What factors to consider when choosing a supplier for your small business electricity
Here’s everything you need to know when choosing a small business energy supplier for your small business electricity rates.
Real customer reviews
When choosing a supplier for your small business electricity, you will want to choose a supplier you can trust. Take a look at our business energy suppliers to find out more about the suppliers that may be available in your area.
We recommend checking Google reviews, Trustpilot scores and recommendations from friends to help you make a final decision.
Fixed or variable rate contracts
When choosing a small business electricity supplier, you should consider whether or not you want to take out a fixed contract or a variable contract.
A fixed contract will give you certainty of how much you will be paying for business electricity per kWh for the entirety of your contract. It protects you from future price rises at the expense of missing out on potentially low prices.
A variable rate contract will expose your small business to the volatility of electricity prices, which may be beneficial if your business can participate in some form of electricity arbitrage.
See our detailed business energy tariff guide to learn more, and ask providers to give you quotes for both variable and fixed tariffs.
Your contract length
How long do you want your small business electricity contract to last? A small business electricity contract may last anywhere between 1-3 years, so ask small business energy suppliers to provide you with quotes for a range of contract terms.
Standard or renewable electricity
What type of electricity do you want? Standard, renewable or a fuel mix. When considering a small business electricity supplier, check what types of electricity they offer and whether it suits your business goals and needs.
For instance, some businesses undertake detailed carbon inventories to monitor their footprint or to ensure they are carbon neutral by purchasing carbon credits. A renewable electricity tariff ensures their carbon footprint is lower.
Choosing the right electricity plan for your small business
Small business owners have two options for business electricity plans. A fixed-rate plan with certainty over the cost of each kWh of electricity or a variable plan that will change based upon the latest market conditions.
Read on to explore the pros and cons of each of these types of business electricity plans.
You can request exact kWh pricing directly on our business electricity rates page.
Fixed-rate vs variable-rate – small business electricity plans
Here are the two biggest reasons to consider a fixed-rate small business electricity plan:
- Simplicity – Fixed rate business electricity is the simplest to understand and manage. Throughout your contract, you’ll pay a fixed unit rate per kWh of electricity consumed plus a fixed daily standing charge. The simplicity means that it is easy to forecast your business electricity costs based on your actual usage for the year.
- Certainty – The price of electricity can fluctuate widely with geopolitical events, just like it did in 2022. A fixed rate small business electricity plan protects you from rising wholesale costs.
These are the two biggest reasons to consider a variable rate business electricity plan:
- Flexibility – Unlike a fixed business electricity contract, you can switch business electricity suppliers anytime, avoiding expensive early termination fees.
- Benefit from falling prices – Businesses on variable rates benefit from falling electricity prices. In the first half of 2023, wholesale electricity prices have fallen steadily, helping those companies that are on a variable tariffs.
It’s worth noting that fixed rate electricity tariffs for small businesses are usually cheaper, as suppliers want to attract switches from new customers.
Renewable energy options for small businesses
There are over 5.5 million small businesses in the country, which have an important role in the UK’s transition to net-zero.
There are two renewable energy options for small businesses:
- Sign up for green business electricity rates – Most business electricity suppliers now offer renewable electricity tariffs, where your power is generated from wind, hydro and solar. These tariffs are more expensive than typical business electricity rates but offer the easiest route to renewable electricity.
- Install a small-scale renewable electricity generator – Installing commercial solar panels or a small wind turbine are ‘permitted developments’, avoiding a planning permission headache. Businesses can also benefit from the smart export guarantee scheme to sell any excess electricity back to the grid, making renewables an attractive investment option.
Check out our complete guide to renewable energy options for businesses.