Many people are starting to switch their energy providers every year, whilst some people may sit back without knowing they could be saving a considerable amount of money for their business. Whether your business is based in a large built up office or if it’s a small business based in your garage there are plenty of areas to research and find the cheapest energy supplier for you.
A simple way to check the best deal could be by using online comparison websites which will inform you on the cheapest energy providers in your area. Therefore, where your business is based could be the difference between a low energy bill and an expensive one. Despite many people choosing to stay with the same provider, there can be cheaper options and it is worth considering the possibility of switching.
Many businesses are on fixed contracts for their energy supply. When the contract continues after the fixed term period, this can be known as a “rollover” or “evergreen” contract. Therefore, this means if your businesses energy contract renews without you checking it, it might go up in price and therefore not be the best deal for your company. The reason that many businesses just let their contract continue is that it is convenient and easier to ignore it. They may be put off if they think changing energy suppliers may incur a penalty charge depending on the wording of the contract. So, it’s worth researching into how far in advance you would need let the energy provider know if you were to switch to a different provider. It is also important to note that some energy providers offer loyalty discounts – ensure that you are not benefitting from a discount that you will then lose by switching to another provider. Additionally, check if your current energy provider and any potential new providers offer incentives such as a discount for paying by direct debit.
The further in advance you can plan a switch over the better. You don’t want your business to face possible out- of contract rates, which can result in being charged more than your original contact. It is not the energy providers fault as they are not obligated to give you the lowest rate when you reach end of contract. This is something to factor in, and therefore checking regularly what you are being charged and the current contract length and remind yourself of any exit conditions is good practice. There is normally no charge to get quotations from other suppliers even when you are in contract, so you are able to move quickly when the time comes. Business contracts are not as simple as domestic, so in most cases the supplier will need to obtain specific information to give you different quotations.
Additionally, when obtaining quotations, enquire about combined bundle deals for gas and electricity. Whilst domestic customers benefit from these under the term ‘Dual Fuel tariffs’, these are not available to businesses as tariff products, but they might add some form of discount as an incentive, to encourage you to take both from a single energy company, rather than you are getting supplied from different companies. Sometimes other services such as annual equipment servicing or emergency callout for heating or appliances can also be combined with these deals. This will also make bills easier to organize for your business.
Now move onto to some complicated regulatory changes introduced by Ofgem in April 2018 around business electricity consumers who have metering equipment called Half Hour meters. In simple terms this means if your business uses a HH meter, and your business exceeds the electricity usage in your contract, you could be liable to penalty charges. Again, this comes down to you to understand your energy supplier contract, and in this case, you should know your electricity site meters available capacity and maximum demand levels associated with the electricity supply. To avoid penalties if you go above these levels you may need to agree a revised capacity figure specified in the contact or look at how you can reduce your energy demands during these periods.
So in summary, business customers need to be proactive, regularly review the offering they receive, and need to prepare well in advance in order to switch to single or multiple suppliers if necessary. Before switching though, make sure the suppliers run through all the contract small print, and discuss the impact of any regulatory changes that might impact you. After all the suppliers need your business, so make sure they work hard for you too.
If you’re interested in cutting down on your running costs, energy is not the only area in which you can find a cheaper deal; ensure your bank account is the best option for your business model as well, and consider switching banks if you can get a better deal elsewhere. DLR Accountants can help save your large or small business money; we offer free advice to all of our clients, and work hard to ensure their businesses are as successful as possible; get in touch for more information, or to arrange a free consultation.