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Managing costs as a small or micro business is crucial. Yet many small businesses are losing out when it comes to their energy. Failing to switch your energy supplier can leave you significantly overpaying on your small business electricity prices.
The process of switching small business electricity suppliers couldn’t be simpler. You can even compare the latest prices and complete your business energy switch online.
At Business Energy, we offer a comparison of exclusive deals from our wide range of trusted small business electricity suppliers. Once you’ve found the right business electricity tariff for you, the switching process is seamless.
Each year thousands of small and micro businesses save hundreds of pounds by switching to a cheaper energy tariff.
The Average Small Business Electricity Prices
Business electricity will make up most of your energy bill. This means it's crucial to ensure your business is not overpaying.
The average micro business electricity prices are around £1,842 per year. The average small business electricity prices will come to around £4,160 per year.
This does vary industry by industry and it’s important to bear in mind that these are far from the cheapest tariffs available. Here, you can find a breakdown of the average small business electricity prices.
|Business Type||Usage per year||Unit price||Standing charge||Cost per year|
These prices are for Q2 2022. Source GovUK. Updated October 2022.
If you’re paying close to or above these average prices, it’s likely you can save money by switching business electricity suppliers. Comparing energy prices is simple and it just a few minutes, you can find out how much your business can save.
How do SME Contracts Differ?
Small businesses have more flexibility when switching energy suppliers. A micro business is covered by extra protections offered by the energy regulator Ofgem.
A micro business is defined as:
- They employ fewer than 10 employees and has an annual turnover or balance sheet no greater than £2million.
- They consume no more than 100,000 kWh of electricity per year
- They consume no more than 293,000 kWh of gas per year.
Ofgem requires all energy suppliers to put the end date and notice period on all fixed-term contracts. This means that small businesses have the right to tell your supplier you want to switch at the end of your deal. They can notify them at any time before the notice period.
60 days before your fixed-term contract ends, suppliers must provide details on energy usage. They must also provide detail on how your current deal compares to new prices. Energy suppliers can only ‘roll over’ the contract of a micro business for a maximum of one year.
Why You Should Switch Your Small Business Electricity Supplier
Switching your small business electricity supplier is the easiest way to reduce costs. There’s limited loyalty in the energy industry. Newer customers will receive the cheapest prices.
Switching with Business Energy means you will have a dedicated account manager. This ensures your switch goes smoothly. Your account manager will be in touch when it is time to renew, making sure you do not get placed on any expensive out of contract rates.
As with the insurance market, new commercial gas and electricity customers receive the most favourable terms. That’s why it’s important to compare small business electricity prices before the end of your contract.
When you switch with Business Energy, we guarantee that we’ll beat the price in your renewal letter.
How To Find the Best Small Business Electricity Prices
It is vital for small businesses to avoid being placed on rollover contacts. These deals will often leave you on some of the most expensive rates offered by your supplier. You will then be left overpaying on your business electricity for at least one year.
When approaching your renewal window, there are three common options to get current rates:
- Ask your current supplier for a quote. Their offer will likely be uncompetitive.
- Visit each supplier’s website to get quotes, although not all have online pricing tools.
- Use a broker to search the whole market and present all available options to you.
Going from supplier to supplier comparing prices can feel like a waste of time. You’re likely to miss out on deals meaning you won’t have access to the best electricity prices.
By comparing with business Energy, you can have instant access to a wide range of trusted small business electricity suppliers. You can compare prices from the big six energy suppliers to smaller, independent providers.
The process is quick and hassle-free. You’ll even have an account manager on your side to provide advice on the best energy deals for your business.
Choosing the Right Tariff for Your Small Business
When comparing small business electricity prices, you will have a range of tariff options. Knowing which deal will best suit your business can be difficult.
Your first decision will usually be the length of contact. Most business energy contract will last between one and three years. The length of contract you choose will depend on how much flexibility you would like as a business. It’s important to remember that exit fees are often much higher than domestic tariffs.
The tariff type you choose will depend on how and when you use your energy. When you compare business electricity, you will usually choose from the following tariff types:
Fixed Rate Tariff
A fixed rate tariff offers a unit price that stays the same throughout the period of your contract. Your business won’t be affected by any changes in the price of gas and electricity during your contract.
This can be a good option if you prefer certainty as a fixed rate tariff can make your energy bills easier to manage.
Variable Rate Tariff
As the name suggests, variable rate tariff offers unit prices that can change during your energy contract. If the price of electricity drops, your unit rates will also be reduced by your supplier. However, if the price of electricity goes up, your unit rates will also increase.
A multi-rate tariff offers your business different unit rates at different times of the day. The most common multi-rate deal is an Economy 7 tariff. This offers two different rates – off-peak at night and peak during the day.
With a multi-rate tariff, you will benefit from cheaper unit rates during off-peak hours. However, your peak hour unit rates will usually be higher than standard tariffs.
Hospitality businesses such as bars and restaurants which operate mostly at evenings and weekends can benefit from multi-rate tariffs.
No Standing Charge Tariff
All energy tariffs include a standing charge which is a daily fee paid to your supplier for providing electricity to your premises. Your standing charge will apply no matter how much energy you used that day.
With a no standing charge tariff, this fee will be set to zero. This means that you will only be required to pay for the energy you use. This can benefit businesses that operate seasonally or only open a few days a week.
Managing your business electricity renewal
Businesses are tied into a contract with their supplier until it finishes. This means it is essential you're happy with the terms you are agreeing to.
Renewal windows can open anywhere from 120 days to one week before the contract ends. Then the enforcement of automatic extensions takes place.
Ensure You Know When to Renew
Knowing in advance when your renewal window opens is critical. You can set up reminders for your end dates. This ensures you do not miss standard termination letters that guarantee your right to switch.
At Business Energy, all we need from you is your business address, the name of your supplier and your average monthly bill. This information will help us find the best deals available for your business.
Why Compare With Business Energy?
Finding the best deal for your small business can be a time-consuming process.
At Business Energy, we do the hard work for you. Our comparison tools allows you to compare business electricity tariffs in a matter of seconds. We’ve built strong relationships with small business energy suppliers. This means we can get some of the best business energy prices available.
We want to ensure that our customers do not have to overpay for their business energy. That is why we’ll be in touch with you towards the end of your contract. This ensures you stay on the right deal for your business.
Small Business Electricity FAQs
How are Business Electricity Prices Calculated?
Each small business energy supplier has a rate book. These have thousands of individual prices. It’s unlikely that two adjacent buildings have the same unit and standing charge. The factors that influence these charges include:
- Your meter type and profile number.
- The region of the country that you’re based.
- What your peak demand usage threshold is.
- The length of your agreement in years.
- The payment method of your monthly invoice.
- Your company’s credit rating and score.
- Your annual consumption data.
Additional discounts are provided for dual fuel contracts. Some suppliers offer a discount for payments made by direct debit.
What Other Costs are Involved in Energy Prices?
After your unit rate and standing charge, businesses are required to pay the Climate Change Levy (CCL). The CCL is an environmental tax that is applied to your bill by your energy supplier. You can find out more about the Climate Change Levy here.
Businesses are also required to pay tax on their energy bills at the standard rate of 20%.
Can a Charity Receive Discounts on Energy Bills?
If you run a charity or non-profit, you are exempt from paying the Climate Change Levy. Charities are also entitled to pay a discounted VAT rate of 5% on energy bills.
If you haven’t been receiving these discounts, you should contact your supplier to make them aware of your charitable status.
Can I Stay with my Existing Supplier when Switching?
By comparing business electricity with us, you can find a better deal from your current supplier.
You’re under no obligation to change your supplier when comparing with us. Many customers have made savings by switching to a new deal with their current supplier.