The short answer is that while it may be possible, it usually isn’t going to be your best deal.
Standing Charges Explained
A standing charge is the amount you’re charged regardless of how much energy you use that day. Therefore, in theory you could use no energy and still have to pay.
Standing charges are given as a price per day called a daily standing charge. You don’t actually pay it each day, just when your bill is due. So if you pay monthly you’d multiply the daily standing charge by 30 (or 31) and if you pay quarterly you’d multiply by 91.25.
Most electricity and gas tariffs in the UK for both domestic and business customers include a standing charge as part of the normal amount you pay. Given that most users will use at least some power or gas, it’s normally not a big deal.
How much are standing charges for business customers?
Typical daily standing charges for business electricity range from 15p to 160p per day and for business gas 25p to 130p day.
The energy companies like standing charges because it gives them a degree of revenue predictability. They know no matter what they will be getting at least some money from you. This helps them pay for investment in the UK’s energy infrastructure.
However, just because it’s good for the UK’s energy companies, does not mean it’s good for you and your business.
Why you may want a no standing charge business electricity or gas tariff
While most businesses in the UK operate year round, and hence use energy year round, not all do. Seasonal business such campsites, holiday resorts, ice cream parlours, etc. may only operate for part of the year.
If you own a seasonal business, this means you’d end up still having to pay energy bills even when you’re not using any energy!
Moreover, even if you don’t run a seasonal business but take time off for holidays or even just weekends you can end up paying for electricity and gas when you’re not using it.
So the easy solution is opt for no standing charge contract, right?
Not so fast!
Downsides of No Standing Charge Business Energy Contracts
Remember, when we pointed out that energy companies love standing charges? Well they love them so much they’ll make it difficult for you not to opt for tariff that includes them.
Basically, most no standing charge contracts just charge more for every kWh of electricity or gas you use. So while you may save money when your business is not open, you’re spending much more when it is.
So when making a comparison it’s vitally important that you not only look at the standing charge but also the price you’ll be paying per kWh for gas and electricity, since this make up a far larger part of most people’s bills than the standing charge portion.
Even a slightly higher rate for electricity or gas could end up costing you more in the long term.
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