If you’ve just recently switched to a business energy contract, you might be alarmed by how different it is when you compare it to your traditional domestic deal. If you haven’t yet, price consulting services like Utility Bidder provide a helpful and definitive comparison of companies and their quotes depending on how much energy you use.
Domestic contracts primarily use a ‘one size fits all’ contract regarding setting their rates and prices to their clients. If you’re wondering why your monthly bill is lower or higher compared to your usual rate, here are a few factors for you to consider in settling down with your new service provider.
Understand your energy needs
Depending on what your company’s needs are, you might have higher or lower energy needs. In figuring out how much energy your company uses, you need to finalise your work hours. Some businesses like small shops and boutiques don’t operate for 24 hours a day and only open for five times a week. Since they use very little energy and work for select hours throughout the day, their energy costs are relatively low compared to restaurants and bakeries that require a high output of energy to maintain their services. Know just how much or how little energy you use so that you can find the right contract for your business.
Dealing with your contract
If you’ve recently acquired a business contract, then you’ve probably chosen one of two contract types: a fixed rate contract or variable rate contract. Both contracts have their perks and unique points, but it all boils down to whether you went with the right deal for the right type of business.
In a fixed rate contract, you stick to a fixed payment for the energy that you have negotiated. Though this allows the wholesale price of your energy costs to be unaffected by market trends, it does leave you with the necessity to spend as much as you bought from your energy supplier.
However, in a variable rate contract, you are given the leeway and freedom that you used to have in a domestic energy contract. You will be tasked to pay only for what you use and your kilowatt per hour expenses could even shift on the dot as the prices of wholesale energy are affected by the retail price that you’ve bought with the business tariff.
Knowing your business well and finding the best type of energy contract for it sounds like a lot of work, but it could save you a lot of money in the long term.
Making the switch
If you’ve done the math and realised that you’re not in the best contract with your service provider, you can look forward to changing your contract after the duration, when your current contract expires. If the services aren’t to your liking, you can opt to look for another service provider so that you can negotiate a new business tariff with the new knowledge of your company’s expenses and energy needs.