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What our Nerds say about business gas

BREAN

BUSINESS NERD

Businesses across the UK need a good supply of energy to operate effectively. Along with electricity, gas is a main source of energy, which your company can sign up for with a business gas contract.

Designed for companies rather than domestic households, contracts for business gas can last up to five years. Typically, business gas tariffs are single fuel. This means that you’ll have to pay for it separately even if your electricity is supplied by the same provider. Most gas suppliers do not offer a cooling-off period, giving you time to change your mind and cancel the contract.

Switching to a new business gas deal could help you save money. You’ll be able to switch once your business gas contract comes to an end or if you move to new premises.

How it works

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Enter your postcode and a bit about your business and energy needs - gas, electricity or both.
2
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3
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Once you've found the deal that's right for you, apply online or through an advisor - the switch will be handled for you.

This comparison service is provided by LoveEnergySavings.com Ltd on behalf of NerdWallet Ltd.

The data you input and submit is provided directly, and processed by Love Energy Savings. Calls made to this number will be handled by the team at Love Energy Savings. Details of terms and conditions, privacy and cookie policy can be found at LoveEnergySavings.com.

*£1,067 is the average saving Love Energy Savings customers have saved since inception. This data was collected 01.07.2021, The average SME electricity bill is £2,400 p.a. (consumption below 50,000kWh).

Should I renew or switch business gas suppliers?

You can switch to a new business gas provider if:

  • Your contract ends: Your business gas supplier will normally contact you when your energy switching window opens. It is usually 90 days before the end of your contract. The switching window is the earliest point that you can start comparing new prices and arranging a new business gas deal.
  • You’re on a default contract: This usually occurs when you take over a new property or have been moved on to a default or ‘deemed’ contract after a fixed-term contract ends.

It can take around three to six weeks to switch to a new business gas supplier.

Unlike domestic gas, many business gas contracts don’t offer a cooling-off period. This is a period of 14 days in which you can decide to cancel a service and get your money back. So it’s important to understand the terms and conditions of your tariff before signing up.

The exception to this are micro businesses, which have their own set of rules that includes a 14-day cooling-off period. As defined by Ofgem, to qualify your business will need to have fewer than 10 employees, and an annual turnover or balance sheet of less than €2 million. It will also need to use no more than 100,000 kWh of electricity and 293,000 kWh of gas a year.

If anything is unclear about your business gas contract, get in touch with the supplier to clarify the details.

Why switch business gas?

Switching to a new business gas deal or provider could help you save money on business running costs. That is why it is so important to compare suppliers, and select the best option for your business.

Cost isn’t the only reason to switch business gas suppliers, however. Better service, better contract terms, and greener energy are all things to potentially consider when weighing up whether to change providers.

How to switch business gas suppliers

There are five steps you should follow when looking to switch business gas suppliers:

  1. Find the name of your current business gas provider.
  2. Check your contract to find out when you can switch suppliers.
  3. Get the details of your business gas contract, including yearly usage.
  4. Compare business gas providers to find the best deal for your organisation.
  5. Finalise your new business gas contract.

What information do I need to switch business gas?

You’ll need the following details to hand when looking for a new business gas contract:

  • your supply type
  • your energy usage in kWh or annual expenditure
  • the date when your contract ends

These will usually be in your most recent business energy bill. If you can’t find a bill, it is possible to use estimates – but your quotes might not be as accurate.

You can use these details to compare quotes from different suppliers. Most suppliers let you sign up for a business gas deal online. You will also need to provide details about your business, such as its name and business type.

Can I switch to a green business gas supplier?

While there are fewer renewable options for gas when compared to electricity, there are a number of providers claiming to supply ‘green’ business gas. Often this will be a combination of renewable biogas (around 10%), and carbon-offsetting to help ‘neutralise’ the remaining gas generated by other means. It is possible, however, to find providers offering 100% green gas.

You should look out for mention of a Renewable Gas Guarantees of Origin (RGGOs) certificate to confirm the status of the supplier’s ‘green’ gas.

What business gas tariff options are available?

There are several types of business gas tariffs:

  • Fixed: the price you pay per unit of gas is fixed for the term of your contract. Your bill may still vary depending on how much energy you use.
  • Variable: the price of gas per unit varies during your contract because it is linked to market activity.
  • Deemed: a tariff that usually applies when you take over a new property or have been moved to a default contract after a fixed-term contract ends.
  • Rolling: if you don’t find a new contract before your fixed-term deal ends, you may be moved to a rolling business gas tariff.

How much should I pay for business gas?

Generally speaking, the cost of business gas rates are affected by the type of contract you sign up for.

Fixed-rate contracts may be cheaper because the price you pay per unit of energy is locked for the duration of your contract and you are protected against price rises. However you won’t benefit from price decreases either.

Variable-rate deals are linked to the market, which means that they fluctuate throughout your contract.

How is the cost of business gas calculated?

The underlying cost of business gas is driven by the price of purchasing energy on the wholesale market. This itself is informed, among other things, by the weather, global demand, and geopolitical issues such as international conflicts and trade disputes.

On top of that, there are a number of other charges that come bundled with your unit rate, i.e. the amount you pay per kilowatt hour (kWh) for your business gas. This includes VAT, the Climate Change Levy, your standing charge, and, potentially, independent gas transporter fees.

Average UK business gas usage and prices per kWh

The below table reflects the average price per kWh as published by the Department for Business, Energy & Industrial Strategy (BEIS) for Q4 2021. The price you are quoted today, however, will likely have risen due to the factors mentioned above.

Average business gas prices per kWh (including CCL)

Business size Annual usage (kWh) Price per kWh
Micro business 5,000 - 15,000 5.34p
Small business 15,000 - 30,000 3.95p
Medium business 30,000 - 65,000 4.51p

Sources: Price per kWh based on BEIS Q4 2021 figures. Annual usage based on Bionic, Business Energy and Upower.

» MORE: What is the UK energy crisis?

How can I get cheaper gas rates?

One potential way to get cheaper business gas rates is by comparing providers when you come to the end of your contract to see if you can get a better deal.

Factors that affect which rates you can access include where your business is based, your energy consumption, the length of your contract, and your business credit rating.

While you might not be able to change where you work, and how large your business is, you could consider a longer contract in order to get a cheaper rate.

Similarly, you can try to take steps to improve your business credit score in the run up to you seeking a new business gas contract.

Who should get business gas?

You should consider a business gas contract if you have a:

  • micro business
  • small business
  • large business
  • charity or non-profit organisation

How to choose the best business gas supplier for me

Before starting your search for a new business gas provider, it’s best to work out your company needs. For example, if your business wants to reduce its carbon footprint, it might be worth considering a green energy contract.

A supplier’s customer service quality is important to think about too. This will ensure that you get the support you need if anything goes wrong.

It’s also worth taking the time to work out how much gas your business uses. Once you have an idea of how much you spend, shop around and compare different deals.

Love Energy Savings can help you find the right deal for your company. All you need to provide is your business address, contact details and how much you currently spend on gas. You will be able to see how much you could save by switching to a different business gas deal or supplier.

Business Energy – Gas FAQs

Are business gas prices capped in the UK?

No, business gas prices are not capped in the UK. Neither are business electricity prices. Ofgem’s energy price cap only applies to domestic households.

Is business gas cheaper than domestic gas?

Business gas may be cheaper than domestic gas, but it depends on how big your company is, how much gas it consumes and where it is located. Business gas prices are calculated differently from domestic gas rates. So you may have to pay a higher rate of VAT on a business gas plan compared to a domestic one.

Additionally, the cost of your business gas may be cheaper per unit, but you’re likely to use much more of it if you’re running even a small business.

Am I eligible for business gas if I work from home?

It is possible to get business gas, and business electricity, if you work from home. However, you will likely need to meet a minimum usage requirement for your business gas versus your domestic gas to be eligible.

When can I switch business gas suppliers?

You will be able to switch business gas suppliers at the end of your current contract, but you can inform your provider of your intention to switch during your specified notice period. You should be able to find the end date of your contract on your business gas bill. If not, you may need to contact your provider directly.

Can I switch business gas suppliers if I use an independent gas transporter?

Yes. The process to switch business gas suppliers is no different whether your organisation uses an independent gas transporter or not.

Who is my business gas supplier?

You should be able to find the name of your business gas supplier on your latest bill. If you have just moved into a new business premise, and are unsure of your provider, you can ask your landlord or the previous tenant.

If you still can’t find your business gas provider, you can use the Meter Point Administration Service’s ‘Find My Supplier’ tool. They can also help you find your Meter Point Reference Number (MPRN).

» MORE: What are MPRN and MPAN numbers?

How do I know when my contract ends?

You should be able to find the end date of your contract on your business gas bill, or your original contract. If not, you may need to contact your provider directly.

If you are a micro business, your supplier is required to put your contract end date on every business gas bill you receive.

What gas meter do I need?

There are a number of different meters available, which will suit different energy needs. You might want to consider a smart meter for businesses, so your readings are submitted automatically, therefore ensuring more accurate bills.

Should I lock in my gas rate?

Fixed-rate business gas deals tend to be cheaper as the price you pay per unit of gas is locked for the duration of your contract. But it’s worth noting that it may not be cheaper if average fuel prices drop after you’ve locked in.

Although your energy bills may vary depending on how much energy you use, a fixed-rate deal could help with budgeting and protect against price hikes. As mentioned though, it may also mean that you don’t benefit from potential price drops if they were to happen.

How can I save my business money on gas prices?

The following tips could help you save money on your business gas bill:

  • Know how much you use: it’s important to understand how much energy you use and how much it costs. It’s worth asking your supplier if a smart meter can be installed. This could help you estimate your business gas usage more accurately.
  • Switch to a cheaper deal: shopping around for a new business gas deal if your contract is coming to an end could help you find a cheaper tariff. Price comparison websites, such as NerdWallet, can be a great place to start and help you find the most suitable provider.
  • Be energy efficient: taking steps to become more energy efficient and reducing energy waste could make your business gas prices cheaper.

What is micro business gas?

Micro-business gas tariffs are designed for companies that meet the following criteria:

  • fewer than 10 employees
  • yearly turnover or yearly balance sheet of less than €2 million
  • uses less than 293,000 kWh gas a year

How do micro businesses switch gas suppliers?

A micro business would switch gas suppliers in exactly the same way as a larger business. However, they are entitled to specific rights, including:

  • a shortened notice period of 30 days
  • a 14-day cooling-off period if you change your mind
  • a renewal cap of 12 months if you let your contract rollover

Would there be any gas supply issues when I switch?

Sometimes suppliers may stop or object to you switching to a new deal or business gas providers. This usually happens for one of the following reasons:

  • You haven’t given enough notice.
  • You are still under contract.
  • There is an outstanding balance on your account.
  • You have just moved to a new location and need to register a new account before the old one is closed.
  • Suppliers have incorrect details on file.

Your energy supplier has to explain why you can’t switch, and your options, as soon as possible. In some cases, you may be able to switch to a new business gas deal with your existing supplier if you’re unable to move to another supplier.

Can I change my mind after starting a new contract?

Most business gas contracts don’t offer a 14-day cooling-off period, during which you can change your mind and cancel a contract or service except for micro businesses. In contrast, cooling-off periods are fairly common in domestic gas contracts.

So it’s really important that you understand and are happy with the terms of your tariff before signing up. If anything is unclear about your business gas contract, get in touch with the supplier for clarification before you sign up.

Can I get business electricity and gas supplied together?

You can get electricity and gas for your business from the same supplier, but you will have to pay for them separately. Business energy contracts are single-fuel. That means that you will have different contracts for your business gas and business electricity.

Should I change my gas supply if I’m moving premises?

If you’re moving to new premises, you can choose to transfer your business gas supplier or end your contract.

If you would like to move your business gas supply to a new property, you will need to give your provider at least one month’s notice. Business gas contracts can be agreed upon years or months in advance, so you could arrange for the switch to be put in place much earlier too. The supplier will arrange your final bill, and you’ll need to set up a new business gas contract for your new premises.

If you don’t set up a business gas contract before you move to the new property, you will be transferred to a deemed rate tariff with the building’s current suppliers. These tariffs tend to be more expensive, so it’s worth having a deal ready to go for when you move in.

Are there green business gas options?

Yes, some suppliers offer green business gas tariffs. It’s worth shopping around and comparing different deals to find the right one for your business.

Should I use a broker to get the best business gas rates?

A business energy broker can help you with the entire switching process, including negotiating your contract and managing the changeover. However, you should be aware that these services are not free – even if your bill doesn’t show any costs, you will be paying some form of commission. If you do not receive a full written disclosure of your energy broker costs, you may be able to make a business energy claim.

» MORE: Do I need a business energy broker?

About the author

Brean is a personal finance writer at NerdWallet. She covers a range of financial topics and has written for consumer titles including Which?, Moneywise and The Motley Fool. Read more

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