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Business energy contract types

As a business owner, it’s important to cut your monthly overheads whenever and wherever possible. One simple way of doing this is to cut the amount you pay for your business energy. But is a fixed or variable rate deal best for your business? And what are deemed and out-of-contract rates? Here's all you need to know.

2 min read

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What business energy contracts are available?

If you’ve already searched for business energy contracts, you’ll know there are a range of contract types available to choose from. The two contracts you have probably heard about most are fixed-term contracts and flexible-term contracts.

  • Fixed tariff - A fixed business electricity tariff allows you to pre-agree unit rates with your supplier and pay these rates throughout the duration of the contract. These rates are usually competitive, but you should always run a business electricity comparison before agreeing to any deal. This is the only way to make sure you can’t get better rates elsewhere.
  • Out-of-contract rates - If you let a fixed deal expire without arranging a new one, your supplier will place you on its out-of-contract rates. These are often more expensive than the rates you're offered on a fixed tariff, but you can switch at any time by giving just 28-days’ notice.
  • Deemed rate tariff - Deemed rates are similar to out-of-contract rates, but are used by suppliers when a business moves into new premises without signing a new contract. These are more expensive than fixed rates, but you can switch by giving 28-days’ notice.
  • Rolling Contract - A rolling contract ties you into a new, year-long contract at higher rates. You can sometimes negotiate a new contract on blend and extend terms, which allows you to agree to lower rates by signing up for a new long-term contract with your current supplier. These new rates are usually not as competitive as others you could find elsewhere on the market. Rolling contracts aren’t as common as they used to be, but you should always check the terms of any contract you sign and keep an eye on its end date.  

To switch your business on to a better energy contract, give our switching team a call on 0800 188 4930, or leave a few details at the top of this page, and we’ll give you a call back.

What affects business energy contract rates?

When looking for business energy contracts, you’ll notice variations in the rates being offered. These differences are due to a number of reasons, some of which will be applicable to your business.

To ensure you get an accurate quote, you’ll need to give a little information regarding your business energy usage, as well as its size and location. Using this information, the energy supplier will then be able to provide you with accurate business energy contact rates for the energy you use.

When calculating your rates, the energy supplier will look at various factors, including how much energy you require and the main times of the day/night you take energy from the network.

Then there are the external factors that affect the rates you're offered. A rise in wholesale prices (the amount suppliers pay to generators for the energy they supply to your business) has been a big factor in the soaring energy costs we've all been hit with across 2022. These prices are affected by things largely out of our control, such as supply and demand and instability in areas that produce energy (the war in Ukraine being the latest example).    

Average business electricity contract rates

The two biggest influencers on the price you pay are the unit cost and standing charge. The unit cost is the amount you pay, per kWh, for the energy you use, while the standing charge is the daily fee you pay to have the energy delivered and remain connected to the grid.

These factors make working out an average price difficult. But to help you get a rough idea of what you could pay for your business electricity needs, here are the average electricity rates for businesses of all sizes.

Business sizeAnnual usagePrice per kWhStanding chargeAvg. annual cost
Micro business5,000 - 15,00083.3p35.9p £8,461
Small business15,000 - 25,00082.8p39.5p £16,704
Medium business25,000 - 50,00080.1p35.0p £32,168
Large business50,000 +78.2p 32.7p £43,129

Note: Bill size may vary according to your meter type and business location. Figures don't include the Energy Bill Relied Scheme discount. Current market volatility may also mean that the prices you’re quoted are different from the averages shown. Figures shown are the average unit rates and standing charges quoted by Bionic per business size from September 1 to September 9, 2022


Average business gas contact rates

As with electricity contract rates, average business gas contract rates are difficult to calculate. This is because they are dependent upon a number of factors, again including the size of your business, its location and, of course, how much gas you need and when you use it.

Here is a rough outline of how much you should be paying for your business’s gas needs, whether your venture is classed as a microbusiness, SME, or large business.

Business sizeAnnual usagePrice per kWhStanding chargeAvg. annual cost
Micro business5,000 - 15,00030.2p32.3p£3,138
Small business15,000 - 30,00030.2p40.0p£6,941
Medium business30,000 - 65,00028.0p41.9p£13,453
Large business65,000 +29.6p123.9p £19,692

Note: Bill size may vary according to your meter type and business location. Figures don't include the Energy Bill Relied Scheme discount. Current market volatility may also mean that the prices you’re quoted are different from the averages shown. Figures shown are the average unit rates and standing charges quoted by Bionic per business size from September 1 to September 9, 2022

How to get the best business energy contract rates

To help you get the best business energy contract rates, USwitch for Business will make the entire process as smooth and straightforward as possible. Eliminating the need to spend lots of time locating and comparing different deals, we’ll will compile a list of the most suitable, best value energy deals for your business.

If your business is within its energy deal renewal window, you are perfectly placed to find a great new deal and begin saving on your energy bills.

To compare quotes and switch to a better business energy deal, give our commercial energy team a call on 0800 188 4930.

What business energy contracts are available?
What affects business energy contract rates?
Average business electricity contract rates
Average business gas contact rates
How to get the best business energy contract rates

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