Business owners need to pay close attention to their gas and electricity contracts to ensure they stay on a competitive tariff. The graphic below shows how a regular business owner could see price increases of 140% or more from failing to renew correctly.
Information and knowledge are essential to ensure your tariff prices stay stable each year.
There are many reasons why you may want to change your supply.
In most circumstances, simple amendments can be made without any administration fees. However, you should always check the latest pricing tariffs to ensure your tariff is competitive.
Although it's fairly straightforward to amend the policy, the onus is with the supplied building owners to manage the process. It's best to plan in advance for all five points below to reduce the risk of overpaying market prices.
Follow these steps to manage your renewal process effectively:
Credit checks are normally undertaken to assess the risk of non-payment. Change of tenancy agreements is usually the most problematic having a higher probability rejection.
If you successfully cancel your current agreement but omit to create a new one, then you'll be placed on "out of contract" tariff rates by default.
Where a change in ownership of premises occurs, deemed rates automatically take effect to maintain the supply of power to the building.
Both of these tariffs can be amended within a few weeks as no legal agreement is in force.
These are two of the most expensive type of gas and electricity tariff matrices applied by the suppliers. So although your monthly bill may appear reasonable, it's in your best interests to move off these rates as quickly as possible.
All pricing varies on a number of factors including the following:
In most cases, British Gas provides the most competitive rates for smaller businesses. Micro businesses with 03 or 04 type meters should receive unit prices from around 9.5p per kWh although we've seen rates as low as 5p per kWh.
The average estimated bill for electric consumption is £2,528 per year. This estimate is the result of research data from SME type businesses that comprise 95% of all UK registered organisations.
VAT is payable at the prevailing rate which is currently 20%. Companies registered for VAT can claim this back on their VAT return. There are reduced rates of 5% for residential customers and charities.
The serial number of your meter is not required for pricing quotes, although it aids accuracy. Your MPAN (Meter Point Administration Number) for electricity or MPRN (Meter Point Reference Number) for gas are found on the National Grid database, the meter itself or a recent bill.
The MPAN has two lines of numbers starting with a zero. The MPRN is six to ten digits.
You can get quotes for a single fuel or a dual fuel combination from at least 20 companies. The suppliers used within our quoting system include British Gas, Eon, Edf, ScottishPower, SSE, Gazprom, Npower, SWALEC, CNG, Shell Gas and independent companies.
All business gas and electricity contracts are for a minimum of 12 months. You can choose two and three-year terms although there's a small premium to reflect the risk associated with a longer term. Although not common, green tariffs using 100% renewable sources are also available.
There are common terms used in the industry. Below are the acronyms used and associated meaning:
If you have a contract that's over 12 months old, moving into new premises or are out of contract, then you could make savings of up to 70%.
In these cases, you'll likely be on the most expensive tariff offered by your current provider. These uniquely named tariffs are "rollover contracts", "deemed rates" or "out of contract rates".
Some of these tariffs are over 330% higher than the current "best buys" available in the market as shown in the following graphic.
As business contracts work differently to the residential market, you first need to terminate your current agreement. The renewal process is initiated by sending a simple termination letter to your current provider.
Use the address at the top of your latest invoice to send your letter. Once this has been undertaken you're free to shop around for the latest offers, then switch to your preferred option.
Switching contracts is immediate if you're on deemed or out of contract rates. Standard contracts switch the day after your current agreement ends.
If your business uses energy during the night or weekends then switching to a different meter could save you more money. Tariffs are designed to take advantage of lower rates during non-office peak hours.
If you're a large user, then you should have a half hourly meter installed so that you can monitor usage. Contact us to ensure you have the correct meter for your circumstances.
There are many ways to introduce energy efficiency measures into your organisation. Simply turning off appliances and lights could save as much as 10% per year. If you have an HH meter, then you can take advantage of energy management software to monitor trends and usage over time.
Our service is completely impartial and at no charge. We receive a small commission payment from the energy companies for each completed switch. You're under no obligation to take any tariff suggested during this process.
Although every business is different, there are averages used when calculating estimated rates. The annual average kWh consumption figures by meter type are as follows:
Please give our energy advisors a call on 0800 002 9822 who'll be happy to assist you.