Let’s be honest – navigating business energy prices can feel like learning a new language.

Whether you’re a solo entrepreneur or managing a team, trying to make sense of your energy bill isn’t always the easiest task. But understanding it can be the key to reducing costs and keeping your overheads in check. So, let’s break down business energy prices in a way that’s simple, straightforward, and designed to help you stay in control.

Business Energy vs. Home Energy – What’s the Difference?

At first glance, energy is energy, right? You might expect your business energy bill to look a lot like your household one. But here’s the twist: business energy comes with its own set of rules. Unlike home energy, where rates tend to be pretty consistent, business energy prices fluctuate based on things like your company’s size, energy consumption patterns, and even your location. There’s also VAT and the Climate Change Levy (CCL) to consider, which can add to the complexity.

While it can seem daunting, understanding how these components affect your bill can help you make smarter decisions about your energy use.

What Makes Up Your Business Energy Price?

Business energy costs are generally broken down into two main charges:

Unit Rate: This is the price you pay for each unit of electricity or gas (measured in kilowatt hours, or kWh) that your business consumes.
Standing Charge: A daily fee that covers the cost of supplying energy to your premises, regardless of how much energy you use.

These two charges form the bulk of your bill. However, prices can vary greatly depending on the supplier, your consumption habits, and the kind of contract you have. Some suppliers might offer more competitive rates for larger businesses, while others might offer attractive packages for smaller, more energy-efficient operations.

Fixed vs. Variable Rates: Which is Right for You?

Choosing the right energy rate structure can make a big difference to your monthly bill. Let’s break it down:

Fixed Rate: Locking in a fixed rate means your energy cost per unit remains the same for the length of your contract. This option provides stability and makes budgeting easier since you won’t be caught off-guard by market price fluctuations. However, if energy prices fall, you won’t benefit from the savings.
Variable Rate: With a variable rate, your energy prices will fluctuate in line with market conditions. This means you might benefit from falling energy prices – but if prices rise, so will your bill. Variable rates can work well for businesses that are willing to take on a bit of risk in exchange for potential savings.

Simplifying the Supplier Search Process

We all know how overwhelming it can be to choose between energy suppliers. But don’t let the sea of quotes and offers stress you out. Here’s a simple process to help you streamline your search:

Know Your Usage: Your annual energy usage, typically measured in kilowatt hours (kWh), is a key factor in getting accurate quotes. Look at previous bills to see how much energy your business typically consumes.
Compare Suppliers: Not all energy providers are created equal. Shop around and compare multiple quotes. Pay attention to the unit rates and standing charges offered by each supplier, and don’t forget to check the length and terms of the contract.
Beware of Hidden Fees: Some suppliers may offer enticingly low rates but sneak in extra charges, like early exit fees or installation costs for new meters. Make sure you read the fine print.

Timing is Everything

The timing of your switch or renewal can have a big impact on the deal you get. If your contract is coming to an end, don’t leave it until the last minute to find a new supplier. Start looking a few months in advance so you can take your time and secure the best rate. Also, if market prices are unusually high when you’re renewing, consider shorter-term contracts until things stabilise.

Green Energy: Good for the Planet and Your Wallet?

More and more businesses are making the switch to green energy – and for good reason. Green tariffs, which rely on renewable sources like wind, solar, or hydropower, can reduce your carbon footprint and align your business with eco-friendly practices.

Many suppliers now offer green energy plans that are competitively priced, meaning you don’t necessarily have to pay more for being environmentally conscious. So, if going green is important to you and your customers, it’s worth exploring these options.

Top Tips for Cutting Your Business Energy Costs

Of course, reducing the amount of energy your business consumes is one of the most effective ways to cut costs. Here are a few quick tips:

Switch Off Equipment: It might sound basic, but making sure lights, computers, and equipment are turned off when not in use can lead to significant savings.
Upgrade to Energy-Efficient Lighting: If your business still uses traditional bulbs, switching to LED lighting can drastically reduce your energy consumption.
Smart Meters: Installing a smart meter can help you monitor your energy usage in real time, allowing you to identify peak consumption periods and adjust accordingly.

Use a Consultant You Trust

Here’s the most important takeaway: when it comes to business energy prices, don’t go it alone. The energy market is full of complexities, and trying to navigate it on your own can be overwhelming. This is where having a trusted consultant, like Pause People, can make all the difference.

An experienced energy consultant can help you:

Understand Your Options: They’ll break down the jargon and present the best options for your specific business needs.
Find the Best Deals: With access to the entire energy market, they can compare rates from multiple suppliers, ensuring you get the best value for money.
Avoid Hidden Costs: They’ll comb through the fine print and spot any sneaky fees that could cost you down the line.

Instead of settling for whatever offers land in your inbox, work with a consultant you trust. Pause People can help you not only save money but also give you the peace of mind that comes with knowing you’ve made an informed decision.