Should You Switch to a Fixed Rate Tariff for Business Energy?
Following Ofgem’s mounting pressure on the ‘Big Six’ to reduce their business energy costs in line with falling wholesale prices, we’ve seen some big announcements being made within the last few months. E.ON and British Gas announced cuts of 5.1 percent, while SSE, Scottish Power, Npower, and EDF have all made similar cuts of around 5 percent. While this isn’t exactly in line with the reductions in wholesale prices – around 30 percent for business electricity and a higher 57 percent for business gas – it does spell good news for UK companies who are becoming increasingly concerned about business energy costs.
But it’s not all sunshine and roses, and Ofgem are advising companies not to get too excited about these drops in business energy costs just yet. While these reductions can bring savings, businesses are still able to reduce their business energy costs further by switching to a fixed rate tariff from a standard tariff.
‘These price cuts are a movement in the right direction for loyal customers, but they are dwarfed by the savings available by switching from a standard tariff to a fixed deal. You could save more money, up to £300, by switching’, says Rachel Fletcher, Partner at Ofgem’s Consumers and Competition division.
About Fixed Rate Energy Plans
- Business energy costs remain consistent and stable, regardless of rate increases by provider.
- Provides financial protection for your business should suppliers raise costs in the future.
- Choice of contract lengths to suit your business needs, usually up to 4 years.
- A number of options at the end of the contract, including switching to variable tariff.
Fixed rate energy plans often provide the most cost effective business energy costs and are often the preferred choice over the more costly standard tariffs. They’re ideal for established businesses who have experience of how their business energy needs have evolved, and who can reasonably anticipate how their needs may change in the future. New businesses may wish to delay switching to a fixed price tariff until they are sure that a specific plan will continue to meet their needs for the duration of the contract.
Switching to a Fixed Rate Tariff
If your business is looking to reduce business energy costs further, then switching to a fixed rate tariff may be the perfect solution. Today, most business energy providers offer fixed rate tariffs for their customers. Check out the options available to you, and compare business energy costs, using the simple online price comparison tool at compareyourbusinesscosts.com.