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How to pay your business energy bills

Business energy bills can be expensive, especially if you need a lot of gas or electricity to keep things ticking over. That's why it’s important to make sure you’re getting the most for your money. Switching to a fixed energy deal and cutting your usage are good ways to lower your bills, but did you know that the way you pay your bills can also the amount you pay?

3 min read

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How much should your business energy contract rates cost?

Business energy tariffs are tailored to meet the needs of your business, so no two deals will be the same. To work out how much you should pay, suppliers will take lots of different factors into consideration – such as where your business is, how many people you employ and how much energy you use. Using all this information, suppliers will calculate two costs which you can then use to compare quotes – they are:

  • The unit cost – this is what you pay per unit of gas or electricity you use, measured in kWh (kilowatt hours).
  • The standing charge – this is a daily charge that covers the cost of delivering energy to your premises, it also covers some National Grid maintenance costs.

What are average business gas rates?

Because business gas prices are bespoke and vary by energy provider, it can be hard to compare quotes. But to help you get an idea of what you can expect, here are the average business gas rates:

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

Note: Bill size may vary according to your meter type and business location. Figures don't take into account the Energy Bill Relief Scheme. 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

What are average business electricity rates?

Just like with gas, business electricity costs are based on the nature of your enterprise – to get a rough idea here’s the average you can expect:

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 take into account the Energy Bill Relief Scheme. 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

What business energy contracts are available?

Having the right contract for your business can keep energy costs under control. To help you decide what will suit you, here are the main types of contract on offer:

  • 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.  

Business energy payment methods

There are several ways to pay your energy bill and the method you choose can influence the overall amount you pay and have an impact on your time – options include:

  • Direct debit – this is one of the most popular and convenient ways of paying bills as they’re automated once you set it up. Some suppliers will also offer discounts if you pay this way. There are drawbacks though and if you pay a fixed amount each month you could end up paying more (or less) than you need to. Paying more just means valuable cash is tied up and paying less means you could be hit with a big bill at some point. You should aim to review your direct debit amount every so often to make sure you’re on top of what you owe.
  • BACS – this is another type of electronic payment but instead of a fixed amount (like a direct debit) you can change the amount you pay each month according to your bills. BACS payments give you more control over expenses but it does mean you need to remember to pay the bill in the first place.
  • Debit or credit card – if you decide to pay your bills by card, you’ll usually need to contact your energy supplier directly. Like BACS payments, while you have control over your outgoings, you need to take the time to pay the bill (and remember to do so).
  • Cheque or giro – at the bottom of your bill, you’ll have a slip that lets you pay by cheque or giro. You’ll need to send this slip along with your payment to your supplier by post. Bear in mind that posting your payment can take up to five days so you’ll need to be very organised or run the risk of being fined for late payment.

The choice of business energy payment methods means there’s bound to be an option that suits you depending on the time you have and the control you’d like over your outgoings. If you need more help or advice about business energy contracts and ways to pay, you can phone us on 0800 188 4930 or request a callback.

How much should your business energy contract rates cost?
What are average business gas rates?
What are average business electricity rates?
What business energy contracts are available?
Business energy payment methods

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