All You Need to Know About Switching Business Energy Suppliers
All You Need to Know About Switching Business Energy Suppliers
With dozens of business energy suppliers to choose from for firms electricity and gas needs, you would be forgiven for being confused about how to switch business energy supplier.
However, with this helpful guide, D-Energi can help guide you through what can be a computing and overwhelming process to find a supplier that will meet your business energy needs not only more cheaply but efficiently as well.
When should I switch energy suppliers?
Because we are all busy running our firms, it’s not always on the top of our to-do list to check what business energy suppliers are currently offering so it seems easier to simply remain with our current supplier.
However, there’s a problem in doing so since the supplier may simply roll you over onto another contract, it is known as a ‘deemed’ contract, which is probably at much higher rates than you would enjoy if you were a new customer.
One reason for this is that firms had to act within a window of opportunity but this window varied between suppliers which created, even more, confusion and upset should a firm not use the opportunity and then be moved onto a more expensive contract by their current supplier.
The new rules mean that all you need to do when it comes to arranging a new business energy deal is to have more than 30 days remaining on your contract.
Also, energy suppliers must inform you, it’s usually around 60 days before your fixed term contract comes to an end, how much energy you have used in that year and then tell you what the details of the new deal will be.
The aim of this, says Ofgem, is to give you the information necessary when negotiating a new deal between suppliers and a new firm will know what your energy needs are and tailor their offering to meet it.
It’s also important to appreciate that under the new arrangements if you’re on a fixed term contract then you can tell your supplier that you are looking to switch at any point before the notice period even begins.
We should also highlight that these changes to the process were mainly aimed at micro-businesses, which tends to be those firms with 10 or fewer employees but who account for a large part of the business energy supply market. Larger businesses will be able to negotiate better terms with a supplier because they’re using more energy and very large businesses may even be able to negotiate wholesale prices
The best way to switch energy suppliers and save
If you are a business owner and looking to switch business energy supplier to save money, then it is recommended that you should contact an energy broker between four and six months before your current contract comes to an end.
By doing so, you will enable the broker to compare various prices and deals and deliver an accurate quote for a contract that you can then switch to when your current deal runs out in a seamless transition.
If you are an energy supplier but without a contract, then you need to speak with a broker urgently to arrange a deal so you can enjoy cheaper energy rates and lower your energy overheads.
The best way of achieving the best deals and offers is to speak with the team at D-Energi who have the experience and expertise to deliver a bespoke offering that will impress.
While switching to a new business energy supplier is more complex than it is for switching suppliers for our home supply, there are various factors that also play a part.
As mentioned previously, the size of your business and how much energy you use will need to be considered as will the type and length of contract you are looking for.
Indeed, should you sign up for a long-term contract, then your switching window may be several years ahead but it’s always a good idea to monitor business energy prices and deals and look to switch if big savings can be made. Depending on the contract, it’s not always easy to switch mid-term and careful thought and a discussion with the D-Energi team will help in this regard.
It also helps that most of the information you will need for switching will be found on your current contract. The date the contract began and will end will be detailed but if you cannot find it then your energy supplier will be able to tell this.
We mentioned in the previous section that for a micro-business, the switching process is relatively straightforward. Essentially, your current energy supplier must send you a renewal letter to tell you of the date of renewal and your right to switch to a new supplier.
The letter will also detail how much you will pay under the new contract terms should you decide not to switch.
However, for larger energy customers looking to switch suppliers then they need to know when their contract comes to mind and act in the switching window. That’s because it’s unlikely that their supplier will send them a renewal letter and the window is the only time they can change suppliers. Unfortunately, by failing to act, you are likely to be moved onto a 12-month contract at higher rates.
Criteria to be considered as a micro-business
We should also, perhaps, define more closely what energy suppliers will mean by a micro-business and under Ofgem rules, they must meet one of a set criteria to be considered as a micro-business. These are:
– Having fewer than 10 full-time, or equivalent, employees
– An annual turnover of less than £2 million
– Will use no more than 100,000 kWh of electricity per annum
– Will use no more than 293,000 kWh of gas per annum.
As a rule of thumb, if your business is spending less than £1,000 every month on energy bills, then it’s highly likely that it qualifies as a micro-business.
The big attraction to be being considered as a micro-business is the flexibility it brings when switching business energy suppliers such having more time to act. It helps also that the renewal letter should be a prompt from your current energy supplier to search the market so you can lower your overheads and boost profitability.
More on deemed contract
A survey by the Competition and Markets Authority revealed that around 40% of UK businesses have never switched energy suppliers; that’s a lot of organisations who haven’t bothered to find out whether they should be paying less for their energy. It’s highly likely they are paying more than they need to.
Also, if you have moved into new business premises then you have probably been placed on a deemed contract but you will be able to switch at any point without termination fees or a notice period restriction.
It should also be appreciated that these rules also apply if your current contract has expired and you’ve been moved onto a deemed contract where you will be paying out of contract tariffs.
Ofgem also states in its rules that your current energy supplier must inform you, or at least take reasonable steps, about other available energy contracts from rival suppliers and how you can find out more about these.
The D-Energi team has more help and advice available for switching business energy suppliers.
Comparing business energy prices
So, you have decided that you and your business will be switching energy suppliers and you have found out when you are eligible to do so. The next step in the process is to find the better rates which means having to compare prices between rival business energy suppliers.
However, it is worthwhile highlighting the two very important issues to consider when comparing rival offers. On the surface, a rival’s offer may be substantially cheaper but on close inspection this may not be so since they may be charging a lower unit rate but have a higher standing charge. A clearer explanation is given below:
A standing charge is a daily amount that is paid regardless of whether your business is open and how much energy you use. The standing charge can vary hugely, for instance a micro-business may be paying 25p a day while a large commercial firm may be charged £10 a day. It also needs be understood that a standing charge will be made for electricity and gas separately.
The unit price is what you will be paying per kilowatt hour of gas or electricity and it’s usually priced in pence and not pounds. These rates can also vary hugely between suppliers and understanding these unit charges could lead to big savings.
How to access great business energy quotes
So far, it appears that you will need to do lots of homework as a small business owner, though larger firms will also need to do lots of legwork as well before you switch to a new gas or electricity contract.
There are two ways of finding business energy quotes, one of them might be time-consuming and the other is straightforward.
The first one is to do the comparison work for yourself and you can do this online by visiting energy supplier websites or online comparison websites.
Alternatively, you could contact experts in the field who are energy brokers and will have the latest deals and offers available, for example, the helpful team at D-Energi.
There are, however, some issues to bear in mind if you carry out this work yourself, which include:
– It’s a straightforward process visiting websites to find the latest prices
– The process is also quick between finding a price you like and accepting a supplier’s offer
– The supplier will generally offer the best rates.
The downside for doing the work yourself include:
– The deal you accept might not be the most suitable for your business needs
– It might take more time than you are prepared to spend in finding quotes from several energy suppliers
– The online comparison sites may not be showing you the entire market offering
Using a business energy broker
So, you could be looking at using a business energy broker who will do all of this work on your behalf to find deals that will suit you best. In addition, the firm may offer other services, for example an energy consultancy, which will help you reduce your energy use so you save even more money.
The advantages of using a broker include:
– Find deals you may not otherwise discover
– Can offer advice about energy usage and future need
– Do not charge for their service
– They can deal with the switchover process.
However, you will probably need to give them a call so they can take some details and learn more about your business and energy needs.
The information you will need
In order to switch business energy supplier, you will need to have some information to hand so you get the accurate quotes you are looking for. The information a new supplier and energy broker will need include:
– Your current supplier’s renewal letter which will have your energy use
– The exact location for the business energy supply.
Negotiating for better business energy deals
With all this information to hand, it becomes easier to compare prices, even though the business energy supplier will need to tailor their offering to your business needs. This is not like the supply we have for our homes and because it is a bespoke offering makes comparing lenders on a like-for-like basis a tad more difficult. But it can be done.
However, a quick search online may reveal better deals and offers that you can then use to negotiate with your current business energy supplier. They may lower their offer to meet a rival’s offer.
This is a basic tactic in negotiation and it is also possible that you could enjoy even lower rates by paying your bills by direct debit. That’s because energy suppliers are looking to get paid regularly and may even offer a discount of up to 10% to encourage this form of payment.
Another issue is the firm will not be able to access a dual fuel discount from the same supplier but you might be able to negotiate a lower deal with the same supplier for gas and electricity supply.
Terminating your contract
Once you have found a business energy deal that you like and want to sign up with a new supplier, it’s time to terminate your current business energy contract.
However, you need to be aware that business contracts are not like contracts for our home and there’s no cooling off period. For example, if you sign up with a new supplier for 12 months then you won’t be able to change your mind a few weeks into the contract because you found a better offering. You’ll need to negotiate an exit in this instance.
If you are leaving your current supplier during your notice period then you should not, usually, have to pay cancellation or exit fees but may have to do so if you are cancelling your contract early.
Also, the time it takes to switch business energy suppliers can be up to eight weeks, for those who have a complicated need. Normally it takes around four and six weeks and there’s a risk you may be placed on a deemed contract at higher rates, though this will be for a short period.
Your termination letter will also need to be sent to the current supplier and it is a good idea to use recorded delivery and also email.
The termination letter should be clear and preferably on your company’s letterhead so your firm’s name and address, which should be the same as found in the contract, are clearly stated.
You should also include your meter numbers and, if it’s different, the location where energy is being supplied and when your contract runs out.
You should also state clearly you are looking to terminate your energy supply contract and sign the letter as the business owner.
However, while the process to switch business energy suppliers has been simplified in recent years and the transition process is seamless, your supplier can refuse your termination letter.
They can only do so for a few reasons which include having a debt that needs to be resolved and if your fixed term contract has not yet run out.
If your contract has come to an end, or you are in the notice period, or you are on a deemed contract, then your current supplier cannot object to you switching energy suppliers.
Finally, it’s always a good idea to take meter readings, even if you are on a smart meter which means the supplier will take the meter readings automatically. Mistakes can still occur and it’s best to be prepared.
Again, the helpful D-Energi team can answer questions and probably find a cheaper supplier.
Switching your business electricity supplier
If you are looking to switch your business electricity supplier, then this part of the energy guide will give more detail that should answer all of your questions.
The first issue to appreciate is that comparing business electricity deals and tariffs between suppliers are not as straightforward as if we were looking for a new electricity supplier for our homes.
That’s because there is a range of factors that will have an impact on the business electricity deal and these will include the size and type of your business as well as its location.
A business electricity supplier will then tailor their offering to deliver a bespoke tariff that will meet your needs. However, it’s always important that you get several quotes to ensure that you are getting the best deal available.
As detailed in the first section, the homework you need to do beforehand will be crucial so you will need to research between suppliers what they will offer and whether this will meet your needs.
We should also highlight again that for those firms using online comparison websites that these may not be showing the full market so the deals may be restricted as a result. The sites do, however, give a good indication of what the prevailing market rates are and you can use these to negotiate a better deal with your current energy supplier, if necessary.
When it comes to comparing business electricity prices, you will find there is not only a wide range of energy suppliers available, including many you will never have heard of, but they will be reputable and reliable, but there will also be a big range of prices.
It’s for this reason that you should know what your energy usage is and your current energy supplier’s renewal letter will give this detail. Also, if you are on a smart meter then this information will also be readily available.
By using this energy usage amount, you will be able to calculate effectively a kilowatt hour offering from a new supplier and then work out what the standing charge will be. Essentially, what might appear to be a great deal may not be so great once you work out what the actual cost will be. For example, they may be offering the cheapest price per unit but have an expensive standing charge instead.
There are other tips to save money on your business electricity bill and this may become apparent should you use the services of an energy consultant, which some energy brokers may offer. For example, they may look at how you are working and recommending you switch to off-peak periods where rates are much cheaper. They may also recommend replacing equipment that uses less electricity and even introducing a policy of switching off lights which will save money as well.
To compound the issue of business electricity supply, we mentioned previously that your location also plays a part. That’s because there are regional variations in the prices being charged which may not be apparent when visiting a comparison or supplier’s website.
Also, if yours is a micro-business then it’s highly likely that the price per unit you pay will be much higher than a large business customer will be charged. Usually, larger firms will be charged close to the wholesale electricity price because they are such big users of energy.
Other issues to consider
While this guide from D-Energi is aimed at finding a new business electricity supplier, we also need to appreciate that there are other issues that could bring lower prices.
The first one to consider is whether a fixed term contract is the most suitable but you will be able to fix your prices for one, two and even up to five years with some suppliers. Bearing mind that it’s difficult to switch suppliers in a long-term contract.
Also, your firm may have been switched to a smart meter, or a half hourly meter, particularly if you are a big user of electricity. It’s always worthwhile mentioning that you are on a HH, or half-hourly, meter and some suppliers may know them as P272 meters so you may be able to enjoy even lower rates.
Some firms may also be looking to use renewable energy when they switch electricity suppliers and while these deals and offers are better for our environment, they can cost more than from the usual sources.
Finally, this is a checklist that you should consider when looking for a new electricity supplier for your business:
– When is your contract due for renewal?
– What are your meter numbers?
– How much electricity as you using?
– When are your peak periods of electricity use?
With this information and the help of the D-Energi team, you are in a better position to enjoy lower electricity prices and taking a big step to lowering your overheads too.
Switching your business gas supplier
In this is D-Energi guide to switching business energy suppliers, we have looked in detail at what steps you need to take on the information you need. We have also looked more closely at switching business electricity suppliers and this part of our guide for everything you need to know looks more closely at business gas supply.
The first thing to appreciate, as with business electricity, is that the supply of gas to a business is a bit more complicated than arranging gas supply for our homes. Again, the location of your business and how much gas you use will have an impact on the rates being charged.
As with electricity supply, you will need to consider the standing charge and price per kilowatt hour, both are charged in pence. Some suppliers may have a cheap gas price per kilowatt hour but have a hefty standing charge; this means you’ll need to calculate carefully before switching suppliers that you are actually getting a better gas deal.
It will also become apparent that some suppliers, and there will be small suppliers you have never heard of but who are reputable, will offer maintenance and care plans of your gas system but most firms will not be needing this.
Indeed, if yours is a micro-business then your gas contract will be straightforward whereas larger firms and organisations may need to negotiate a deal that is close to the wholesale price of gas.
However, you will need to know how much gas you are using every year so you can calculate how much a new supplier will be charging you. This is a checklist you need to bear in mind:
– Have details of your meter number
– Calculate your annual gas usage
– Know when your gas contract ends
– Know when your peak periods of gas use are.
Having this information will be handy, for example the meter point reference number will pinpoint exactly where your business is to a potential new supplier. The information also means they’ll be able to give you a more accurate quote so can deliver a better price.
Also, while it’s not possible to access a dual fuel deal like we can for our homes, it is possible to use the same supplier for gas and electricity so it’s a good idea to have details of your electricity usage to hand as well.
It’s also apparent that most of the tips and advice we gave in section 2 about business electricity are also suitable for you and your business is looking for a new gas supplier.
It is possible to use online comparison website to work out what current business offerings are but you need to be aware that the website may not be offering a whole market view and there may be better deals out there. You could, of course, visit individual gas supplier websites to get more details of their deals.
Alternatively, you can also contact the helpful team at D-Energi who have the expertise in helping customers switch business gas supply to find a better deal that is cheaper and the team can also help with the switchover process.
Why you should use D-Energi for switching business energy suppliers
If you are looking to switch business energy supplier and want to use a firm you can trust to get you the best deal and ensure the transition to the new supplier is seamless, then speak with the friendly team at D-Energi.
There are a number of reasons for this; firstly we have years of experience in helping businesses both large and small to find better and cheaper suppliers and we have access to all of the latest deals and offers.
In addition, while you could undertake the research and switchover process for yourself, this can be a time-consuming and very confusing exercise to undertake. And, let’s be honest, you are probably too busy dealing with your business every day to take the time out that’s necessary for finding a better business energy deal. The D-Energi team can do all of this for you and more.
The first step is to contact us and we’ll take a few details and set to work finding a better tariff; this process will take just a few minutes. The adviser can also deal with the switchover process should you like the offer we find.
It’s for this reason that D-Energi is proud to say we are a ‘one-stop energy solution provider’. Our portfolio of customers ranges from small businesses to large care home groups and hospitality, education and manufacturing companies.
Contact our helpful team today to find out more about how D-Energi can lower your business gas and electricity bills.