What are the business tariff options?
There are multiple different kinds of business tariff contracts available. These include the following:
This is where you pay a fixed unit rate in kilowatts per hour (kWh), for a fixed period of time, i.e. the length of your contract. Your bill will be based on your energy usage.
Unlike a fixed rate, your unit rate on a variable tariff will rise and fall based on market activity, namely wholesale energy prices. This means your unit rate will vary throughout your contract. This could end up costing you more or less money in bills than a fixed-rate contract, depending on how rates vary.
A deemed rate is normally among the most expensive business energy tariffs out there. It will be in place because you have just moved into a new business premises and are yet to negotiate your own contract with a business energy supplier
However, you are free to switch suppliers when under a deemed contract, as there is no expiry date involved.
If you reach the end of your contract with your business energy supplier, and fail to either switch to a new supplier or sign a new contract with your existing supplier, you will be charged at an out-of-contract rate.
This is typically more expensive than a deemed rate, as you have ‘chosen’ not to source a new contract.
A flexible business energy rate would allow your business to purchase blocks of energy throughout your fixed-term contract. The flexibility also extends to how far in advance you want to buy energy.
With a ‘pass through’ tariff, you would agree to some rates and charges at the start of your contract, with the remaining fluctuating costs appearing as a separate charge on your bill. Unit rates can be cheaper with pass through contracts, as your business is assuming more risk by not locking in all of the rates ahead of time.
There are a number of other tariffs you could also consider, such as a green tariff that uses renewable sources of energy, or a multi-site tariff if your business has more than one location.