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Business Energy for Startups

Starting a new business is exciting but can often be stressful too. Keeping costs at a minimum and budgeting effectively is a sure-fire way to get you through those difficult patches. One of the quickest and easiest methods is to compare your energy tariff and switch to a better deal. A quick business energy price comparison can result in up to 30% savings per year. So, while business energy is not the most thrilling of money-savers, it’s certainly one of the most effective.

Comparing business energy deals is super quick and easy when you use a business energy price comparison service. Our business energy switching team can help to streamline the process and get quick access to the best business energy deals. To ensure they can provide you with accurate information, have a copy of your most recent bill at hand and be ready to pass on the following information:

How to compare business energy deals

  • Your annual energy usage
  • The name of your current tariff and provider
  • The end date of your current tariff
  • Your supply type

If you’re not sure where to find this information on your bill, don’t worry, one of our advisors will be able to help.

What happens when my business energy tariff ends?

The end of your contract is as important as the start. In fact, it’s arguably more so. When a contract ends, energy providers know the last thing you want is a workplace where the lights don’t work, and the heating is off. Instead, they’ll continue to supply you with the energy you require. But, if you haven’t renewed your deal or switched, your provider will put you on either a rollover or deemed rate contract.

Rollover Contract: Not very common nowadays, however, they do still exist with certain energy providers. When no attempt has been made to renew a deal before the end of your contract, you may be signed up to another year at much less competitive rates than normal.

Deemed Rate Contract: Despite being a better alternative to a rollover tariff, it’s still a good idea to avoid these. Again, you’ll pay an inflated rate for your energy consumption, but the redeeming factor is you normally only need to give 28 days’ notice to switch to a better deal.

What types of business energy tariffs are available?

Now you know about the tariffs to stay away from, you’re probably wondering which are worth your time and money. Unfortunately, there’s no standard answer to this question. It’s more a case of what kind of energy service your business requires. At ByteStart, we know that business energy for startups can be quite confusing, so we’ve put together a quick guide on the types of tariff available, and how they can benefit your startup.

Fixed Rate Contract:

Budgeting effectively is key to a startup’s success, and a fixed rate term gives you the most control over how much your business can expect to pay for its next bill. A fixed rate contract doesn’t mean your bill will be the same each month, just that the price you pay per kWh of energy will not change. If you use more energy, you’ll pay more, however, a fixed rate contract allows you to estimate your bill based on your average energy consumption.

Variable Rate Contract:

With a variable rate contract, the price you pay per kWh of energy will fluctuate alongside the market. If the wholesale price of energy goes down, so will your bill. But if it goes up, or demand for energy increases, your bill will increase accordingly. Most start-ups benefit from a more structured approach to budgeting. But, if you think it’s worth the risk, a variable rate could cut your business costs even further.

Flexible Tariff:

Most new business energy contracts run between one and five years. If you need more flexibility, such as the option to switch with 30 days’ notice, consider a flexible tariff.

Is VAT charged on business energy?

Most new business energy plans come with a standard 20% VAT charge. It’s important to be aware of this obligation, especially if your initial quote doesn’t include the tax. However, it’s also important to understand your entitlements. If you use less than 1000kWh of electricity or 4,300 kWh of gas per month, you should be able to drop to the low energy consumption VAT bracket, which is only 5%. What’s more, you could also be exempt from paying the Climate Change Levy (CCL).

What if we run our business from home?

Household energy bills are nearly always more expensive than a business energy tariff, so if you’re running a business from home, there are some considerations to make. Most importantly, you can apply for a new business energy deal if at least 50% of your energy consumption is related to your business.

An easy way to figure this out is to check your meter reading at the start and end of the working day, then do the same for the end of the working day to the start of the next. It’s worth doing this for a week to make sure you are being accurate. If your work-time consumption is higher than off-duty, you should be able to apply for a new business energy deal. But be aware, there’s no option for a dual-fuel contract with new business energy. You’ll have to pay for gas and electricity separately. With business energy deals for gas and electricity, you will still most likely make a saving on your current household policy, whether it’s dual-fuel or not.

If you think you’re being charged too much for your business energy consumption, or you’re about to sign up to your first contract, it’s worth running an energy price comparison.

To find a great deal for your new business electricity and gas prices, call our team of business energy experts today.

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