Top Ten Tips for Fixing Your Business Electricity Contract

Business electricity contracts can be difficult to parse, with every business having different needs and priorities. However, there are some things that all businesses strive towards: optimising costs, minimising risks and making sure the contract aligns with operational needs and goals.

Here are the top ten tips for any business looking to fix their business electricity contract:

1. Review Your Current Contract Thoroughly

Begin by analysing your current contract. Check the rates, terms, and renewal date. Look for any clauses related to price increases, hidden fees, and the duration of the contract.

If your contract is up for renewal, it’s a good time to check if your current deal is still competitive.

2. Understand Your Energy Usage

Track your business’s energy consumption for at least 12 months to understand your usage patterns. Identifying peak demand times and seasonal fluctuations will help you choose the best pricing plan.

Consider whether your business could benefit from energy efficiency measures. These could include energy-efficient lighting or equipment to reduce overall consumption.

3. Compare Rates from Multiple Providers

Don’t settle for the first offer. Use energy comparison websites to compare rates and plans from different suppliers. Many suppliers may offer competitive business energy rates, so it’s worth shopping around.

Compare both fixed and variable rate contracts to determine which is best for your business. Fixed rates offer price stability, while variable rates can fluctuate with market conditions.

4. Consider Time-of-Use (TOU) Tariffs

If your business operates with variable energy demand, time-of-use (TOU) tariffs could be beneficial. These tariffs charge different rates depending on the time of day, with lower rates during off-peak hours.

Adjusting your operations to use energy during cheaper periods (like evenings or weekends) could lead to significant savings.

5. Negotiate Terms and Discounts

Don’t be afraid to negotiate with your supplier. Many businesses, especially larger ones or those with high energy consumption, can secure better rates by negotiating.

Ask about volume discounts or loyalty discounts. Some suppliers offer better deals for long-term contracts or if you are switching from a competitor.

6. Evaluate the Length of the Business Energy Contract

A long-term fixed-rate contract might give you stability. However, it could also mean you miss out on potential savings if market energy prices drop.

Businesses with changing growth or energy needs can benefit from shorter contracts. Contracts that last one or two years offer more flexibility.

Always weigh the pros and cons of locking in a price versus remaining flexible.

7. Consider Green Energy Options

Switching to a green energy plan can be an attractive option if your business is looking to improve its sustainability credentials. Many energy suppliers offer renewable energy contracts.

In some regions, you may qualify for tax incentives, grants, or green certifications by opting for renewable energy, which could improve your brand image as well.

8. Monitor Your Energy Usage Regularly

9. Review Early Termination Fees and Exit Clauses

Before you commit to a new contract, ensure you understand any early termination fees or exit clauses. Some contracts may include hefty penalties if you decide to switch providers or upgrade your contract before it expires.

If you’re locked into a long-term contract but can negotiate a better deal, calculate whether paying the early exit fee will result in overall savings.

10. Consider a Hybrid or Multi-Supplier Approach

For larger businesses with varied energy needs across different locations or departments, it may be beneficial to split your energy supply between different suppliers or have a hybrid contract.

This approach allows you to take advantage of different pricing structures, such as fixed-rate contracts for predictable energy usage and variable-rate contracts for more flexible parts of your business.

By applying these strategies, you can optimise your business electricity contract to reduce energy costs, improve sustainability, and ensure that your energy plan aligns with your specific operational needs.

Apertus Group can help businesses evaluate their energy needs and find the right deal for their needs. Learn more by getting in touch on 01604 212 828.