Cheap business electricity prices - making the right choice

Cheap electricity prices are not always easy to find.

Your electricity rates can come in all different shapes and sizes.  Whilst businesses are happy to switch, they often end up switching to the wrong supplier with an uncompetitive deal, mainly due to a lack of understanding of how their electricity prices and usage make up their total bill.

Here are some quick key facts to help you better understand your bill, and ask the right questions when the next door-to-door salesman comes knocking.

Kilowatt hour (kWh)

Your energy usage is measured in kilowatts.  To come up with the right level of kWh usage on your bill, your supplier will take your last, lower meter reading away from the current meter reading, providing you with a usage amount for that period.  Sometimes, the kWh usage will be converted to MWh (Megawatt hours) - simply, there are 1,000 kWh in a MWh.

Billing period

For a typical small business, using between 20,000 and 160,000 kWh you are likely to be billed quarterly, but you may receive a monthly bill.  For any business using more than 160,000 (160MWh) you will be billed monthly.

Usage breakdown

Most of the time, your usage is not charged back to you at a flat rate.  Suppliers often create tiers of usage, and therefore tiers of pricing.  You may be charged a low $ per kWh for the first 4,000 kWh of usage in a year, and then significantly higher price for the remaining usage. This means that it's not good enough to accept a set of prices, and take the suppliers word that it's cheaper.  Our advice is to always calculate what a typical bill will be with the new prices compared to the old to properly assess how competitive or otherwise the deal is.

Peak vs off-peak

Coupled with the usage breakdown, your kWh charges could also vary depending on the time of day you use the electricity.  Simply put, using electricity at 4pm on a weekday could be much more expensive than 4pm at the weekend, not to mentioned charges being a lot cheaper at 4am in the morning.  Again it's important to do the sums, and properly assess the true value you will get by switching supplier.

Daily charges

You will always have a daily charge for the provision of electricity to your business.  These costs can vary massively between suppliers, especially when some supplier may look to re-coup margin through these charges not typically scrutinised by a business owner.

Discounts

Discounts typically come in two forms:

• Pay on time: paying your bill within 10 days of receipt.
• Contract term discount: by committing to a supplier for 2 or 3 years, you may be offered additional discounts.  In fact, if a supplier wants you to be a 'loyal' customer and give up your freedom to change suppliers for a period of time, we'd always recommend looking for an attractive discount incentive.

Making a decision

Business electricity prices are complex, but with the right help, understanding them can be straightforward, and this will ensure you get the best deal everytime you switch supplier, and receive cheap electricity prices.

Of course, if you don't feel you have enough time to make the right decision, we can help take that pain away.  After a quick look at your bill, and a short 5 minute conversation, we'll make sure you switch to the best supplier for your business's needs.

Our service has no tie-ins, no catches - in fact, it's completely free.