This is a guest post by Elliot Waterhouse, web content manager for Selectra and a digital marketing enthusiast that loves modern design and seeing the world.
Companies of all sizes are overpaying on their energy bills every single day.
Many businesses naturally assume that switching tariffs is only available to residential customers. However, that could not be further from the truth.
In fact, depending on the size of your company, you’re likely to get an even larger saving per kWh due to the sheer amount of usage your company has.
That is not to say that small business owners don’t stand to save huge amounts, because they do, just like they can at home. Just by switching your energy tariff you could reduce your expenditure, increase your profits and best of all, none of it requires any extra work.
So, let’s look into the benefits of switching a little further:
Why switch your business energy tariff?
Unlike the poor customer service levels of many other industries, such as tourism, telecommunications and television, with long, drawn out processes for switching and cancelling services, switching your energy provider requires very little effort.
The reason for this is that most of the work is actually done by your potentially new supplier. As such, even if you saved £30 a year (which you can normally times by about 30), there is no stress for it ‘to be worth’.
Although you may hear that switching your energy provider is a waste of time, and the amount saved is extremely little, there are two counter arguments for that:
- That is absolute nonsense: savings can be in their thousands if you’ve never switched before.
- You may not have a very high initial saving, but with rising energy prices, if you’re on a standard tariff, you’ll save by avoiding the price hikes.
Here is an example of how much you could save by using a real life quotation example:
Source: Selectra, price comparison service
Usage: 45,000 kWh
Payment method: Direct debit
Date of search: 30th June 2017
Tariff one: Dual Energy’s ‘3 year – with ADR’
Price per kWh: 12.160p
Standing charge: 14.800p per day
Yearly cost: £5,562.52
Tariff two: EDF Energy’s ‘Business Connect 72 to Jun 18’
Price per kWh: 20.200p
Standing charge: 50.000p per day
Yearly cost: £8,623.43
Comparing the two tariffs, with the same usage, in the same location, for exactly the same product, we can see that there is a quite drastic difference in price.
Just by switching your tariff from ‘tariff two’ to ‘tariff one’, you’d save a massive £3,060.91 per year, for three years.
This would amount to around £255 every single month, all for switching the company that provides your electricity. A similar kind of thing would happen for your gas bills, so imagine the savings you could be making for such little time and effort.
So, how do you make the switch?
It used to be that businesses could not switch their energy supplier until an allotted ‘switching window’. However, since 2014, this has been abolished by Ofgem in a national rollout. And as such, businesses can now inform their current supplier of their cancellation from the day the contract begins up until 30 days before the contract expires.
There will, however, likely be some form of early exit fee if you are in a fixed term contract, but it is often worth paying the fee in order to save over the long term.
When it comes to actually switching or searching for a tariff that appeals to you, your best option is usually to consult a comparison service.
There is a huge number of these upon a quick Google search that will simply give you the cheapest tariffs available to you in an easy to understand fashion.
The difference between business and residential switching, however, is that as a business, that will generally have a considerably larger consumption than the average household, you have much more leverage over the price per kWh.
As such, when you have found a suitable tariff, you should give said supplier a call on their business sales number. If you express that you’d be more likely to sign up for the tariff if the price per kWh were to be lowered slightly, given sufficient reasoning.
I.e. you have a very high consumption figure, they may be able to make you an offer that is even better than that advertised.
This negotiation tactic is used frequently within medium to large businesses and is actually expected by most energy suppliers.