Businesses always have ongoing overheads and it’s important that sensible savings are made to ensure the successful running of a business. A great way to potentially save on costs is to review the business electricity contract and see if a better deal is available elsewhere.
Finding the most suitable business energy deal can be quite challenging, given the sheer variety of energy contracts and energy suppliers available. You can also take advantage of energy comparison brokers if you would like the added convenience. Brokers can help you find the most suitable business electricity deal available and they can also help you make the switch.
To help you get the best deal possible for your business, there are a few things to know when exploring business energy deals.
Knowing the Contract Types
Although individual deals will vary from each supplier, there are two main types of contracts available. These are known as fixed-rate contracts and variable rate contracts. Depending on your business electricity consumption and your needs, one contract may be a more suitable choice over the other.
Fixed Rate Contract
As the name suggests, this type of contract means that customers will pay a fixed rate for the duration of their business energy contract. Customers are charged on a per kilowatt basis and the price of energy may rise or fall depending on the market. With a fixed rate contract, customers will pay the same amount each month, regardless of the changes in energy prices.
This type of contract is suitable for businesses that use a similar amount of electricity each month as they are able to opt for a fixed rate. This means that they can expect to pay the same amount each month and they won’t have to worry about fluctuations.
Variable Rate Contract
Variable rate contracts are also known as flexible rate contracts. This contract means that customers may be charged various amounts depending on the energy prices on the market. Similarly, variable contracts also charge on a per kilowatt basis and the fluctuations in energy prices on the market will have an impact on the amount that a customer pays for that month.
This type of contract is suitable for businesses that understand the energy they use and know how their bills are calculated. This contract can be riskier than a fixed contract, but it does enable the flexibility of buying electricity when they need it and it allows a business to take advantage of the rates on the market.
Looking out for Additional Energy Services
Whilst it’s a good idea to look for the cheapest energy deals, it’s also important to keep an eye out for additional energy services. Some suppliers may offer additional services and support that can result in long-term benefits. These services can effectively help you save time and money.
- Online Information – An increasing number of suppliers are now offering online services for customers to help them track their usage and bills online.
- Personalised Services – For additional help with managing the account and energy usage, there are account holders which can assist a customer with queries and management.
- Reading Customer Reviews – When looking for different suppliers, it’s always a good idea to read their customer reviews. These reviews provide useful insights into which suppliers are willing to go the extra mile for a customer.
Knowing how Business Energy Prices are Calculated
There are various factors that make up an electricity deal and the overall prices can vary due to the contract and services included. Generally, the price that a customer pays for their business electricity contract consists of the following main factors:
- Wholesale – Wholesale energy is the cost of the energy that is purchased from the wholesale market. The prices can differ as they depend on the prices for global assets, such as gas and coal.
- Operating – The operating costs are the costs incurred to keep a business running smoothly. Factors such as staff wages and maintenance are considered to be operating costs.
- Distribution – Suppliers will also factor in the costs of distributing the electricity. There are various charges for transporting energy to the meters at each premise.
- Taxes – Business electricity suppliers have compulsory government-imposed duties, such as Climate Change Levy (CCL) and taxes. These may be included in the contract rates or they may also be separate charges on bills.
- Margin – Suppliers also take into consideration the amount of profit that is taken from the tariffs. The margin can then be reinvested into the business to further improve the level of service for customers.
Contact Compare Energy Online
If you are looking around for the best business energy deal, then we can help you. Simply use our tool to compare business energy online and we will help you find the best available electricity deals for your business. If you would like to discuss your needs with a savings expert, then please feel free to contact us.