Choosing the Right Energy Plan for Your Business Made Easy

Managing energy costs is one of the key challenges for any business, large or small. With energy prices fluctuating, and a variety of suppliers and tariffs available, choosing the right energy plan can feel like a daunting task. However, by understanding your business’s energy needs and knowing how to navigate the market, you can make the process simpler and find a plan that suits your budget and consumption patterns.

In this guide, we’ll break down the steps to help you make an informed decision, whether you’re looking for an electricity plan, a business gas contract, or a dual fuel option.

1. Understand Your Business’s Energy Needs

Before choosing an energy plan, it’s crucial to understand your business’s specific energy requirements. This involves evaluating your current energy consumption, peak usage periods, and the type of energy your business depends on most (electricity, gas, or both).

Start by reviewing your recent energy bills. Take note of the following:

• Total energy consumption: This gives you an idea of how much energy your business uses on a regular basis.
• Peak hours: Identify times of the day or year when your energy consumption is at its highest. Some businesses, for instance, might have higher energy usage in winter due to heating needs or in summer because of cooling systems.
• Contract type and end date: Ensure you know the terms of your current energy contract, especially the expiry date, so you’re not automatically rolled onto a higher tariff at the end of the contract.

Once you have a clear picture of your energy usage, you can begin looking for a plan that matches your needs.

2. Compare Different Energy Tariffs

Energy tariffs for businesses differ based on the supplier, contract length, and the business’s energy consumption. There are several types of energy plans that might suit your business, and understanding these will help you make the right choice.

Here are some common business energy tariffs to consider:

• Fixed-rate tariffs: These tariffs lock in a set price per unit of energy for the duration of the contract, which is typically between one to five years. A fixed-rate tariff offers predictability, making it easier to budget and protect your business from market price increases.
• Variable-rate tariffs: With a variable tariff, the cost per unit of energy fluctuates based on market conditions. While this offers the potential for savings when energy prices drop, it also means you’ll pay more if prices rise. This plan is generally riskier but could benefit businesses with flexible budgets.
• Green energy tariffs: If sustainability is a priority for your business, a green energy tariff is worth considering. These tariffs source energy from renewable sources, such as wind or solar power. Choosing a green energy tariff may also enhance your company’s environmental credentials, which could appeal to customers and partners who value sustainability.
• Dual fuel tariffs: If your business uses both electricity and business gas, you can opt for a dual fuel tariff. This allows you to consolidate your energy usage under one contract, which can simplify your billing and make it easier to manage your overall energy expenses.

Comparing these different tariffs, either through online comparison tools or with the help of a broker, is essential. Look at factors such as price, contract length, exit fees, and the supplier’s customer service record to ensure you’re getting the best deal.

3. Consider the Length of the Contract

When choosing an energy plan, the contract length can have a significant impact on both the price you pay and your business’s flexibility.

• Short-term contracts: These typically last for 12 months and provide flexibility, allowing you to renegotiate or switch suppliers if better deals become available. However, short-term contracts may come with higher rates compared to longer contracts.
• Long-term contracts: Contracts that last between two and five years often offer more competitive rates, giving you stability over a longer period. This can be ideal for businesses that want to lock in lower prices and protect against market volatility. The downside is that you’ll be committed to the same supplier for the duration, which could result in higher prices if market rates fall.

Choosing the right contract length depends on your business’s energy strategy. If market conditions suggest rising energy prices, a long-term contract may provide cost savings. On the other hand, if prices are predicted to drop, a short-term contract or a variable tariff might be more suitable.

4. Review Additional Charges and Hidden Costs

While the unit price of energy is the main factor in deciding a plan, there are other charges that could affect your overall costs. Pay close attention to the following when comparing plans:

• Standing charges: This is a fixed daily fee that covers the cost of supplying energy to your business, regardless of how much you use. Even if your business is closed or using minimal energy, you’ll still need to pay this charge.
• Metering charges: Depending on the type of meter you have, there may be additional charges for maintenance or installation. Smart meters, for example, may come with lower metering fees but could involve initial installation costs.
• Exit fees: If you need to switch suppliers before the end of your contract, you may be charged an exit fee. This can be expensive, so it’s important to check these fees before committing to a long-term contract.

By factoring in these additional costs, you can avoid unpleasant surprises and ensure you’re choosing the most cost-effective plan.

5. Consider Energy Efficiency as a Long-Term Solution

While securing a good energy plan is essential for managing costs, improving your business’s energy efficiency can also lead to significant savings. Implementing energy-saving measures can reduce your consumption, making you less reliant on market prices and helping to lower your bills over the long term.

Here are some quick wins for improving energy efficiency:

• Upgrade to energy-efficient appliances: Old, inefficient equipment can use more energy than necessary. Replacing these with energy-efficient models will help cut costs.
• Smart thermostats: Install programmable thermostats that allow you to control heating and cooling more precisely, reducing energy waste.
• Employee awareness: Encourage staff to adopt energy-saving habits, such as switching off lights and equipment when not in use.

By combining an efficient energy plan with practical measures to reduce consumption, your business can significantly reduce its overall energy expenses.

Choosing the right energy plan for your business doesn’t have to be complicated. By understanding your energy needs, comparing tariffs, and considering contract terms and additional costs, you can find a plan that fits both your budget and your operational requirements.

Remember, finding the right deal on business gas or electricity is only part of the equation—improving your energy efficiency is equally important in securing long-term savings. With the right approach, you can ensure that your business runs cost-effectively while contributing to a more sustainable future.