Switching suppliers is not as easy as it sounds. You can get on with your life while your new energy company gets the paperwork sorted out, but there are some important things you need to check before signing anything. This guide won’t focus on price comparison or switching strategies. Instead, we’ll concentrate on why you should switch suppliers and what things to check when looking for a better deal.
Selecting the Best Energy Supplier for Business
Unbundling of Energy Services
Unbundling means that generation, supply, and retail companies have split up their operations into separate companies. This means that while First Utility supplies electricity to your business, they don’t own any power plants or generate energy themselves. Instead, they buy this wholesale from the market at lower prices than they sell it. In the past, Best Energy Supplier for Business used to be vertically integrated, and they did everything from generating power plants to supplying their customers. This has been changed over the past decade because it was discovered that this sort of monopoly on services caused prices to go up while at the same time limiting choice for consumers.
Energy Prices: Rising or Falling?
The prices have been going up and down like a roller coaster with unpredictable movements, making them impossible to predict. While we can’t guide when future price rises might happen, we can show you what factors influence wholesale and retail prices. For example, when you buy gas or electricity from your supplier at a fixed price, only part of that is generated by consuming energy, with the rest paid for by the supplier to have that energy available when you need it.
Rising wholesale prices will mean higher costs for suppliers who pass these onto their customers. That’s why big businesses with large budgets can take advantage of fixed-price contracts where they agree on a fixed price with their supplier for some time (usually one year). This protects them from price volatility and gives them more certainty over their running costs.
Small businesses are less likely to be offered fixed-price contracts, as the supplier doesn’t want to be locked into a high price if the wholesale market falls. In these cases, you need to be more switched on about prices and track energy prices regularly so that you can switch suppliers quickly when rates start to rise.
The good news is that wholesale prices have been falling in recent months, meaning that your business could save money by switching suppliers now. You can see how much you could save using our energy price comparison tool, updated every month.
In conclusion, how much you pay for your energy is influenced by many factors, but ultimately it all comes down to how good a negotiator you are. Big businesses negotiate fixed-price contracts very attractively with their suppliers, while small businesses tend to get charged more per unit on flexible prices due to less negotiating power.