Over the last few years, we have seen a global pandemic, worldwide energy shortages, conflicts between nations and a rising cost of living here in the UK.
This has led to many businesses restructuring their operations over the last few years to lessen the impact of these external factors.
All this chaos has led to many business owners questioning if commercial energy is cheaper than domestic energy – the simple answer is yes and no, it’s all dependent on the wholesale market at the time you sign your contract.
As we’ve previously discussed, if your contract has ended or you have entered your renewal window, we always recommend that you compare deals to make the best possible savings.
Now let’s dive into the important questions: How does business and domestic energy differ, is one cheaper, and why?
So, is Business Energy Cheaper Than Domestic?
When looking at a business energy bill, it’s easy to assume that business energy is more expensive than domestic energy.
However, when you actually look into the rates, it tells a different story.
Business energy bills give the illusion that business energy is more expensive as businesses tend to have higher usages than domestic property. The actual rates per kWh and standing charge per day are usually lower for businesses than domestic ones.
Business Energy vs Domestic Energy: What’s the Difference?
When looking for a business energy contract, you must know what business energy & domestic energy are and how they differ. You will also need to know what you are looking for in your next supplier and tariff.
What is Business Energy?
Business energy is a term that is used to describe electricity or gas supply to a property that is not domestic. This includes the following: Schools, hospitals, charities, churches, office spaces, manufacturers, warehouses etc.
However recent changes in work behaviours means many people now work from home on a regular basis, this has blurred the lines between domestic and commercial properties. The assumption is that homes use a domestic energy contract even if you are working from a home office, however if you are set on having a business energy contract, a supplier will typically require that over 50% of the overall usage at the property is used for commercial purposes.
However this is not clear cut, so Ofgem, the UKs energy regulator, published a detailed guidance document for suppliers that can be found here.
What is Domestic Energy?
Domestic energy is a term used to describe an energy contract that is specifically for a private dwelling solely used for domestic purposes. This can be a flat, house, bungalow or any premise used for permanent residence.
A domestic energy contract is between the energy supplier and the person living at the premises (In most cases if renting this may be your landlord, please check accordingly).
Key Differences
Some of the key differences when it comes to business energy compared to a domestic energy contract are:
Product offering: there are a variety of products available to businesses, which have all been designed to cater for specific business needs. For example, if you have a business premises that is vacant for the majority of the year, a no standing charge deal may suit you best.
No Cooling off period: As previously stated, you need to know what you want from your next energy contract and this is even more essential when you consider the fact that unlike a domestic energy contract, business energy contracts do not have a 2-week cooling off period, meaning that once you signed your tied into the contract.
You may be thinking that’s fine I can cancel my contract but business energy contracts, in most instances, do not have a get out clause unlike with domestic contracts where you can usually terminate a contract by paying a ‘penalty or exit fee’.
Switching suppliers: When looking at switching providers, again business energy is unique, in the sense that you cannot switch until you reach your renewal window (12 months prior to your contract end date). Please be aware that even if you decide to switch during this window the new contract and rates will not come into effect until after the original contract has ended.
Longer contracts: In most instances businesses take out longer contracts than domestic energy users, often between 3 and 5 years. This is done as the price given is better as the energy supplier can bulk buy the energy supply at a lower rate. However this does limit businesses opportunities to reap the benefits of regular switching to a better deal.
No dual fuel contracts: Energy suppliers as a whole do not offer dual fuel contracts, including Dyce Energy. Most companies will have separate gas and electricity contracts that can become a burden when having different end dates and making the process more time consuming.
Cheaper energy: As previously discussed the overall bill amount will most likely be higher on a business energy contract due to usage, however when looking at unit rates and standing charge per day these are usually cheaper than domestic energy.
How to Switch Energy Providers
You can enquire with Dyce energy about switching energy providers in less than 5 minutes. You just need to head to our website, click get a quote and complete the form, it’s as simple as that.
Once this has been received one of our sales advisors will be in touch regarding a personalised quote for your business.
Find out more about the Dyce Energy switching journey here.
Why Choose Dyce Energy for Your Business Energy Needs?
Dyce Energy is a UK based energy supplier catering to businesses of all sizes across the country. We aim to provide simple cost effective energy tariffs and exceptional customer service.
Unlike most suppliers our whole team is based at our HQ in South Yorkshire ensuring a streamlined process for any queries you have, with a dedicated customer service team in house so say goodbye to long hold times and call centre representatives that don’t understand energy.
But that’s not all, by signing up with Dyce Energy you also get access to our bespoke customer portal that allows you to track your usage, check your bills, submit metre reads, ask any questions you have and we will also drop any changes in service into this platform.
So if you are ready to switch today, get in touch with our team here.
