Why Should Your Business Use Business Energy?

Why do businesses not use domestic energy? Domestic energy is the energy used in the household. You need this type of power supply to your homes for cooking, heating, and power appliances and devices.

The same goes for businesses that need electricity and gas to operate their equipment.

Domestic and business energy are sourced and generated in the same way. Despite this, they are sold, and the contracts come in various terms.

When finding the right supplier of your business energy you can visit comparison sites as https://businessenergycomparison.com/. You can see quotes and types of business suppliers. So, what are the differences, and why should organizations use business energy?

Keep reading to find out.

Utility Company vs Energy Supplier

To know more about business energy, you need to know where energy is being sourced. There are two sources of energy: renewable and non-renewable energy.

If you have heard of wind, moving water (hydroelectric), and sunlight, these will be your renewable forms of energy sources. Non-renewable energy sources are fossil fuels and nuclear fuels.

Utility companies sell and deliver natural gas or electricity to your household. They take energy from an energy supplier and send it to your home through the power lines and gas lines they maintain.

Energy suppliers provide the energy that you and the utility companies rely on. Different energy suppliers produce energy in different ways, using natural gas, nuclear, coal, hydropower, solar, and wind power.

Because of the deregulation of the energy supply, you can choose your energy supplier, and you will still receive your power and gas through the utility company.

It allows consumers to select an energy supplier based on factors that are important to them.

Difference between Business Energy and Domestic Energy

Business energy is the gas and electricity companies use. It operates the same as domestic energy. The difference between the two is something to take note of.

Business energy is less expensive because it is purchased in large quantities. This is also sold monthly, and commercial suppliers purchase enough energy to cover the length of your contract.

This may result in a lower unit rate for you but also makes it more difficult to stop your tariff early.

The contracts for business energy are longer compared to household deals. These contracts are signed for an agreed term of up to five years.

You will only be allowed to shop for a new deal once your existing deal enters a “renewal window, ” and it doesn’t have a cooling-off period. With domestic energy, you can switch energy suppliers, which takes 17 days to complete.

About half of those days (14 to 15) are devoted to a cooling-off period. The cooling-off period means you are free to cancel without incurring any penalty.

Compared to domestic energy, business energy is only single-fuel, meaning you will need separate quotes for your gas and electricity. Domestic energy is dual fuel, where the same supplier provides both gas and electricity to save you money for your household bills.

You can pick various tariffs when switching domestic energy providers to get the least expensive one available. Business energy contracts operate in different ways.

Suppliers conduct a case-by-case analysis of each business’ needs before providing a tailored quote that fits your company. While you can be confident that the deal you get is a good fit for your company, comparing quotations can take time and effort.

You have to contact each supplier separately, but using a broker to compare rates reduces the number of calls you need to make and guarantees you’re getting the best deal.

Types of Business Energy Contracts

There are many types of energy contracts to choose from. If you ever have to look at energy contracts, then it’s wise for you to learn the basics of what they are and how they work.

Whatever type of energy contract you need, you will need to ensure that it fits in with your business. Here are some of the main types of energy contracts.


Fixed-term contracts are charged at a set rate for the duration of your agreement, which means you have agreed on the rates you’ll pay for a set amount of time.

It provides certainty as your rates are known and secure regardless of what happens within the market while you are contracted. The rates you pay are fixed for a set periosd. The deal you would sign would also depend on how much energy you use, and the price may vary.

This is the most popular energy contract for businesses, lasting between one and four years. It helps with budgeting and is an effective way to protect against price hikes.

Flexible rates

It is wise for larger businesses to buy bulk energy in advance. This way, you know how much you have paid when it comes to using it.

Flexible deals help you minimize the risk of buying multiple years’ worth of energy.

The advantage of buying wholesale rates months or years ahead will be at a low cost, and it can save you money in the long term. But this can be a risky strategy if you are caught out of the contract when energy prices are high.

Deemed rates

Deemed rates apply to businesses that have recently relocated and have yet to sign an energy contract with a provider legally. You will be put on one of these rolling, out-of-contract tariffs and pay your supplier’s most expensive rates if you allow your existing tariff to expire without switching suppliers or making other arrangements.


Rollover contracts automatically renew at the end of the term, and this is used when an alternative has yet to be agreed upon before your current contract ends.

This could mean paying a higher rate than you were on before. You can manually cancel the deal with a 30-day notice when you are not locked into a contract.

Experts advise businesses with rollover contracts to shop around to see if a better offer is available.

Key Takeaways

Business energy is necessary for your business to function, and it’s a vital part of your day-to-day operations.

It is important to ensure that you have the right energy source for your business. Knowing the different types of contracts can help you save money by having the best deal that works for you.

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