Why You Should Always Compare Business Electricity Tariffs
It is easy to switch the electricity rates of your business without sacrificing quality. There are two options available: fixed or flexible rates. Many businesses opt for a fixed rate because it safeguards them from price increases and allows them to budget monthly.
Fixed-rate tariff as opposed to. variable-rate tariff
There are a variety of factors to take into consideration when you are considering business energy prices. A fixed-rate tariff allows your company to purchase energy on a consistent basis and you can take advantage of cheaper wholesale rates, but an adjustable rate leaves you more open to market fluctuations. Variable-rate tariffs are based upon your usage of unit rates, as well as other charges.
Variable-rate tariffs allow the price of the unit to fluctuate according to the wholesale market. It may be less expensive at times, but it could also be more expensive at other times. If the price of energy increases your unit cost could increase dramatically.
Low-cost business electricity rates per kWh are feasible by using index rate plans
Indexed rate plans provide low business electricity costs per Kilowatt (kWh) by connecting the energy price to an index. These plans are similar to variable rate plans, but they are linked to an index that is publicly available. When the index increases, the monthly rate will go up and if it falls the rate will decrease.
An indexed rate plan is linked to a publicly available index which can change monthly. The index is usually the closing price of a natural gas futures contract. compare business electricity can inquire with the provider how they calculate the index, and if the plan will notify them when it changes. The amount of power used during a billing cycle is measured in Kilowatt-hours and the rate will be based on that amount.
Benefits of switching to the lowest tariff
To ensure that you pay the lowest monthly expenses selecting the lowest cost for business electricity is one of the most crucial things you can do. The prices for business electricity can differ dramatically based on the size of your company. Smaller businesses generally have less power requirements than larger enterprises and therefore, suppliers charge them more per unit. The amount you pay for the stand-alone charge can also fluctuate. Larger companies, on the other side, have a higher demand for energy and have to look for tariffs for energy that are affordable. Many large companies use brokers to negotiate a lower rate.
Businesses prefer a fixed-rate tariff for electricity, which permits them to budget for their expenses. Businesses can still benefit by switching to a variable rate tariff. The variable rate contract allows businesses to make changes without penalty, so switching to a lower-cost tariff is a feasible option. A green energy tariff is an option for businesses that would like to switch to a lower rate. Green energy tariffs can help companies reduce their carbon footprint and also support their Corporate Social Responsibility initiatives.
The cost of electricity for business depends on a number of factors such as your location and the amount of usage. Prices are determined by the wholesale energy market and you’ll typically get lower unit rates if purchase your electricity in bulk. Businesses are subject to a higher rate of VAT than domestic customers, generally 20%. In some cases they may also be required to pay a Climate Change Levy. EDF Energy offers a helpful guide to help you understand CCL and VAT.
If you meet a certain set of criteria you could be eligible to claim back VAT on energy costs If your business is the sole proprietor of a business. To be eligible, you must use less than 60 percent of your energy consumption for business purposes. If you’re a registered charity and you’re a registered charity, you can claim back 20 percent of your energy expenditure.
Climate change Levy
When comparing your business’s electricity bill it is important to include the Climate Change Levy (CCL) as part of the charges. This tax is required by all businesses to be paid in order to protect the environment and reduce their energy costs. The amount of this tax will be added to your company’s cost and will be determined by your energy providers. They will then pass these costs to HM Revenue & Customs. The CCL rates are set at the beginning of each financial year. They are subject to change at the end of the year.
It is important to remember that the CCL rate will increase in line with inflation when you compare electricity prices for businesses. It’s also important to remember that you must take into account the Carbon Price Support rate if you want to qualify for the reduced rate. Utility Saving Expert is a free online tool that allows you to compare rates. These tools are instant and are fully accredited by Ofgem and you can rest assured that the results you receive are fair. You can use these results to determine which business electricity plan is the best fit for your needs.