Business gas and electricity tariffs
Get an energy tariff that suits the needs of your business.
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Energy is an essential commodity that almost every business needs to operate, and different businesses naturally use varying levels of gas and electricity.
As such, energy contracts for businesses take a variety of forms in order to meet the range of energy needs that exist among Britain’s companies. It’s useful to develop an understanding of your business’s usage requirements in order to secure a business energy tariff that’s best suited to your consumption habits.
When deciding which business energy tariff is right for your company, certain considerations need to be made, such as:
- How much energy you use.
- Where your business is located.
- Your business's financial situation.
There are a number of different business gas and electricity tariffs available for those looking for a new energy contract, with fixed term deals most common among smaller businesses.
Fixed term tariffs
A fixed term tariff is a contract that sets out how much a business will pay for its energy. This includes a specific price per unit for the gas or electricity a business uses, as well as a daily standing charge that’s payable irrespective of how much energy a business consumes. The cost per unit and standing charge will not change for the duration of the contract, with these deals typically lasting anywhere between one and four years.
Fixed term tariffs help businesses manage the amount they spend on their gas or electricity, as owners and decision makers know how much they’re paying for the energy they use throughout the duration of their deal. A set tariff also protects businesses from expensive out of contract rates.
If you have a fixed term deal, it’s important to be aware of your contract end dates to avoid being automatically transferred onto more expensive rates when your deal expires. Allowing your energy deal to expire without organising a new tariff can result in you paying much more than you need to – but this can be avoided by acting early and switching to a better deal before your existing contract finishes.
It’s worth noting that business gas and electricity contracts are always separate, so can run for varying lengths of time with different start and end dates.
Alternative business energy contracts
There are other, less popular tariffs available for businesses in specific circumstances – for example those that consume a significant amount of energy. These tariffs include:
- Blend and extend tariffs:
These deals allow businesses to reduce the amount they’re paying for their gas or electricity in the long-term. By extending the length of their current contract and averaging it with a better value deal from the same supplier, businesses can keep the costs of their energy consumption down.
- Flex approach:
Larger businesses sometimes look to bulk purchase energy in advance, so they know how much they’ve paid when it comes to using it. On a flex approach contract, a business can take advantage of favourable energy market activity by purchasing energy for the months – or years – ahead, usually when costs are low. However, this can be a risky strategy if a business is caught out of contract when energy prices are high.
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