Cut Your Costs: A Beginner's Guide to Business Electricity Rates

Choosing the right business electricity rates can save your company big bucks. This guide breaks things down so it’s easy. If you run a shop, office, or factory, this is for you.

What Are Business Electricity Rates?

Business electricity rates are the prices companies pay for power. These are different from what you pay at home. Businesses usually use more electricity, so their costs are higher.

Let’s say you own a small bakery. Your ovens and fridges run all day. That’s a lot more power than you’d use at home, right? So, you need a power plan made for businesses.

There are many types of business electricity plans. Some have fixed rates; others change over time. Knowing the difference helps you pick the right one.

Why You Could Be Paying Too Much

Many businesses overpay for electricity without even knowing it. A recent study in the UK showed that nearly 40% of small businesses are on “default” energy rates. These are often the most expensive! It's like paying full price when there’s a sale going on.

Also, electricity prices are rising. In 2022, global energy prices rose by more than 50%, mainly due to oil and gas supply issues. If you're not checking your plan, you could be losing money every month.

Types of Business Electricity Rates

Let’s break down the different types of rates so you can choose smartly.

Fixed Rate Tariffs

With fixed rates, the price stays the same each month. This helps you plan your budget. Even if energy prices go up in the market, your cost stays the same.

Good for:

• Small businesses with tight budgets
• Companies that use about the same energy each month

Example: A small design studio used a fixed-rate plan and saved £600 over a year compared to a variable rate.

Variable Rate Tariffs

These go up and down with market prices. If the cost of energy drops, your bill gets lower. But it can also go up.

Good for:

• Businesses that can handle monthly changes
• Those willing to take a risk for savings

Example: A local car wash used a variable plan. During slow months, they enjoyed lower prices. But in the winter, their bill shot up by 25%.

Green Energy Tariffs

Green tariffs use electricity from renewable sources like wind or solar. These are eco-friendly and can impress your customers.

More people today support businesses that go green. In fact, 73% of Gen Z prefers to buy from eco-friendly brands. Making a switch to green energy could even boost your sales!

Some green energy plans cost a bit more, but others are competitive or cheaper.

Factors That Affect Your Business Electricity Rates

Your rate doesn’t just depend on your supplier. Many things can affect what you pay:

1. Location

In big cities like London, rates may be higher. Rural areas sometimes get lower prices because of delivery costs.

2. Size of Your Business

More employees mean more lights, computers, and machines. That means higher use and higher rates.

3. Time of Day

Have you heard of “peak hours”? That’s when electricity costs more. Between 4 PM and 7 PM, prices can be up to 20% higher.

Some plans charge more during peak hours. So, try to run high-use machines in the morning or evening.

How to Compare Business Electricity Rates

Let’s find the best plan for you. Here’s what you need to do:

Step 1: Check Your Current Bill

Find out:

• How much energy you use each month
• How much you pay per kilowatt-hour (kWh)
• If you're on a variable or fixed rate

Step 2: Use a Comparison Site

Use business energy comparison websites. They show plans from many suppliers. Just enter your business size and postcode.

Top UK comparison websites include:

• Uswitch for Business
• Love Energy Savings
• Business Energy

Some suppliers even offer extra incentives like cashback or smart meter upgrades.

Step 3: Call and Negotiate

Don’t accept the first offer. Call the company and ask for a better deal. Many times, they will offer discounts to keep your business.

Step 4: Consider Bundles

Some suppliers offer bundles. You can get gas, business internet, and electricity all in one package. This can save time and sometimes money.

Real-World Case Study: Small Café Saves Big

Maggie runs a 12-table café in Manchester. She was paying £600 per month on electricity. Her friend told her to compare suppliers online.

She found a fixed-rate plan that dropped her monthly bill by £120. Over a year, she saved £1,440. That’s enough to buy a brand-new coffee machine!

Maggie also switched to a green energy supplier. She promoted it on her menu. “Now serving coffee powered by wind energy!” Customers loved it.

What Happens When Your Contract Ends?

When your contract ends, many suppliers move you to “out-of-contract” rates. These can be 80% higher than what you were paying!

Set a reminder in your calendar 1 month before your contract ends. That way, you can switch in time and avoid the price hike.

Tips to Lower Your Business Electricity Costs

1. Use Energy-Efficient Equipment

LED lights use 80% less power than regular bulbs. Replace old appliances with energy-saving ones. Your wallet will thank you.

2. Install a Smart Meter

A smart meter shows how much energy you use, in real time. When you see your usage, you tend to lower waste.

3. Turn Things Off

Turn off lights when you leave the room. Power down machines after work hours. This simple habit saves hundreds every year.

Conclusion: How to Get Cheaper Business Electricity Rates

You don’t have to accept high energy costs. Here’s what you can do:

1. Check your current plan—know what you’re paying now
2. Compare new business electricity rates online
3. Pick a deal that matches your business needs

By taking action now, you can cut costs, stay green, and be smart with every single pound.