Small and medium sized businesses have been overpaying a staggering £7 billion on their gas and electricity bills. And yet, this could so easily be avoided.
If you fail to shop around for your business energy rates before your contract end date (or before your notice period) you are automatically rolled over to your provider’s standard tariff. These rollover tariffs can be up to 40% more expensive than if you looked elsewhere or renegotiated.
So, if you haven’t changed your supplier or renegotiated a new rate recently, I recommend the following steps:
Set a reminder – By setting a reminder a few weeks before your notice period you will avoid missing your end date. Businesses do not have the same cooling off periods that consumers have with energy, therefore it’s important to take action first.
Speak to a broker – By providing a broker with a copy of your most recent bill they will be able to analyse your rates and find you the best deal. You can talk to an energy broker at any time to lock in rates and look into different suppliers. Even if you don’t end up going with what they offer, speaking to a broker can give you a much better understanding of the industry and how the market currently stands.
Do your research – If you’d rather not speak to a broker, it’s easy to dig up some information from Google about suppliers, the energy market, current rates etc. Review websites like Trustpilot and Feefo can give you a good idea of the level of customer service the suppliers provide. There are also the typical comparison websites that can give you an idea of current prices – remember to search for business energy and not the consumer market. Don’t be afraid to step outside the Big Six energy companies.
Better the devil you know – There is absolutely no need to stay loyal to a particular energy supplier. Many businesses are cautious of changing provider as they struggle to see the benefits of changing over and feel that switching is a difficult process. As long as you take the above points into consideration, switching provider is generally hassle-free.If you are able to find competitive rates elsewhere, there’s no harm in contacting your current provider to see if they can match it. When doing this, avoid making any verbal contractual agreements over the phone unless you’re 100% ready as this will lock you in and prevent you finding a better deal.
Everyone wants a better deal and the cheaper price point, however, it’s worth noting that the energy market prices are always on the rise. Therefore, it’s likely that you will not find a rate that’s as low as the tariff you’re currently on, which means the crucial thing is finding something better than your rollover rate. This will be the most cost effective over time. If you do feel you’ve found a particularly good rate or a broker has highlighted this for you, it is sometimes possible to lock in this price for one or even two years.
Once you have signed a new contract, I’d still recommend being cautious. Put in place regular audits to check for inaccuracies on your bills, these errors often derive from incorrect meter readings and rate charges. Only 20% of UK businesses currently check their gas and electricity bills on a regular basis – and yet, one in five business energy bills contain errors.
Overpaying for your business energy can easily be avoided by switching energy provider or renegotiating your contract. This will only ever be made difficult if your contract has rolled over or your switching window has passed. The savings you can make, mean the small amount of effort required to switch is worthwhile.
About the author: Nolan Braterman is from Frontier Utility, an independent energy brokerage providing businesses with flexible, bespoke and price competitive energy solutions to suit any type or size of company.
SME energy stats – business.energyhelpline.com
Bill inaccuracies – www.energylivenews.com