So you’ve shopped around for your energy, and found a product that meets your needs. But not all business energy deals are created equal. Here we explain what to look out for, from hidden costs to potential risks.
Non-commodity charges are additional costs that can turn a great business energy deal into a not-so-great one. But what are they?
Business energy costs consist of a unit rate, a standing charge and a non-commodity charge. Put simply, the unit rate is the price per KwH of your actual energy. Your standing charge is an additional daily flat rate, which remains the same regardless of how much energy you use. If you’re signing up to a fixed-rate tariff, your unit rate and standing charge will not change for the duration of your contract.
Non-commodity charges, on the other hand, are additional costs built into your contract, which cover the supplier’s overheads, such as delivering your energy and balancing the grid. These can change during the course of the contract, even if you’re on a fixed-rate tariff.
When you receive a business energy quote, non-commodity charges may not always be made clear upfront. Using a third party consultancy to secure your rates can help you avoid nasty surprises. However, in our experience, even clients who have secured their business energy deal through a consultancy can still fall foul of such hidden costs.
This is why we diligently check that all costs are clearly communicated to our clients before they sign the contract. We have dealt with a number of clients who have had non-commodity charges omitted from their quote, only to be made apparent after they’ve committed to a fixed term.
Tritility clients can rest assured that we will provide a true cost comparison, as only then can you make an informed decision about the suitability of the deal on offer.
So let’s say you’ve identified a couple of business energy deals that meet your needs, with little or no cost difference between them. How do you choose which one to go with?
This is where using a third party can really help. A consultancy can help you to understand which suppliers are most likely to meet your needs, and to identify any value-add services the supplier can offer. If you’re going direct to a supplier, ask them about any additional services, such as smart meters and other hardware.
Our aim, as a consultancy, is to add significant value to any product or service you choose. We provide a bill checking service, ongoing support to manage your energy, tools to help you cut your consumption and reduce your carbon footprint, and much more. For more information on our services, read our comprehensive guide to Business Energy Procurement.
Unlike consumer energy contracts, business energy deals do not come with a cooling off period. This means that once the contract is signed, you can’t withdraw, even if you change your mind. That’s why it’s important to not only get a true picture of the costs, but to weigh up any potential risks.
In the current climate, a key risk factor is whether your supplier is in danger of ceasing to trade. If this happens, you could lose the unit rate you secured when signing up. When advising you on your options, we’ll be able to help you balance the risks against the benefits of any given deal.
Suppliers also assess the risks of taking on customers, which will usually include a credit check. Some consultancies don’t credit check clients before securing quotes, which can lead to a deal falling through at the last minute, leaving you to start the whole process again. We always conduct the necessary checks before obtaining quotes, to prevent a great deal of disappointment and inconvenience later.
If you’re thinking of switching your business energy, we can help you find the right deal for your needs. We’ll ensure you have the full picture before you sign, and will support you at every step for the way, for the duration of your fixed term. Get in touch to find out more.