As a business owner, checking your energy supplier is probably quite far down the list of priorities on a day-to-day basis, especially during the current pandemic.
But switching your current supplier can make a huge impact in reducing the amount of money that you spend on gas and electricity.
The UK Energy Market
The Competitive Energy Market
With the energy market being as competitive as ever, businesses are spoilt for choice when it comes to choosing their energy supplier.
Whether you’re currently with one of the ‘Big Six’ or a smaller energy supplier, each offers an array of tariffs, contract lengths and pricing structures so finding the right one for your business can feel like a daunting task.
Whatever line of work you are in, choosing the right deal is crucial when trying to save money.
However, in a recent Yü Energy survey of 500 businesses, we found that energy saving is at the bottom of the list, with the most common saving methods for businesses being:
- Reducing Staff (36%)
- Reviewing expenses (35%)
- Cutting back on marketing (30%)
Simply put, energy saving is not at a priority for most businesses.
Many businesses choose to stick with their existing supplier for ease. Our survey has further shown that the typical business could be overpaying on their electricity bill by a massive 44% and their gas by a staggering 65%, by being on a deemed tariff or out-of-contract rates.
Despite the potential for such savings, 40% of business owners admit to not having changed their energy provider in the last three years.
With so many alternative options out there, it is well worth shopping around to find the best plan.
Making the Switch
Reasons to Switch Energy Supplier
There are several reasons why spending a little bit of time switching could be beneficial to your business:
•You could benefit from cheaper prices with another supplier.
•You may be experiencing poor service from your current supplier.
•You can experience an energy plan more tailored to your business’s needs.
•Your contract is coming up for renewal or it has finished, and you wish to explore your options.
•You’re moving to a new business property and you want to the best deal for your new premises.
Before You Switch
Understanding Energy Prices
Commodity costs can fluctuate depending on a number of factors; supply and demand (e.g. more electricity needed in winter), stress events (such as cracks in oil pipelines and explosions at gas hubs) and import/export issues (e.g. changes in the value of currency).
For example, Britain’s electricity prices have currently soared to an all-time high, with gas also surging to a three-year record.
The high demand for Liquified Natural Gas (LNG) in Asia has also been one of the causes of skyrocketing gas prices.
The UK’s market price for electricity also rose to a new record following a string of power plant outages and low levels of renewable energy generation creating high demand from gas-fired power stations.
Non-commodity costs can increase or decrease prices too, for example if the Government decides to implement a new scheme then it can have a knock-on effect to the final customer bill.
In a nutshell, these fluctuations are not predictable and although there is usually a slight seasonal trend, there is never a ‘right time’ to switch your supplier.
You could end up paying out-of-contract rates which tend to be higher than other tariffs, so don’t wait to switch.
T's & C's
Review Your Current Contract
Make sure you know the terms of your current contract.
You should know when your contract end date is. This will give you the time period when you are able to tell your current supplier that you would like to switch.
Currently, you have between 90- 120 days to let your supplier know that you’re leaving but these can sometimes vary depending on suppliers.
This is how many businesses end up being “rolled over” (for another year) or put on to “out of contract rates” (high rates).
What Do You Do Now?
Here’s the next steps we advise taking so you can make an informed decision:
- Speak to a few suppliers and find the best plan for you. Your current supplier might not offer you the best deal, so by using your current prices as a benchmark you can see how other companies compare.
- Read your meter regularly so you can build up a picture of the amount of gas or electricity you use. Suppliers can then give you more accurate quotes so you can find the best plan for your business.
- Make sure you know your current contract terms. You should know your contract end date which should give you a time-period when you are able to tell your current supplier that you would like to switch. If you know these details, you are less likely to be ‘rolled over’ on your contract or put on to ‘out-of-contract rates’.
We understand that switching suppliers can be stressful and considered time-consuming. That’s why our friendly team aim to make your switching process as smooth as possible.
Simply follow our guide, or if you’d prefer, call our team on 0115 975 8258 and we’ll be happy to help.