When you switch business energy, you will have the choice between a standard tariff and a no standing charge tariff.
To choose the right tariff for your business, you will need to consider how you use gas and electricity. In this guide, we look at what exactly a standing charge is and whether you could reduce your energy bills with a no standing charge tariff.
What is a Standing Charge?
A standing charge is a fixed daily fee paid to your energy supplier. The fee covers the cost of your energy supplier including:
- Keeping your premises connected to the main gas and electricity supply
- Carrying out meter readings
- Meeting payments for government initiatives.
Your standing charge is not linked to your energy usage. This means that you will be required to pay a standing charge even if you used no energy that day. If you’re on a dual fuel tariff, you will pay both a business gas standing charge and a business electricity standing charge.
Your standing charge will usually be displayed on your energy bill in pence per day, although some suppliers may display pounds per month or quarter.
How much do Standing Charges Cost in 2021?
The cost of standing charges can vary quite significantly from supplier to supplier and tariff to tariff. Business standing charges in 2021 can cost between 15p and 160p per day. The average standing charge is approximately 28p per day.
At 28p per day, standing charges would add around £102 to your yearly gas or electricity bill.
What is a No Standing Charge Tariff?
As the name suggests, a no standing charge tariff sets the cost of your standing charges to zero. This means you will only be required to pay for the energy you use.
Unit rates will generally be higher with no standing charge tariffs. However, you may be able to reduce your overall energy bills depending on how you use gas and electricity.
What are the Pros and Cons of a No Standing Charge Tariff?
If you switch to a no standing charge tariff, there are a few main pros and cons:
- You will only pay for energy when you use it
- Your energy bills will be easier to calculate
- Your unit rate can be higher than tariffs which include a standing charge
- No standing charge tariffs could increase bills for businesses with high energy usage
Should your Business switch to a No Standing Charge Tariff?
A no standing charge tariff is best suited to businesses that operate seasonally infrequently. When your business is closed, you won’t be faced with any standing charges whilst your energy usage is low.
Whether your business is only open at weekends or operates in the summer months, a no standing charge tariff could reduce your energy bills.
The amount of energy you use will also affect whether a no standing charge tariff is right for you. Businesses with high energy usage could be left with more expensive bills due to higher unit rates. However, if your energy usage is relatively low, a no standing charge tariff could reduce your energy costs.
How to Switch to a No Standing Charge Tariff
The process of switching to a no standing charge tariff is mostly the same as switching to any other tariff. All the big six suppliers and many independent suppliers will offer no standing charge options.
When switching energy tariffs, it’s important to compare the full cost of any gas and electricity contract. When comparing with Business Energy, you can view the full cost of your chosen tariff based on your estimated usage.
Our comparison service allows you to compare no standing charge tariffs from a wide range of trusted business energy suppliers. You can also receive advice on the right tariff for your business from our expert team of advisers.
To find out how much you could save, simply compare the latest business energy prices with the experts at Business Energy.