The energy powering your business during the day is the same power that is powering you home, yet energy suppliers treat commercial and residential contracts differently. Here are the differences; Contract Term: Usually, domestic Gas and Electricity contracts are on a rolling monthly term and would usually have no definitive tariff end date. As the […]

The energy powering your business during the day is the same power that is powering you home, yet energy suppliers treat commercial and residential contracts differently.

Here are the differences;

Contract Term:
Usually, domestic Gas and Electricity contracts are on a rolling monthly term and would usually have no definitive tariff end date. As the domestic agreement is not fixed in term this would generally mean that residential customers can switch their supplier at any point. This can be a negative due to the facts that the unit rate can fluctuate month on month. There are rare instances when fixed term contracts are offered in domestic settings, but these contracts are generally easy to get out of for a nominal cancellation fee.

Business contracts are almost always on a fixed term, usually fixed on a 1 – 5 year contract. The unit rate will stay constant at the agreed price, even if the market price increases or decreases, you can be sure the unit offered and agreed by the supplier would not change within the time period.

Business customers don’t have the option to cancel their contract early, unless the business vacates the premises, sells or closes down which then voids their current contract. Some business could be on a rolling month to month contract but these are usually much higher rates and are rare.

Here at Press Group we can compare offers from over 20 business energy suppliers and therefore will produce a report and present to your business and you can select which supplier and fixed term best suits your company.

Price:
Residential contract rates are often higher than business contract rates and tend not to reflect market movements as much as commercial energy. Prices in the commercial market can fluctuate drastically, therefore, it is important for an organisation to ensure they are locked into a fixed price business contract to avoid these fluctuations. Using an energy consultant to negotiate a contract can be a great help as it will save you time and money. Energy consultants, such as Press Group, not only know how to negotiate the best deal with numerous suppliers, they also know when the best time would be to negotiate a deal based on market trends.

Business and domestic energy bills differ further with regards to other charges and levies such as VAT and Climate Change Levy (CCL). Although business energy comes at a cheaper price, business customers pay 20% VAT compared to the 5% that domestic customers pay. CCL is a green tax, applicable to businesses only, as commercial usage is much higher than residential. Organisations may be eligible for reduced VAT and CCL based on reduced usage and low CO2 emissions.

Meter Type:
Electricity meters have a unique meter profile corresponding to the first two digits of their meter reference number, this will effect how the meter is read by the supplier. Business meter profiles will always be 03, 04 or 00, while domestic profiles will be 01 or 02. The meter type will determine what contract types are available to you. This may sound confusing and overwhelming but speaking to an energy consultant makes it easy to ensure you have the correct meter type and contract for your business needs.

Why Should You Have a Business Contract?
Making sure you have a fixed rate gives your business price security.

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