Business energy: Options, considerations and expectations for SMEs
6 min read
12 March 2019
The uncertainties of Brexit will have sensible business leaders considering options and planning for all scenarios. Although the stakes are higher than usual, this approach shouldn’t represent a departure from the norm.
As an effective decision maker, you’ll plan for a range of eventualities on a daily basis. And deciding how you power your business is one of the most fundamental choices you can make. If you get it right, it could be one of the most infrequent too.
So here are some of the business energy options available to SMEs and other energy considerations to take into account.
How much does a typical UK business spend on energy?
Before considering your options, it’s important to understand how your business’s energy consumption compares to others of similar sizes.
We’ve broken down these UK figures from Businessenergy.com for average business electricity rates by company size:
- Electricity (kWh): 7,500
- Gas (kWh): 5,000
- Total bill: £1,518
- Electricity (kWh): 20,000
- Gas (kWh): 15,000
- Total bill: £3,664
- Electricity (kWh): 35,000
- Gas (kWh): 35,000
- Total bill: £6,563
What business energy options are available to SMEs?
A detailed understanding of your business energy options will help you get the right deal for your company. The ‘Big Six’ business gas and electricity suppliers might well be a ‘quick fix’ option for you. They are established companies, after all, and they’ll likely get the job done.
But there are many other options, from using a broker to negotiate on your behalf to using other specialist business energy suppliers. They may be able to offer you a more flexible energy solution that aligns more closely with your business needs.
The ‘Big Six’
The six main business gas and electricity suppliers in the UK are British Gas, Npower, EDF, E.ON, Southern Electric and Scottish Power.
The graph below shows the average UK business electricity bills per year from five of the ‘Big Six’.
Other business energy suppliers
There are other specialist business gas and electricity suppliers to choose from in the UK, so it’s worth investing time in getting a range of quotes to make an informed decision.
Contract types, products, service levels and energy sources will vary from company to company. So try to avoid the temptation to just focus on ‘the cheapest’ and make sure you find a supplier able to meet the unique needs of your business.
What should SMEs consider when looking for an energy supplier?
1. Length of the contract
For peace of mind, it’s best to do the hard work up front. This means looking for the longest-term contract available for the best price you can get. Once you’ve done this, you can be sure of your utilities costs for the longest period possible. It also means your business won’t be affected by changing prices.
2. Dual fuel tariffs
Choosing dual fuel energy means getting your electricity and gas from the same supplier. This has several benefits.
You’ll have one point of contact for both electricity and gas, creating less admin and making it easier to manage and control your energy. Dual fuel isn’t always cheaper than having separate energy providers, but energy companies often offer discounts on dual fuel tariffs.
3. Renewable and eco-energy options
Consumers and businesses alike are becoming increasingly aware of the impact of energy consumption on the planet. But public pressure isn’t the only reason to choose eco-energy.
Renewables such as wind turbines, solar power and biomethane can actually help you tighten your control over your energy bill. Indeed, wind turbine prices have decreased by 30-40% since 2009. In many countries, solar power now costs less than traditional grid power. It’s also unaffected by fluctuating commodity prices, so cost are more predictable and stable.
What should SMEs expect from their supplier?
From the ‘Big Six’ to smaller energy suppliers, attitudes to handling customers can vary dramatically.
When considering energy suppliers, you should expect high quality in the following areas:
Accuracy should be the first thing on suppliers’ minds. Installing a smart meter helps to avoid unnecessary discrepancies. But if something does go wrong, the communications from your supplier’s customer service team should be fast, responsive and helpful.
As your business grows, your energy requirements will change with you. It’s worth taking the time to find a supplier willing and flexible enough to cope with your expansion.
If you increase production or move to a new building, for example, they should be able to assist with meter upgrades, site connections and disconnections, and installations or removals.
It’s not enough these days to be a reliable energy supplier. Your supplier should provide tips and advice to reduce your energy – helping you save money whilst looking after the planet.
Whether you’re looking for fixed rates, a flexible tariff or energy from an established energy supplier, Total Gas & Power can help. Request a no-obligation quote today.