn, offer them discounted rates.
Choosing Business Energy Suppliers
You’ve a choice of 53 different providers when switching your business energy deal. These include small independent companies, newer entrants and traditional multi-national companies.
The Big Six Suppliers
The current Big Six business energy suppliers are:
- British Gas
Traditionally just these six business energy suppliers controlled 90 percent of the business-to-business space, but slowly other business energy companies are starting to make an impact. In fact, according to UK Business Energy, the ‘Big 6’ energy companies have less than 20% market share.
5 Insanely Clever Ways to Reduce Business Energy Consumption
Using a lesser amount of energy will help reduce your business’ carbon footprint and bills. But it can be easy to overlook and fall into extravagant habits. Here are our top 5 efficiency tips:
1. Energy Saving Light Bulbs
LED and CFL bulbs can cut energy usage by 75 percent and last up to three times as long.
2. Shut Down Appliances During the Night
Reminding your employees to shut down computers, turn off vending and coffee machines, and switch off the lights and air conditioners is a quick way to reduce waste.
3. Motion Sensor Lights
Install these in areas like toilets and meeting rooms, which tend to be vacant for longer periods. Motion sensor lights go for about £20 – £50 each, and a little more to have them installed.
4. Go Paperless
Did you know that printing a double side of A4 uses about 0.04 kWh of energy? Try to utilize processes that depend as little on printing hard copies as possible. Not only will you save money on your energy bills, but you’ll also spend less on paper and toner.
5. Be Flexible
Allowing your staff to work from home for a day or two per week will reduce your overheads considerably. Moreover, there’re a lot of case studies showing that working from home can have a positive uplift on productivity.
Congrats! You’re now a business energy professional.