Why Switch to Business Energy Tariffs?

investing in new equipment

Business energy tariffs differ from normal household tariffs in many ways, but primarily in how they are regulated. Business energy tariffs work much like normal energy tariffs but are specifically designed solely for business use. As a business consumer, you’re more likely to subscribe to a long-term contract (usually 1-3 year) and pay a flat rate fee for your energy usage, rather than go for an introductory deal where your energy charges suddenly shoot up. Although this means that on an annual basis, you’ll be paying considerably more for your utility, it’s a good deal from a business viewpoint – especially if you’re looking at investing in new equipment or premises.

Business energy tariffs also differ in another important way: how they’re paid. Unlike normal household tariffs, those charged by a business are paid off over an extended period of time, rather than all at once. This is known as a ‘long-term contract’ and works in conjunction with the law which aims to encourage long-term contracts and low inflation, so that utility bills aren’t affected by economic conditions during this time.

long-term contracts

As well as long-term contracts, there are other benefits to these types of business energy tariffs too. The flat rate fee means that your utility bill is unlikely to fluctuate much at all, whereas with a normal domestic tariff you might experience increases in both your consumption and your bill depending on fluctuating market conditions. If, for example, there are heavy seasonal increases in consumption caused by unusually warm weather in one area, your utility will likely charge you more throughout the whole season. However, during this time, your contract won’t change because your contract hasn’t yet expired. Instead, your provider will start collecting a different kind of bill from another place. This means that even when your domestic tariffs increase, your contract stays the same!

Of course, this also works in reverse – if your domestic tariffs decrease, then you’ll be charged more for your electricity use because the overall cost of running your business will be higher. If you take advantage of business energy contracts, however, then you can often get around this problem by changing your domestic tariffs to ‘level pricing’ deals which mean that your units will be charged the same no matter what the current market conditions are. In other words, if your domestic usage spikes slightly in January, you’ll still be able to benefit from the lowest unit rates available during that time.

Business energy tariffs

Business energy tariffs and dual fuel contracts differ in other ways too. Unlike domestic tariffs which are fixed for an entire billing cycle, Business energy tariffs are measured in months. For example, if your company is currently on a ‘pay as you go’ tariff and subsequently decides to move to a ‘bund’ tariff, you’ll only have to make a single change to your current contract, rather than having to arrange new domestic tariffs and domestic installation. Similarly, unlike domestic tariffs, where meter readings are regularly taken, Business energy tariffs are usually only changed when significant changes occur in the underlying market – such as if gas prices suddenly sky rocket. So, if you’re not expecting an enormous increase in your gas bill, you shouldn’t worry about switching to a Business energy tariff.

Finally, Business energy tariffs and dual fuel contracts are not regulated by the government, which means that you can be more relaxed about your policy. Whereas the UK Government hopes to introduce a national electricity market in the near future, they currently have no plans to introduce a similar scheme for business tariffs. If you’re concerned about saving money and protecting your assets, a Business energy tariff is a great choice. You’ll be paying less for the electricity you use and will still be benefiting from some of the best green energy benefits in the country.

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