Business energy refers to the energy for business premises. Businesses also receive a supply of energy in the same way households also receive a supply of electricity or gas.
No doubt, business energy is crucial for the smooth operations of any business. But business energy suppliers offer different business energy tariffs, meters, prices, and many more. Therefore, you need to understand all the components of business energy. This article is a detailed guide to business energy.
Business energy suppliers
There are the Big Sic business energy suppliers in the UK, which include British Gas, Scottish Power, nPower, and many more. These energy suppliers were launched after the privatizations that happened in the 1990s.
These energy suppliers contribute to at least 81 percent of the energy market, and they all supply business energy.
There are also independent business energy suppliers on the energy market. It can be easy to think that the Big Six always provide the most competitive business energy rates because of their size, but this is always true.
Over the last couple of years, there have been a growing number of reputable independent business energy suppliers that are also offering competitive business energy rates and great customer services.
Business energy charges
If you compare the average unit rates for business and domestic energy, you can find that business energy rates tend to be cheaper. In most cases, larger businesses are usually offered cheaper unit rates.
But a business is subject to various charges compared to domestic energy users. For instance, a domestic customer pays only 5 percent VAT besides their energy bills.
On the other hand, a business pays 20 percent VAT, though some businesses can qualify for lower VAR rates. The Climate Change Levy also applies to businesses. This charge can increase the cost of your business electricity.
When you decide to compare business energy rates, you can find that there are two common types of charges.
There is a standing charge which is the amount of money you need to pay for the business energy provider to supply your electricity or gas to your business premises. It’s often given as a daily rate.
It’s worth noting that a kWh is a small amount of energy needed to sustain 1 KW of power for an hour. Ideally, this is the amount of energy you need to power a laptop for at least two and a half hours.
And, the per kWh rate can show you the amount of money you must pay for each unit your business uses. This is the reason why you must understand the amount of energy your company utilizes in a month or year. In most cases, it can be easier to compare business energy prices when you know this.
The amount of money you pay often depends on the size of your business and the amount of energy your business uses.
Larger businesses can secure cheaper business energy rates because they have more bargaining power than smaller businesses. As a result, smaller businesses usually end up getting unfair business energy tariffs.