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Business electricity rates and tariffs explained


There are hundreds of different business electricity tariffs because prices depend on a variety of factors including location, consumption and contract length. Here we give you the low-down.

Contract length

Business electricity contracts can vary in length from one to four years. Generally the shorter the contract term the lower the unit prices but as with everything there will always be an exception to the rule!

On the whole however, a one year deal will usually be cheaper than a four year deal. This can in part be explained by the fact that your energy supplier won’t be able to predict future business electricity prices and has to buy the electricity you will need in advance (when you take out your contract). It’s usual for prices to increase over time but no-one can really predict how much they will go up or down.

Location

As we explain in the article: What is the difference between commercial energy rates and domestic rates? where your business is located can affect the electricity rates that you are offered. If you are based in a rural area it will cost more to get energy to you than if your business is based in a city.

Consumption

Energy providers find it much more difficult to predict how much electricity a business will consume in a year compared with domestic consumers. There is what’s called “certainty of usage” for domestic users but businesses don’t benefit from this.

Electricity rates change daily

Tariffs can also change on a daily basis. This is down to the way energy suppliers buy their power and is explained more fully in the article: Why do business energy prices fluctuate?

If you miss your renewal period and end up being rolled over into a new contract you may find you’re paying higher rates than you should be as we explain in the article: Business gas rates and tariffs explained. This article also explains how being on out of contract rates, deemed rates or renewal rates can affect how much you pay for your energy.

As there are so many different elements that make up business electricity rates it’s easy to see why there are hundreds of different electricity tariffs. It’s also easy to see that it helps to have someone guide you through the process of comparing and switching. Your SwitchMyBusiness.com personal switcher will lead you through the whole process, providing you with all the options so that you can decide which one suits your business best.

For the latest business electricity news and information visit our electricity section.

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