How to Get the Best Business Electricity Rates Without Getting Ripped Off

News and Info from Deeside, Flintshire, North Wales

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Electricity is a big cost for many businesses. But most pay more than they should. Learning how to get the best business electricity rates can save you big money.

What Are Business Electricity Rates and How Can You Get the Best Ones?

Business electricity rates are what you pay for power at work. They are different from home electricity rates. Businesses often use more power, and their prices depend on when and how they use it.

You don’t have to stick with the first rate you’re offered. Shopping around can help you save a lot. In fact, small businesses can cut their power bills by up to 35% just by switching to a better rate.

So how do you get the best deal?

Let’s break it down into a few easy steps.

Step 1: Understand What Affects Business Electricity Rates

Business electricity rates depend on a few key things:

Business size: Bigger companies may pay different rates than small shops.
Power usage: The more you use, the more you pay — but bulk users often get cheaper rates.
Time of day: Power may cost more during “peak” times (like 4-7 pm).
Location: Some areas have higher delivery costs due to the grid or local rules.
Contract type: A fixed rate means the price stays the same over time. A variable rate changes with the market.

For example, a coffee shop in London may pay 16p per kWh, while one in Manchester may pay only 13p per kWh due to location and network charges.

Knowing these factors will help you choose a rate that fits your needs.

Step 2: Compare Suppliers Before Signing a Contract

Don’t just stick with your current supplier. Many businesses do, and end up overpaying.

According to Ofgem, around 40% of small businesses are on “default” rates — which are usually the most expensive. These rates can be up to 60% higher than competitive contract rates.

Instead, compare offers from different electricity suppliers. Look for:

Lower price per kilowatt-hour (kWh)
Discounts for direct debit payments
No hidden charges or fees
Renewable energy options (if you care about going green)

Some popular business electricity suppliers in the UK include:

British Gas
EDF Energy
SSE Business Energy
Octopus Energy for Business
ON Next

You can also use a switching service or broker. Just make sure they list all fees and aren’t tied to just one or two suppliers.

Here’s a quick case study:

🟢 A bakery in Birmingham used 45,000 kWh a year. Their old supplier charged 17p per kWh. When they compared rates, they switched to a new supplier offering 13.5p per kWh — saving over £1,575 a year!

Step 3: Choose the Right Type of Electricity Contract

Not all contracts are the same. Picking the right one can save money and avoid surprises.

Fixed-Rate Contracts

The price per unit stays the same for the length of the deal. This is good if prices go up later.

✅ Pros: You know what you’ll pay, great for budgeting
❌ Cons: You might miss out if prices fall

Variable-Rate Contracts

The price can go up or down depending on the market.

✅ Pros: You could save when prices drop
❌ Cons: It can be risky if the market jumps

Rollover or Out-of-Contract Rates

These kick in when your deal ends and you don’t switch. They are usually the most expensive!

✅ Pros: No action needed
❌ Cons: You’ll likely overpay

Always know when your contract ends. Set a reminder at least 60 days before. That gives you time to find a better option.

Step 4: Watch Out for Extra Costs

Suppliers often charge more than just for the power. Read your contract carefully.

Hidden fees can include:

Exit fees if you leave the contract early
Standing charges (daily fees just to be connected)
Meter reading costs
Paper billing fees

Also, some suppliers bundle in VAT differently. Always ask for the total price including all fees and VAT.

For example, if Supplier A offers 14p/kWh with no standing charges, and Supplier B offers 12p/kWh plus a 50p daily fee — the better deal depends on your usage.

Step 5: Use Less Power and Track Your Usage

Saving power helps you cut costs no matter what rate you have.

Try simple steps like:

Turning off equipment at night
Using smart thermostats
Switching to LED lights
Installing motion-sensor lighting
Keeping the heat or air conditioning at smart levels

Also, consider getting a smart meter. It shows real-time usage and helps you spot high-use times.

Here’s a smart example:

🔴 A small office used 27,000 kWh/year. After switching to LED lighting and turning off computers at night, they cut usage by 18%. That saved over £700 just from using less electricity!