Business owners are well aware of the importance of keeping both overheads and costs down as much as possible. For lots of businesses throughout the UK, one of the biggest costs that they occur is with their electricity and gas. It is for this very reason why it is important that businesses ensure they are not paying too much on their energy.
It is often the case that businesses let their energy contracts roll over when they end, meaning that they are paying much more than they need to than if they had switched suppliers. The reason why many businesses put this off is because they believe that the switching process is slow and laborious. However, that is no longer the case with faster switching. Find out what is faster switching? here.
Keeping a close eye on their energy bills and then switching over onto a better deal when the contract comes to an end may be enough to save businesses as much as several hundreds of pounds each year.
Switching a business energy contract
It is usually the case that a business can only switch its energy contract when its current one comes to an end. However, just before this happens, business owners should begin searching around for a deal to switch over to. This is because if the switch is not made in time, a business will be moved over onto an expensive ‘out of date’ rolling contract.
For those business owners who are not quite sure when exactly their energy contract comes to an end, there is no need to worry. This is because the supplier will automatically make contact at the point the contract enters what is known as the ‘renewal window’. This is typically anywhere between 1 to 6 months prior to the contract coming to an end.
At the point when the supplier gets in touch with a business to notify them of entering the ‘renewal window’, it should then be a priority for the business owner to start comparing the contracts of other suppliers in order to see if they can save costs by switching over. By doing this well in advance of an energy contract coming to an end, it means that a business has a new contract in place to switch over onto.
The types of tariffs to choose
There is the option for businesses to choose between either a variable tariff or a fixed term tariff.
- Variable tariffs – with this type of contract, businesses pay a different price for the energy that they use depending on changes (both up and down) in price on the wholesale energy market. This can be much more expensive than a fixed term contract if prices go up, but if they go down, they can be cost effective.
- Fixed term tariffs – a business pays a pre agreed amount for every unit of energy that is used during a specific term of time. This is typically anywhere between 1 and 5 years in length.