There are many options when it comes to getting a good deal on your business electricity. If you’ve recently received a renewal letter from your electricity supplier, you may be wondering whether it’s a better idea to stay with your current supplier or to venture into the wild west of energy quotes to see if you can snag yourself a better deal.
The thought of doing the latter can seem like a daunting task for many businesses, especially if you run multiple sites. Taking time out of an already hectic schedule to seek out a deal that will ‘only save you a few pounds’ may seem pointless.
The truth is, it doesn’t have to be difficult to switch suppliers and if you decide to renew your contract instead of searching the market for a more competitive deal, you could potentially miss out on thousands of pounds in savings.
Before we get into why it may not be the most cost-effective idea to renew your business electricity contract with your current supplier, let’s take a look at why renewal might actually be the best option for your business.
When renewing your business electricity contract actually makes sense
If you’re one of the 10% of businesses out there who hasn’t renewed your business electricity contract or switched to another supplier in the last few years, then it’s more than likely you’re on ‘deemed’ tariff, and you’re paying far more than average for your business electricity.
Why does this happen?
When you don’t renew or end your contract by the deadline your supplier gives, your contract essentially lapses.
In order to keep your lights on and your equipment running, your supplier charges you out of contract rates, which more often than not, results in you paying around 80% more for your electricity than what you would be paying if you renegotiated a deal or switched suppliers.
If you’re currently on a deemed contract (check your latest bill to find out if you are) and you want to stop paying those inflated prices as soon as possible then signing a new contract with your current supplier might save you a bit of time and money upfront.
Before you make a decision though make sure you talk through your options with an impartial expert. That way you’ll know the best route for your business to take.
Here are a few more things to consider before renewing your business electricity contract:
How much it will really cost you to stay with your current supplier
As we mentioned above, most businesses see the decision to renew their electricity contract as a battle between saving time vs saving money, when in reality there isn’t battle at all.
While renewing your contract is always going to be a bit quicker than looking for a new supplier, the process isn’t as time-consuming as it first appears.
In fact, switching business electricity suppliers can be a simple task of filling out a form, sending a recent energy bill and getting a quote that shows you the best deal for your business based on the current market.
Okay, but can you really save money by switching?
Absolutely! It’s important to remember that if you’ve been with your current supplier for more than a few years (let’s say you’ve renewed your contract once or twice) then you are probably paying a lot more than what you would be paying if you signed a fresh contract.
While market rates are often made competitive in order to attract new customers, the unfortunate reality is that this is rarely the case when you’re already a customer
In fact, in most industries where long-term contracts are involved, whether it’s mobile phones or website hosting, you’ll often find that the rates you end up paying after a few years, are more expensive than when you first signed up. Which is why it can often make sense to change suppliers every few years.
Of course, price isn’t the only point of consideration when it comes to choosing a business electricity supplier. Customer service and other incentives also come into play, and if you’re happy with the service you’re receiving at the moment, you might not want to risk moving to a supplier that doesn’t tick all your boxes.
Still, there’s no harm in taking a look at the current market, as it may have changed since the last time you switched. In fact, many of the smaller electricity suppliers offer both competitive prices and superior customer service.
So, when’s the right time to start shopping for a new deal?
Believe it or not, you don’t have to wait for your contract to end before you start looking for a deal that better suits your needs.
In fact, according to Ofgem, you can begin your search up to six months before your contract is up for renewal, giving you more time to find the most suitable deal for you.
If you contact Wildfire today, we’ll help you find a new contract, will help you lock in your new tariff at the current rate so it’s ready whenever your contract ends.
Although you can certainly shop around for an electricity deal that better suits your business, it’s important to keep in mind that if you’re on a fixed-term contract, you won’t be able to begin your new business electricity contract until your current one ends. Same rules apply if you owe your supplier money.
A quick note on microbusinesses:
If your business has less than 10 employees or makes a yearly turnover of less than €2 million, then you have a little more leeway when it comes to either renewing your electricity contract or switching suppliers. You can:
1) Tell your suppliers that you’re planning to switch at any time during your contract
2) Notify your supplier that you’re terminating your contract closer to your end date (30 days instead of 90)
Your supplier must also let you know how much electricity your business consumes every year and how their new rates compare with your current one, at least 60 days before your contract ends. If you’re not sure whether you’re a microbusiness or you want a little more information about energy contacts for microbusinesses, head over to the Ofgem website.
Before you go…
Here are a few things you can do to get a business energy deal that suits your budget and matches your energy needs.