Business electricity deals are typically more affordable than those offered to households. However, businesses typically consume more electricity than households and are subject to a number of levies. Contracts for business electricity are often tailored to specific requirements and can vary significantly depending on the size of the company, its usage, and its credit profile. Bespoke quotes can help you compare tariffs and make the best choice for your business.
Variable-rate tariffs offer flexibility
A variable-rate business electricity tariff offers a number of advantages. First of all, a variable-rate tariff does not lock you into a contract for a fixed period of time. This means that your price can go up or down based on market fluctuations. That means you can plan for changes in price and avoid being stuck in an agreement for more than a year. Secondly, a variable-rate tariff can often be cheaper than a fixed-rate plan.
Lastly, a variable-rate plan is better for businesses that experience frequent price fluctuations. The prices of electricity fluctuate on a daily or hourly basis and depend on several factors, including weather, market demand, and fuel costs. Since the cost of electricity changes on a daily basis, a variable-rate plan requires you to take into account these fluctuations in price.
Fixed-rate tariffs are more expensive
Business electricity providers usually offer two types of tariffs: variable and fixed. A variable tariff is different from a fixed one in that the unit cost will fluctuate with the wholesale price. It can be cheaper than a fixed rate, but it can also be more expensive, as the bill will increase dramatically during energy price spikes.
A fixed-rate tariff for business electricity is more expensive than a variable rate tariff. The rate is based on kilowatt-hour usage, and may not include network costs. You will also pay a daily standing charge, which is the cost the supplier charges you for the supply of energy each day.
Taxation of business electricity
A business must pay taxes on the sales of electricity or gas to its customers. These taxes are referred to as sales taxes. The general rule is that the taxable charge will be rounded up to the nearest tenth of a cent. There are various ways in which business owners can avoid paying these taxes.
Electric corporations must register as taxpayers with the Department of Revenue. This means that they must pay the appropriate taxes directly to the Department. These tax amounts are based on the price of electricity and kilowatt-hours used during a calendar month.
Flexible contracts can be risky
While flexible contracts are attractive to businesses, they can be risky. Business owners should take into account the risks before entering into a contract. A fixed contract is more reliable and predictable. A flexible contract may not suit a particular business, but it may be a good option for larger businesses.
Flexible contracts often require expert input, and billing validation can be difficult without external support. Businesses should assess their own ability to do this, and whether they need outside assistance in the process. While fixed contracts help businesses lock in low prices, flexibility allows them to buy energy as prices fall. If businesses don’t have the resources or expertise to check for billing errors, flexible contracts are not appropriate for them.
Fixed contracts are the most common type of business energy contract, and they usually last a fixed amount of time at a fixed price. However, flexible energy contracts have more flexibility and are often a good option for larger businesses. However, they can be risky, and the right partner can help you navigate the process.
Switching suppliers can save you money
It may be tempting to stay with your existing supplier, but this is not always the best solution. A new energy supplier will offer better rates, and switching to them could save you money in the long run. Before making a change, it is important to contact your current energy supplier and inform them of your plan. If your contract is fixed for a long period of time, the supplier will have to provide you with the option of switching after this time. However, you should keep in mind that switching can be a time-consuming process.
The best times to switch energy suppliers are in spring and fall, when moderate temperatures reduce the demand for cooling and heating. This decreases the scarcity of energy, which makes energy suppliers more competitive. You can visit the websites of each energy provider and request quotes.