Running a small business can be difficult. Add on all the business utilities to manage, and it becomes that much more time consuming.
Finding a great deal on your business electricity can be as easy or as hard as you make it. You just need to know where to look. Luckily, you’ve landed in the right place.
You’ll find some great exclusive small business electricity prices using our comparison engine and we will even take care of the switching process for you. That means finding cheaper business electricity prices is just a few clicks away.
In this guide, we will let you in on some secrets that could help you save money when you compare small business energy.
First up, prices can depend what size of business you fall into in the eyes of the energy industry. You may fall under a micro business. This is a good thing, as there are some unique benefits to being seen as a micro business.
Ofgem defines a Micro business consumer as a non-domestic consumer that meets one of the following definitions:
- Uses less than 100,000 kWh of electricity per year, or
- Uses less than 293,000 kWh of gas per year, or
- Employs fewer than 10 employees (or their full time equivalent) and has an annual turnover or balance sheet no greater than €2 million (approx: £1.8 million)
If you pay less than £12,000 per year for either electricity or gas you may be considered a micro business. So how will this save money on business electricity prices?
Benefits of being a micro business
The majority of small businesses in the UK meet one or more of the criteria above, and so may benefit from the following benefits:
- You can give your termination notice at any time during your contract
Unlike larger businesses, you don’t need to worry about renewal windows when looking for a new contract. The maximum notice period for terminating a micro-business contract is now just 30 days. If you feel liked your business energy prices are too high, you can switch suppliers at any time.
Ofgem also states that:
“Suppliers must also clearly state the contract end date and notice period on bills and statements of account for micro business consumers on fixed term contracts.”
“Suppliers must take all reasonable steps to acknowledge termination notice within five working days of receipt.”
This gives your company much more control of utilities and means you can consistently find the best business electricity prices on the market.
Your fixed term renewal letter must include your current business energy prices, new prices and annual consumption
Historically business energy suppliers would send confusing and unclear renewals that made it difficult to understand your options.
This Ofgem rule is designed to make it as easy as possible to compare business energy suppliers. It’s always best to compare electricity prices online as you will often find a better deal.
With over 50 business energy suppliers now operating in the UK, it’s unlikely you’re on the best available tariff and now you can quickly compare and easily find out.
Ofgem’s Standards of Conduct (SOC) covers most, but not all, interactions with your supplier
Under Ofgem’s Standards of Conduct suppliers have to ensure they treat micro business consumers fairly with respect to billing, contracts and customer transfers.
‘SOC’ covers everything from fair small business energy prices, right through to accurate billing. This places much more power into the hands of small business owners so they can find the best deals on their gas and electricity.
However, Ofgem does not regulate back-billing
Ofgem defines back-bills as: “catch-up bills for historical charges and relate to periods further back than normal billing.”
Back-billing usually occurs when the supplier has estimated gas and electricity usage. Sometimes this leads to the estimated usage being lower than the actual amount used. Some business energy suppliers will pick up on this early, but it can leave a small business with a surprise bill at the end of the contract.
Obviously, back-bills can significantly harm a business’ cash flow, especially if the issue goes back several years. That’s why most major suppliers now voluntarily limit the back-billing duration when they are at fault to one year.
However, the emphasis is on voluntary, which means they under no legal obligation to do so and not all suppliers follow this guideline.
So as a small business owner you should make sure and ask what a supplier’s back-billing policy is before switching business electricity.
How to get cheaper business energy deals
It is much easier to find competitive business electricity prices and regularly looking for a better deal can help businesses save a significant amount of money on their energy bills.
Understanding electricity rates and standing charge
It is important to understand how your business uses energy. This guide provides some useful information when selecting your new energy supplier. Sometimes a tariff may seem cheaper with low electricity rates, but the low prices are often offset with a higher standing charge. This is not always the case, but it is something to check before committing to a business energy contract with a new energy supplier.
Understanding price per kWh of electricity
As many business electricity prices quoted are based on estimates, it may not accurately reflect the actual monthly price you will pay for business electricity prices. Your energy bills will be calculated on the price per kWh.
This means that the actual monthly price of your business electricity will be calculated on actual usage charged at the electricity rates set by your energy supplier.
Here’s an example of business electricity rates set by an energy supplier: (this is an example only and prices may differ.)
- Price per kWh of electricity = 16.17p
- Daily standing charge = 27.40p
- Annual usage = 8,000 kWh
- Annual cost = £1,393.61
- Estimated monthly cost= £116.13
*both price per kWh and daily standing charge are averages for micro businesses taken from UK Government.
What happens at the end of the business energy contract?
Energy suppliers will move companies over to a variable rate tariff. The business will be charges at the current market rate and prices can fluctuate from month to month. If electricity rates are low, your business could save money; but in most cases these tariffs tend to be more expensive for both business gas and electricity.
It is often advised and better for companies to compare business energy supplier to find a suitable fixed rate tariff to find the best electricity prices available.
Small Business Electricity FAQs
What is a standing charge?
A standing charge is a fixed daily amount that energy suppliers charge to cover the costs of supplying gas and electricity to your business premises or home. Some suppliers offer tariffs without a standing charge, but these will often have higher electricity rates.
Do all suppliers offer small business energy tariffs?
Not all energy suppliers offer business energy. However, there are lots of options to save on energy bills. You’ll find lots of suitable energy suppliers offering business energy tariffs when you compare business electricity and gas.
Can I switch gas at the same time as business electricity?
You cannot switch a dual fuel contract. However, you are able to switch your gas and electricity at the same time. These will just be two separate energy switches. You may want to switch both fuels to the same energy supplier to make managing your gas and electricity easier.
Compare business electricity in minutes to see how much you could save.