5 Things You Should Consider When Switching Business Energy Suppliers

Energy Management
Switching to another energy supplier is often worth it since you could pay less for one of the biggest line items in your budget. Yet you could be stuck with a hefty, surprise bill if you make a mistake. There are a number of factors you need to consider in addition to your current contract’s terms, which is why it’s important that you take your time and make an informed decision before you make the switch. Here are 5 things you should consider when switching business energy suppliers.

How Scale Impacts Your Position with Suppliers

If you are running a business out of your home, you probably don’t qualify for business utility rates. However, you could still save money by changing energy providers. Know how much electricity and gas your company uses every month so that you can comparison shop between providers based on your actual usage. If you are a heavy energy user, energy providers may offer significant discounts to secure your business. Alternatively, they may provide additional services for free that you’d otherwise have to pay for.

The Need to Shop Around

You can save money on anything just by shopping around, and commercial and industrial energy bills are no exception. Research the options on business utility comparison sites like Utility Bidder. You’ll learn what the going rate is for electricity and gas. That could help you negotiate better rates with your current supplier if you don’t want to switch.

The Impact of Contracts

Contracts impact energy service in a variety of ways. You would often pay a penalty if you break the current energy contract, though it may be worth it if you find a good enough deal elsewhere. Contracts can save you money as well.

A contract may lock in today’s low energy rates for months or years. Utility companies may offer you a more favorable rate in exchange for committing to be a customer for an extended period of time.

Note that energy prices can fluctuate, and you might see prices spike when your contract expires or renews. Look for energy companies that readily extend a current contract based on today’s rates. Also research the reputation of the supplier before you sign the contract because you don’t want to be hit with surprise fees and extra charges.

The Pros and Cons of Fixed and Variable Rates

There are two main choices for energy plans: flexible and fixed. Fixed-rate plans charge a set price per kilowatt-hour or cubic feet of natural gas. These plans are popular because it is simple. Your energy rates are going to be that set price multiplied by the amount of energy used, though you might be hit with penalties for going over a set threshold. You’re protected from price hikes in the energy sector for the duration of the contract. One downside of fixed-rate plans is that you could lock in a higher rate than the market rate. You also run the risk of facing a steep price increase when the contract ends.

Flexible plans let you buy energy in small or large blocks before you use it. This gives large businesses the ability to essentially get bulk discounts on energy. You can shop around for the cheapest energy rates. However, this strategy also leaves you exposed to spikes in energy prices.

The Importance of Energy Management

Ensure that you don’t exceed your kVA or Kilo Volt Amperes because this could destroy your power meter and leave you without power. And you’re on the hook to pay for the repairs. Understand your maximum demand before you select a flexible plan so that you can plan appropriately, because applying for extra electricity is a time-consuming process, and your request may be denied.

The alternative is trying to reduce your energy consumption. This will reduce your overall energy bills. Depending on your energy plan, you may be reimbursed by the energy company for reducing energy usage, especially during times of peak load. You can get extra points with consumers or tax breaks for implementing energy-saving projects.

A good first step is installing a smart meter, though monitoring and targeting software can give you a far greater insight into energy usage by your business. Know that all businesses will be required to have a smart meter installed by 2020, though that may be provided by the energy company at no cost to you. You could also be hit with a fine for failing to comply with certain energy management procedures like DEC and EPC. Nearly every energy company has consultants who can help you become compliant and train your staff.

It takes time and effort to organize a smooth transition from one energy supplier to another. However, if you choose the right energy company, it is always worth it.