Business energy is one of those bills that quietly creeps up while you are busy running the place. The single biggest saving is usually not some clever tariff, it is simply not letting your contract lapse onto default rates. Here is how to get ahead of your renewal and cut what you pay.
Why out-of-contract and deemed rates cost the most
When a fixed contract ends and you do nothing, you roll onto out-of-contract rates. When you move into premises without agreeing a contract, you sit on deemed rates. Both are the most expensive prices a supplier charges, and they are set that way on purpose. There is no fixed term and no negotiated deal, so you carry all the risk of a rising market. Getting off these rates and onto an agreed contract is the first and biggest win. You can start that on our business energy page.
The two parts of your bill
Almost every business energy bill has two charges, and it pays to understand both.
The unit rate
This is the price you pay for each kilowatt hour of gas or electricity you actually use, shown in pence per kWh. Use more, pay more. This is the figure most people focus on.
The standing charge
This is a fixed daily charge you pay just to be connected, whether you use any energy that day or not. Two suppliers can quote a similar unit rate but very different standing charges, so a deal that looks cheap on the unit rate can work out dearer once the standing charge is added. Always compare both together across a full year of usage.
Paying too much for business energy?
We compare suppliers and switch you off expensive out-of-contract rates, timed to your renewal.
Fixed versus variable contracts
You generally choose between two contract shapes.
- A fixed contract locks your unit rate for the length of the term, often one to five years. Your usage still changes the bill, but the price per unit is set, which makes budgeting easier and protects you if market prices rise.
- A variable contract lets the unit rate move with the market. It can fall when prices drop, but it can also climb without warning, which makes forecasting harder.
Most businesses that want certainty choose a fixed term. The right length depends on your view of where prices are heading, which is exactly the sort of thing worth talking through before you sign.
The renewal window and giving notice
Business energy contracts are not like home ones. They often will not let you switch away until you are inside a renewal window near the end of the term, and many require you to give formal notice to end the contract. Miss that window and you can be rolled straight onto expensive out-of-contract rates, or even tied in for another term.
The fix is to know your end date and act early. You can usually agree a new contract weeks or even months ahead of time, with the new rate starting the day the old one ends. Put a reminder in well before the deadline so a renewal never catches you out.
Bill validation: check you are charged correctly
Suppliers make mistakes. Bill validation means checking that what you are charged actually matches your contract and your true consumption. That covers the unit rate and standing charge applied, meter readings used rather than estimates, and any charges that have crept on that should not be there. If you run several sites, the odds of an error somewhere go up. Catching a wrong rate or an estimated reading can put real money back in your account.
What a broker actually does
An energy broker sits between you and the suppliers. In practice that means:
- Reviewing your usage profile, so any quote is based on how your business actually uses energy across the day and the year
- Comparing prices across a panel of suppliers, rather than you ringing each one
- Handling the switch and the paperwork, including notice on the old contract so you do not slip onto default rates
- Timing the renewal so the new rate is in place the moment the old one ends
We are paid a commission by the supplier you choose, and we will be clear about that. The job is to get you a rate that fits your usage without the legwork. Start on our business energy page.
The bottom line
The easiest saving on business energy is avoiding out-of-contract and deemed rates by acting before your term ends. Understand your unit rate and standing charge together, decide whether a fixed or variable contract suits you, and mind the renewal window and notice period. Check your bills for errors while you are at it. For more, read more articles.