Time to end ‘small business energy rip-off’
If you run a business, you’ll appreciate just how time-consuming switching energy supplier can be – not only are there no ‘off-the-shelf’ tariffs to choose from, meaning you’ll have to get individual quotes from each and every supplier, no dual-fuel option means you need to get separate deals for both gas and electricity.
And if you don’t switch within a certain timeframe, and before your current deal ends, you could find your business is automatically signed up for another year, on a more expensive rate.
So, even if you’re used to switching gas and electricity at home, you still may struggle to get your head around business energy switching.
How does business energy differ from domestic energy?
Here are the main ways business energy differs from domestic energy:
- Cheaper energy - Commercial energy is bought in bulk to last the entire length of your contract, and this often means businesses are charged a lower unit rate than domestic customers.
- Longer contracts – While most domestic fixed-term energy deals last for between 12 and 18 months, business contracts are taken out for an agreed term that can be anything up to five years. And because the energy for each contract is bought in bulk and up front, it’s often all but impossible to terminate these contracts early.
- Six-month switching window – Business energy contracts come with a set time-frame during which you can compare tariffs and agree to switch supplier. This means you won’t be able to switch to a new energy deal until your current contract is within its renewal window, which is usually between one and six months before it’s due to end. And your new deal won’t then start until your current one has expired.
- No dual fuel – Energy suppliers don’t offer dual fuel contracts for businesses.
- No ‘off-the-shelf’ tariffs – Each business has different energy demands, and so suppliers don’t offer businesses the same ‘off-the-shelf’ tariffs they offer domestic customers. Instead, suppliers assess the needs of each business on a case-by-case basis and offer a bespoke quote accordingly.
- No cooling-off period – Business energy deals don’t offer any sort of a cooling-off period - once you’ve signed you’re contract, you’re locked in, so make sure you read through all the terms and conditions before you sign up.
What’s the problem with business energy?
Arguably the main issue with business energy deals is that when your contract comes to an end, your supplier can switch it to a default tariff with little warning, which can result in a price increase of 50% or more.
Figures from the Competition and Markets Authority (CMA) has found that 45% of microbusinesses (broadly speaking, those with fewer than 10 employees) were stuck on their suppliers’ most expensive default tariff.
And the CMA also estimates that small businesses pay about £500m more a year than they should be for gas and electricity.
Although suppliers can no longer automatically impose expensive rollover contracts on microbusinesses, and must publish online prices for commercial customers to make comparing and switching easier, it’s still all-too-easy for business owners to find themselves on more expensive rates.
How to switch business energy
The best way to make sure your business isn’t paying over the odds for its energy is to give the business energy experts at UKPower a call on 0800 326 5517 , or leave a few details and request a call back, and we’ll compare the market to make sure you get the best deal for your business.
Give us a call as soon as your contract enters its renewal window. If you don’t know when your renewal window starts, your supplier will be in touch with a renewal offer, and you can shop around for quotes when this arrives.
Or, if you know a small business owner who may not have thought about saving money on their energy bills, point them in our direction, and see how much we can save them.
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.