Different types of business energy Contracts
When it comes to your business energy contract it will differ quite a bit from your average household energy contract. Before signing your energy contract, it is best to understand the different contract types to ensure you are getting the best deal for your business.
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Types of contracts
A fixed-rate contract is where you pay a fixed unit rate for your whole contract. The unit rates for fixed contracts will depend on wholesale prices at the time you sign your contract and won’t change until you renew your contract.
On a fixed-rate contract if your monthly energy consumption remains the same then you will always be charged the same amount for your gas and electricity. With certain suppliers, you can sign a fixed-rate contract for up to five years.
Before signing a long-term fixed-rate contract, it is always best to investigate the current energy market to see whether energy prices are low or high. Keep up to date with the most recent and up to date energy news and trends here.
If you sign a variable contract the amount you pay for your energy (the unit rate) will fluctuate each month depending on the wholesale energy market. Whilst this can be beneficial when prices are low, you should take caution before signing this contract type.
You should only sign a variable contract if you are certain that energy prices are going to drop and are going to remain low throughout the duration of the contract. If you sign a variable contract and then prices begin to rise you will be stuck paying higher prices throughout your whole contract.
We would advise speaking to an energy expert before signing. Contact us today here, or chat with one of our live agents on the web chat.
You will usually be put on a rollover contract if you have not agreed on a different contract before your current contract end date and there are no renewal provisions.
The easiest way to avoid this type of contract is to make sure you shop around for a new energy contract as early as possible. A rollover contract will usually have higher rates and will most likely not be the most competitive on the market.
Deemed or Out-of-contract rates
Deemed and out-of-contract rates are usually suppliers’ most expensive rates. This usually applies when you move into new business premises without agreeing to an energy contract before the move.
Some suppliers will also put your business on these rates if your current energy contract ends but they continue supplying energy that you use.
Again, the best way to avoid paying higher prices is to shop around before your current contract comes to an end or before you move buildings.
Compare business energy contracts
Before deciding what type of contract your business is going to choose in terms of energy, you should be comparing contracts and prices beforehand.
The best way to compare lots of suppliers at once would be with a comparison site. At Online Energy you can compare contracts from some of the UK’s best business energy suppliers. Compare today and see how much you could save.