Small Business Energy Guide
Running a small business often entails managing your business outgoings to help cut costs. With energy costs rising, finding ways to save money on your energy bills is more important than ever…
Business energy contract due to renew? Call us on 0800 9777 000 or fill in our business quote form to see how much you could save…
How can I find the right energy provider for my small business?
To find the right business energy provider you should consider the following:
Pricing
Compare the prices of different energy providers to find the best deal. You can use an energy comparison service or broker like Exchange Utility to help you find the deal best suited to your small business.
Reviews
You should look for brokers or providers who have a good track record of providing excellent customer service to businesses that are similar to yours. With our in-depth knowledge of the energy market and high customer satisfaction ratings, Exchange Utility and our expert team of business energy brokers can help connect your business with the right suppliers.
Choice of tariffs
Choose an energy provider that offers a range of tariffs that suit your business needs. We always suggest an energy provider that we feel will be best suited to your business so that they can provide a cost-effective tariff. However, whatever we suggest we will always let you decide which provider you feel is best.
Eco-friendliness
Many small companies want to do their part when it comes to reducing global emissions, and have started looking for ways to cut their carbon footprint. Finding a provider which offers renewable tariffs will allow your business to be both sustainable and successful in the long term.
An Exchange Utility energy expert will be able to provide you with all of the advice that you need to ensure that your small business has the right energy provider for your needs.
How does energy pricing work for small businesses?
This is all dependent on which energy supplier you decide is best for your business. There are a few general types of pricing available for small businesses, including:
Wholesale energy prices
The wholesale price of energy refers to the price at which energy providers will buy energy from generators, which can often fluctuate depending on many factors. Those factors include weather, international conflicts as well and supply and demand.
Retail energy prices
The retail energy price is the cost of energy for customers charged by the provider, a price which is usually higher than wholesale prices. The cost is more due to the distribution, customer service and running of the energy provider.
Business energy tariffs
How energy is priced is known as a tariff, charging a fixed tariff means the cost per unit of energy is fixed, whereas variable tariffs will see the price shift up or down.
What is classed as a small business?
According to the UK Government, the criteria to be classed as a small business include:
✔ Between 11 and 50 employees
✔ A turnover of £10.2 million or less
✔ £5.1 million or less on its balance sheet
✔ Between 11 and 50 employees
How much energy do small businesses use?
The amount of energy a small business uses varies dramatically depending on the size, type and location of the small business. According to the UK Government, the average business will use around 5,000 kWh of electricity and 10,000 kWh of gas per year.
You will be classed as a small business by energy suppliers should your energy usage be below the above figures.
What types of small business energy contracts are available?
Fixed-price tariffs
These tariffs offer a fixed price per unit of energy for a fixed period of time, which can be anything from one to five years. This is ideal if you’re worried about rising energy costs.
Variable-price tariffs
The price per unit of energy varies based on many different factors that can affect the wholesale price of energy. It is slightly riskier to opt for a variable price as your monthly spending may increase, though it can also decrease.
Dual-fuel tariffs
These tariffs offer both electricity and gas from the same provider, a convenient option if you’re looking to consolidate your bills.
No standing charge tariff
A standing charge is a fixed daily cost which is paid by you to your energy supplier. Having no standing charges on your energy bills means that you will not pay the standing charge fee. These are a few which maintain the network including materials and maintenance work. Due to not paying a standing charge fee, the likelihood is you will have to pay more for your standard tariff.
Quick tips on saving on energy bills as a small business
1. Understand your business energy usage and waste
Completing an energy audit on your workspace allows you to locate areas within your business that are using too much, or areas where your business is wasting energy.
2. Use energy-efficient lighting
This isn’t a new idea but it is one that’s often overlooked. Make sure your lighting is energy efficient – it’s a simple switch that is super-quick and cheap, and could save you lots of money across a year.
3. Don’t waste energy
Turning off appliances that are not in use, both overnight or over the weekend can save you some extra cash on your energy bills.
4. Replace appliances with energy-efficient ones
An office kitchen sees a lot of use, the kettle might be boiling on and off all day, microwaves and ovens being reheated every 5 minutes – sound familiar? Replace these energy-guzzling appliances with more efficient versions to save money on your bills.
5. Make it a team effort
You can’t do all of this on your own, getting your employees on board will make these changes much easier. Once your staff are taking it upon themselves to turn off their computers and flick the lights off on the way out you’ll begin to make a saving.
Can my small business get help with energy bills?
There are many schemes available for small businesses to help them with their energy bills, including the following:
Energy Bill Discount Scheme
This scheme offers a discount on electricity bills to eligible businesses, until March 2024 this was available to small businesses but no scheme has been put in place since its removal.
Business Energy Efficiency Grants
These grants can be used to help businesses invest in energy efficiency measures, such as installing energy-efficient lighting and insulation.
Hardship Funds
Some energy providers will offer a hardship fund that will help businesses that are struggling with paying their energy bills.
What to do if your small business is struggling to pay for its energy bills?
It would be fair to say that a lot of businesses are struggling in this current economy, so paying for rising energy costs can be a struggle. Ofgem provide guidance on such issues, to ensure you’re supported through these difficult times. You should contact your supplier directly as communicating with them is always the best option. Your supplier could help you with payments, whether that be extending your payment dates or allowing for a payment plan so you can manage your bills.
Ofgem also suggests you consider getting into contact with managing business debt and budgeting through the Business Debtline from Money Advice Trust. This charity provides free debt advice to small businesses and the self-employed in England, Scotland and Wales. The expert team of debt advisers will try their best to improve your situation, you can use the Business Debt Line advice to get help now.
Small business energy FAQs
Is my small business eligible for government help?
To check if your business is eligible for the Energy Bill Discount Scheme, you can use the government’s eligibility checker.
What if I run my small business from home?
If you run your business from home you may be able to get help with your business energy through the Domestic Support Scheme.
What if I can’t pay my business energy bills?
If you are struggling to pay your business energy bills you should contact your energy provider as soon as possible, as they may be able to offer you a payment plan or other assistance.
Is my business a small business or a micro business?
Before we get started on which energy provider is the right one for your business, we need to see if you’re classed as a micro business or a small business.
Microbusinesses are the smallest type of business in the UK and you’re only considered to be one if you have less than 10 employees.
What is the difference between a small business and a micro business?
The difference between a small business and a micro business is that a micro business only has a maximum of nine employees as we have just mentioned, whereas a small business can have anything under 250 as well as having an annual turnover of less than £25 million. A sizeable difference! Microbusinesses and small businesses also have differing contract types, including cheaper and more favourable deals for those with microbusinesses. A micro business is also allowed to terminate its energy contract at any time, this allows them to find the best deals on the market, whenever they feel they’re being overcharged. A small business is only allowed to switch when they have entered an end-of-contract period.
How many small businesses are there in the UK?
In 2022 there were 5.47 million small businesses in the UK (0-49 employees) accounting for 99.2% of the total amount of businesses in the UK. This data can be found here on the government website.
In comparison to small businesses and large businesses, there are a significantly bigger number of small businesses. There are a total of 35,900 medium-sized businesses (0 to 249 employees) and 7,700 large businesses (250 or more employees).
Considering switching to a new business energy supplier?
Here at Exchange Utility, our expert business energy brokers can help you find a new business energy supplier by comparing tariffs and options available to your business to find you the right deal.
✔ Our customer support team is one of the best in the industry
✔ Contact Exchange Utility to switch your energy tariff in as little as 5 days
✔ We have years of experience in the comparison of businesses’ gas
✔ We have built a solid reputation for being a reliable, independent and trustworthy comparison company
✔ We can compare gas prices from industry leaders to find you competitive rates
✔ Whenever a business gets in touch with us, we always work hard to get them the right rates for their business
✔ Don’t just take our word for it see what our customers are saying about us on Trustpilot
Business energy contract due to renew? Call us on 0800 9777 000 or fill in our energy quote form to see how much you could save…
