Business energy can be a significant operating cost, particularly for restaurants, takeaways, shops, salons, workshops and other premises-based businesses. Commercial contracts work differently from domestic energy, so it is worth understanding your current agreement, consumption and renewal position before considering another deal.
How business energy contracts work
Commercial gas and electricity are normally supplied under a business contract for an agreed period or pricing arrangement. The rates available can depend on consumption, meter type, location, credit assessment, contract length and wholesale market conditions. Unlike many domestic arrangements, a business may not have the same ability to leave a fixed contract early, so the terms deserve careful attention before signing.
Start with your current energy bill
Before requesting prices, find a recent bill and identify your supplier, account details, meter information, annual consumption, unit rates, standing charges and contract end date. Electricity bills may also show an MPAN and gas bills an MPRN. Accurate information helps a supplier or broker obtain a quotation based on the correct premises and usage.
When can a business switch energy supplier?
Your ability to switch depends on the existing contract and its renewal or termination terms. Check the contract end date and any notice requirements rather than waiting until the last moment. If you have recently moved into premises, tell the existing supplier promptly and establish what arrangement currently applies before agreeing a longer-term contract.
Fixed and variable business energy
A fixed-price contract can provide greater certainty over specified energy rates for an agreed term, although the total bill can still change with consumption and other applicable charges. Variable or out-of-contract pricing can change over time. Compare the complete quotation, including unit rates, standing charges, contract length and relevant terms, rather than focusing on a single headline figure.
What affects a business energy quote?
Energy usage is important, but it is not the only factor. Suppliers can consider the meter, premises, consumption profile, credit position, requested contract length and market conditions when pricing a contract. Two businesses using similar amounts of energy may therefore receive different quotations.
Business gas and electricity together or separately
Businesses using both fuels can review gas and electricity at the same time, but they do not necessarily have to use the same supplier or contract term for both. Compare each supply on its own merits and keep clear records of renewal dates so one contract is not overlooked.
Using a business energy broker
A broker or intermediary can gather information, approach suppliers and help explain available contracts. Before proceeding, understand which suppliers they work with, what service they provide, how they are paid and whether their remuneration is included within the price you pay. Merchant Guru will clearly disclose any commercial relationship when it introduces an energy referral or comparison service.
Questions to ask before agreeing a contract
Confirm the contract term, unit rates, standing charges, start date, renewal or termination process and any other material charges or conditions. Check that the business name, supply address and meter details are correct. If a broker is involved, ask how the broker is remunerated and keep copies of the quotation and agreed contract.
Moving into new business premises
When taking over premises, record meter readings as close to the move-in date as possible and contact the existing supplier. Provide the correct business details and establish the current tariff or deemed arrangement. This gives you a clearer starting point before considering a new contract.
Reducing energy use as well as reviewing price
A cheaper tariff is only one way to manage energy expenditure. Businesses can also review heating and cooling schedules, lighting, refrigeration, kitchen equipment, standby usage and operating procedures. Regular meter readings can help identify unusual consumption and make future quotations more accurate.
Merchant Guru provides practical information to help UK businesses understand their options. Where we have a commercial relationship with a provider, we'll make this clear.