Owing to different factors, the price of business electricity can vary greatly. However, you have the power to reduce your bills by acknowledging the amount you pay on the standing charges and price per kWh.
Standing Charges
The cost of having the electric supply is the standing charges. The rate you pay to your supplier for accessing electricity does not change, no matter how much electricity you use.
The standing charge is the total of the cost of electricity supply, meter readings, and maintenance. You are charged standing charges in pence daily.
Why there is a great variation in standing charges?
The standing charges depend on the amount of electricity you use. If you find yourself paying a low standing charge, then it means you are paying more per kWh of electricity and vice versa.
How helpful is zero / no-standing charge contracts?
The zero and no-standing charges are like synonyms of each other, meaning you are not charging anything for having the electricity delivered to you. You only pay for the amount of electricity you use i.e., kWh.
The zero or non-standing charge contracts can be found with some suppliers. However, it won’t be of much use to you if your business’s electricity usage is low.
Price per Kilowatt Hour (kWh)
A kWh is used to measure energy. The kWh is commonly referred to as unit rate, and it fluctuates depending on the amount of electricity you use.
Also, the price of a kWh will vary depending on the amount your supplier wants to charge. This can range anything between 10p to 30p.
Why is there a great variation in kWh (unit)?
The suppliers will charge you different rates based on the location of your business. The reason for this would be the location of the power plant, demand, and the availability of energy infrastructure in that area.
Our Research Depiction
Our company Committed Utility Solution (CUS), recently interviewed seventeen businesses to showcase the difference between standing charges and the kWh charges of different firms with an average consumption of 34,438 kWh of electricity per annum.
The standing charges varied from 21p to 33p a day, making a remarkable difference of 12p per day. We found the best business energy rate should be 26.61p, which was quite high, showcasing the need for the businesses to look around for a better deal.
We noted the lowest kWh at 11.49p, while the highest was 15.45p per unit, which made a difference of 2.96p per unit. The average kWh worked out at 13.42 per unit. Based on these figures and stats, we found that an average business pays £4,716 per annum, but they can pay as much as £5,441 or an amount lower than £4,033. When the figures are compared, you can see the potential savings that can be made.
What did we found?
It is evident that its standing charges don’t vary much. However, on a general note, the businesses using the most kWh had the best business electricity rates.
Key Takeaways
The most exciting and encouraging thing about interviewing the 17 business firms were finding out the annual prices they had managed to obtain from the suppliers. In most of the cases, the renewal quote was higher than the amount they were currently paying. This showed that all business firms could save money on electricity bills.