Compare business energy contracts

Whatever industry your business operates in, it will rely on energy to either light and heat a workspace, or run essential equipment – so you’ll want to make sure your on the lowest rates possible, and the best way to do that is to compare business energy contracts and switch supplier at the end of your current deal.

The UKPower team are experts in business energy, and it’s our job to compare the market for the best business and domestic deals for our customers. Give our energy experts a call now on 0800 326 5517 to see how much your business could save.

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"Don't switch" is good advice for households. But business energy is different and there's no price cap to protect you*. "Compare now" is good advice for businesses!

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*with no price cap in place for businesses, some out of contract rates are up between 15% and 120%

What are the different types of energy contract?

Different businesses have different demands, and that’s why there are multiple energy tariffs - it all depends on the need. Securing the right energy deal for your business can reduce cost, bring your contracts into line with each other and allow you a more manageable hold on your utility bills.

Here are the main types of energy contracts available to businesses:

  • Fixed term contract - This type of deal allows you to fix the cost per unit (kWh) that you pay for your energy. The fixed cost isn’t per bill, and the more you use the more you will pay.
  • Variable-rate contract - Your unit rates are linked to market activity, meaning they can increase and decrease throughout the duration of your contract. Unlike fixed term deals, you can’t easily calculate your own bill through usage as cost changes.
  • Blend and extend contracts - This type of deal allows you to extend the length of your current contract with the same supplier, who will then usually offer you lower rates. If you’re offered this type of deal, you should still shop around to see if you can get a cheaper contract from another supplier.
  • Flex approach contract – Designed for businesses with a high energy demand, this type of deal allows to gamble on the energy market and bulk-buy energy when prices are low. There is always a risk that you could find yourself out of pocket if you buy before a price drop.
  • Pass through contract – This splits your bill between the fixed wholesale rates and other costs, including Transmission Network Use of System (TNUoS) charges, National Grid levies and Feed-in Tariff charges.
  • Deemed rate contract – Also known as an out-of-contract rate tariff, this is a rolling contract with expensive rates that are arranged by suppliers for customers with no formally agreed contract. You want to avoid this where possible.
  • 28-day contract - A contract for businesses who haven’t switched their deal since the energy market deregulation came into effect.
  • Rollover contract – This is used when the customer hasn’t agreed a new deal since their previous end-date. A rollover deal is usually the most expensive tariff.

It doesn’t matter the size of your business, the aim is to get onto a fixed-term deal. Although business energy contracts might not feel important, they’re a good place to reduce your overheads with little effort.

If you’re currently on a deal that you’re not happy with, or you think you’re paying too much for your gas and electricity, compare prices online with us or give our experts a call on 0800 326 5517.

Do you need a business energy contract if you work from home?

Business rates aren’t only there for large companies. Smaller businesses or sole traders can benefit too. Even if you work from home (which will usually mean you can define yourself as a microbusiness), you can still have a commercial tariff. If this is you, you can even profit from shorter notice periods and shorter cooling periods, not dissimilar to that of a domestic customer.

What is a microbusiness?

A microbusiness is defined by the European Commission (EC) as a venture with fewer than 10 employees and a turnover or balance sheet total of less than €2 million. In order to qualify for a microbusiness energy contract though, the criteria is slightly different, and your business must use less than 200,000 kWh of gas or 55,000 kWh of electricity a year.

Are you eligible for a business energy contract in your home?

There is one key figure that matters to an energy supplier when judging your eligibility for a commercial contract in your home. You must use around 50% of your home’s energy running your business to qualify. This might seem quite a lot, but simply using the lighting, power sources for computers and heating can push you towards and over that limit.

When you’re trying to calculate how much energy you use, do remember that estimating using for business electricity contracts shouldn’t reflect any appliances that would have been used regardless of whether you were home or not. We’re talking fridges and freezers, etc. This wouldn’t count towards what is classed as commercial use.

If you need help or advice on classification, then give our team of experts a call. They know these issues inside and out and are always willing to help.

Business energy contracts for large businesses

There are specific parameters of classification for what energy companies define as a large business. If your company consumes more than 55,000 kWh of electricity per year, or more than 200,000 kWh of gas per year is considered large or industrial.

Of course, this is a large amount of energy. If you can reduce the cost per unit used even by a little, your overall overheads will plummet. Whether you’re looking for a new business gas contract, looking to reduce your electricity bill, or just looking for advice, we’re here to help. UKPower offers a completely free service to all customers, so why wait to give us a call? The sooner you ring, the sooner you can reduce your costs.