Is Business Electricity Cheaper than Domestic?
Posted on Nov 8, 2021
Having been a domestic energy customer for many years, most business owners will be familiar with how their home energy contracts work. But when it comes to contracts from business energy suppliers, they may not realise that there are key differences between domestic energy and business energy – and in this article, we will take a closer look at what these differences are.
What are the main differences between domestic and business energy?
The following points summarise the main differences between domestic energy and business energy:
- Energy unit price – Business energy tends to be cheaper per unit, than domestic energy (depending on your business electricity suppliers of course!)
- However, business energy is subject to 20% VAT while domestic energy is only 5%
- Business energy also has to take into account levies and energy regulations which domestic energy customers don’t have to worry about
- Contract terms tend to be longer for business customers than they are for domestic users
- You will generally need less information and get simple energy quotes as a domestic customer, whereas business energy quotes tend to be more complex and so need more information from you at the start
Is business energy cheaper than domestic energy?
Following on from the information above there may be business owners out there wondering, is business energy cheaper than domestic energy?
Although this seems a simple question, the answer is quite complex, and there are a number of factors that need to be taken into account. The actual electricity and gas supplied are the same for business customers as they are for domestic customers, the contracts will differ wildly for both. This is because domestic and business energy suppliers operate in different ways, and prices will vary depending on a variety of factors.
Average business energy rates vs average domestic energy rates
Electricity and gas prices may seem cheaper for business customers than they are for domestic users as businesses tend to pay a lower price per unit for their energy, due to the large volumes they consume leading them to economies of scale – so the larger the business the lower the unit rate. This means that most business owners are able to negotiate and choose contracts based on their particular needs, which is something that domestic customers are not able to do – they are just charged the same price as everyone else in their region.
But is business energy actually cheaper overall than domestic energy?
No. Not when you take into account the other charges that are then added on, such as:
- Levies such as the Climate Change Levy (CCL)
- Pricing criteria such as business size and contract length
- Price fluctuations with variable price contracts
- Wholesale energy market pricing changing at renewal
Finding the best business energy deal can be a confusing and time-consuming task. But D-ENERGi is here to help. Our team of energy experts will negotiate with business electricity and business gas suppliers on your behalf and secure you the best business energy deal.
We have seen a recent increase of our prospective customers signing letters of authority known from within the industry as LOA’s. Letters of authority enable third parties such as energy brokers and consultants to collect data so a gas or electricity quote can be offered. However we have seen an increasing number of brokers and consultants not only offering gas and electricity quotes, but will go as far as to change your supply to another provider without any further consultation and not informing the end user of any prices. We strongly advise customers to thorughly check the content of any Letter Of Authority which is signed. This document is important because under the Data Protection Act you have a right to confidentiality. Be careful that Letters of authority do not mention “the right to change supply” as this could lead to higher bills with out the end user being aware.
Should you smell gas or suspect there has been a leak of other fumes such as carbon monoxide you should call the free 24 hour national emergency number on 0800 111 999 immediately. It is the responsibility of your gas distributor to make your property safe but the following will outline what precautions you should take after you have called 0800 111 999 and then what steps need to be taken after the engineer has visited.
If you are able to smell gas then please ensure you follow these steps:
Call the national emergency number on 0800 111 999
Do not use your mobile phone to make this call if you are in the property where there is a suspected gas leak. If your only option is to use a mobile phone then make the call either outside or in a neighbouring property
Open all doors and windows
Never use matches, lighters or any other type of naked flame
Do not smoke
Do not switch any electrical appliances on or off, this includes doorbells and lights
Ensure that the gas supply to any appliances has not been left on and that the pilot light on any boilers has not gone out
If you know how to and feel comfortable doing it then turn off the gas supply at the meter
It is not your responsibility to fix any gas leaks at your property, this is the responsibility or your gas distributor and once you have reported the leak through the national emergency number they will visit your property free of charge. Make sure the engineer is a Gas Safe registered engineer and request to see the necessary documentation confirming this.
If the leak is in a domestic property they may be able to make it safe by switching off the gas supply. Provided they are able to the gas engineer will fix the leak there and then, if not they will isolate the faulty appliance and switch the gas back on if it is safe to do so.
Once the engineer has completed all the work they are able to they will leave all the relevant information concerning who to contact should any repairs need to be made. If the fault is with the distribution company and you are left without gas for more than 24 hours you will be entitled to compensation. You will need to contact your supplier should this apply to you.
A carbon monoxide leak is just as dangerous as a natural gas leak, though it is not combustible like natural gas it is poisonous and restricts your bloods ability to transport oxygen around your body. However, it is much more difficult to notice as carbon monoxide is colourless and odourless but there are indicators to look out for:
Flames on gas appliances burn orange or yellow instead of blue
There is undue condensation on your windows
There is visible soot or a scorched look on any gas appliances
The pilot light on any of your boilers frequently goes out
The easiet possible way is to invest in a carbon monoxide detector, the Gas Safe Register states the following on their website:
“Gas Safe Register recommends the use of audible carbon monoxide alarms. It should be marked to EN 50291 and also have the British Standards’ Kitemark or another European approval organisation’s mark on it. CO alarms usually have a battery life of up to 5 years. Fit an alarm in each room with a gas appliance. Always follow the alarm manufacturer’s instructions on siting, testing and replacing the alarm. Do not use the ‘black spot’ detectors that change colour when carbon monoxide is present, they don’t make a sound. It is important to choose an alarm that will wake you up if you’re asleep, or you may not be aware of early CO symptoms until it is too late.”
If you suspect there is a carbon monoxide leak or your carbon monoxide alarm has alerted you to one then you must:
Leave the property immediately
Call national emergency number on 0800 111 999
If any from the property is displaying any of the following symptoms seek urgent medical attention as they may be suffering from carbon monoxide poisoning:
loss of consciousness
Turn off any appliances and do not switch them back on until they have been checked
Ensure that any and all repairs are completed by a Gas Safe registered engineer
Following these steps will help to ensure the safety of anyone at a property affected by either a natural gas leak or carbon monoxide leak. As a matter of precaution make sure the national emergency number is kept somewhere prominent in the property so that it can be found by anyone in the event of any kind of leak and that any residents or employees at the property are aware of the above.