There are a number of major differences between business energy and domestic energy. It’s important that you’re aware of these when searching for a business energy deal so that you don’t end up switching to a contract it’s difficult to get out of and paying way more than you need to.
What is business energy?
Simply put, a business energy tariff is one that’s been specifically designed to supply gas and electricity to a place of work.
The vast majority of business energy customers will benefit the most from a fixed term contract. Unlike a variable rate tariff, these lock in one set price per single unit of energy so you won’t be affected by any fluctuations in the market.
How is business energy different from domestic energy?
Although they provide the same basic service, there are several significant differences between business and domestic energy.
> Your business energy contract is tailored to you
Due to elements like the size of your work space, what sort of industry you belong to and how many employees there are, the energy needs of individual businesses differ greatly, much more so than with domestic properties.
Therefore, it’s not just a matter of choosing from a selection of pre-existing business energy deals. You’ll need to seek out different quotes for your gas and electricity that have been tailored to meet your requirements.
> You will need to take a separate gas and electricity deal
When shopping around for domestic energy you’ll have the ability to purchase what’s known as a dual fuel tariff, so when you get your gas and electricity on the same deal from the same supplier.
These unfortunately aren’t available with business energy which means you’ll need to purchase separate gas and electricity contracts.
> Business energy contracts are usually longer
The majority of domestic energy tariffs are available on either a year or two year contract. A business energy deal however can last anywhere from one to five years
> There’s no cooling off period
The cooling off period refers to the 14 days after you’ve switched your energy in which you’re able to cancel without incurring any charges. This doesn’t apply to business energy contracts so it’s essential you take some time to shop around for the best possible deal.
> It’s more difficult to cancel your business energy contract
Along with their extended lengths and the fact they don’t offer a cooling off period, business energy contracts don’t always allow you to switch midway through. Those of them that do will require you to pay a hefty exit fee.
The only time you’re able to switch to a new business energy deal is during your renewal window. Exactly when this will occur differs quite a bit from supplier to supplier, ranging anywhere from 90 days to six months before your tariff’s end date.
You won’t get a reminder letter informing you that you’re now able to switch so it’s incredibly important that you keep track of when your renewal window is due to open. The exception to this rule is if you own a microbusiness so one that employees fewer than 10 people.
Ofgem ruled back in 2015 that microbusinesses should receive a reminder letter around 60 days before their business energy contract is due to expire.
> You may need to send a termination letter when cancelling your business contract
Certain energy suppliers will require you to send them a letter of termination, one for your electricity contract and one for your gas, if you want to switch to another deal. You should be able to find out whether these are needed from its terms and conditions.
While you technically don’t have to wait until the renewal window to inform them of your intentions, you won’t be able to actually switch until then.
It’s essential that you find a new deal as soon as possible after your old contract has been terminated.
This is because your supplier will start charging you out of contract rates which are significantly more expensive.
Is business energy cheaper than domestic energy?
Businesses tend to use significantly larger amounts of energy than domestic properties so your supplier will offer you a lower unit price.
They are however required to pay a much higher amount of VAT on electricity, 20% compared to the 5% on domestic tariffs, and may be subjected to other charges such as the Climate Change Levy which can drive the price of your contract up.
Where can I find good deals on business energy?
Securing a great business energy contract used to be a much more inconvenient and a time consuming process because you’d have to call up different suppliers in order to get quotes.
Energy Helpline’s expert business energy service is completely free to use and allows you to quickly compare business energy prices from a great variety of suppliers, including major ones like British Gas, EDF Energy and E.ON.
Simply give us a brief bit of information about your business then we’ll search industry records to find key details like your current usage and meter number. An energy expert will then promptly call you back to discuss different quotes and help you find the perfect deal.