Electricity Rates

How Small Businesses Can Save on Energy Bills

Learn how small businesses can save on electricity costs by switching providers, comparing plans, and upgrading to energy-efficient solutions.

Last updated

January 14, 2025

Author: Matt from Currents

Learn about energy for your home or business.

Switching electricity providers can save small businesses up to 30% on energy costs while offering access to renewable options and better customer service. Here's how to make the switch:

Review Your Current Plan: Check your contract's end date, rate structure, and any early exit fees.
Understand Energy Usage: Use smart meters or past bills to track consumption patterns.
Compare Providers: Use tools like Tariff.com or ElectricityRates.com to find fixed-rate or renewable energy plans.
Switch Providers: Notify your current provider, provide necessary details to the new one, and avoid service interruptions.
Boost Efficiency: Upgrade to energy-efficient solutions like smart devices or solar panels for further savings.

Quick Comparison of Plan Types

Plan Type	Benefits	Considerations
Traditional Fixed	Predictable costs	No benefit from market price drops
Green Energy Fixed	Supports sustainability, tax perks	Slightly higher starting rates
Solar Integration	Long-term savings, independence	Upfront installation costs
Hybrid Solutions	Flexibility with renewables	Complex billing structure

Switching is simple and usually takes 2-3 weeks. Start by gathering your recent bills and comparing plans to find the best fit for your business.

Step 1: Understand Your Current Electricity Plan

Review Your Current Contract Details

In deregulated markets like Texas, New York, and Massachusetts, businesses can choose their electricity supplier. Start by finding your latest energy bill, which will include your Meter Point Reference Number (MPRN). This unique number connects your business to its energy supply and is necessary for switching providers. Pay attention to these key contract elements:

Contract Element	What to Look For	Why It’s Important
Contract End Date	When your contract ends	Avoid penalties for early termination
Rate Structure	Fixed vs. variable rates	Know your current pricing model
Notice Period	Time required for notification	Prevent automatic contract renewal
Early Exit Fees	Any penalties for leaving	Factor in costs if switching early

Timing matters. If your contract ends in three months, many providers allow you to lock in a new rate up to 60 days beforehand. This gives you a chance to explore and compare offers without feeling rushed. Once you've reviewed your contract, the next step is understanding how your business uses electricity.

Understand Your Energy Usage

Knowing how your business consumes energy will help you pick the right plan. Smart meters provide real-time data, making it easier to spot trends in your energy use. Here's how to get started:

Collect Past Bills: Review the last 12 months of electricity bills to identify seasonal trends.
Monitor Usage Patterns: Track peak and off-peak hours to see where adjustments can be made.

If your business uses electricity at consistent levels, a fixed-rate plan might offer the most predictability. On the other hand, if your usage fluctuates with the seasons, a flexible-rate plan could better match your needs.

Step 2: Compare New Electricity Plans

Use Tools to Compare Providers

Finding better electricity rates is easier than ever thanks to online comparison platforms like Tariff.com and ElectricityRates.com. These tools let you input your business details and energy usage to generate tailored recommendations.

Another option is David Energy's software platform, which not only compares rates but also provides insights into energy efficiency. Their energy advisors can help you navigate complex rate structures and identify savings opportunities. By analyzing your usage data, the platform suggests plans that fit your consumption patterns. If you're considering renewable energy, this is a great time to explore those options for their potential long-term advantages.

Learn About Renewable Energy Plans

Renewable energy plans are now a viable, cost-effective choice for small businesses. Constellation Energy notes that businesses switching to renewable options often enjoy lower costs over time while contributing to a greener planet.

Plan Type	Benefits	Considerations
Traditional Fixed	Predictable monthly costs	May not benefit from market price drops
Green Energy Fixed	Supports sustainability; tax incentives	Slightly higher starting rates
Solar Integration	Long-term savings; energy independence	Upfront installation costs; financing available
Hybrid Solutions	Flexibility with renewable and grid power	Complex billing structure

What to Look for in a New Plan

Once you've narrowed down your options, evaluate the following to find the best fit for your business:

Rate Structure Analysis

Check the base rate per kWh (including peak and off-peak rates) and any monthly fees.
Review early termination policies and minimum usage requirements to avoid surprises.

Contract Flexibility
Fixed-rate contracts typically last 12 to 36 months. While longer contracts may offer lower rates, ensure they allow for business changes, like expansion or downsizing.

Customer Support Quality
Choose providers with dedicated support teams for small businesses. Reliable customer service is crucial during emergencies or billing disputes.

Some providers also include energy management tools in their plans. These tools can help you monitor usage and uncover additional savings throughout your contract.

sbb-itb-9f1b9fb

Step 3: Switch to a New Electricity Provider

Switching electricity providers is an administrative process, so the actual delivery of electricity remains unchanged. Your local utility company will still handle the infrastructure during the transition.

Notify Your Current Provider

Before making the switch, check the terms of your current contract. Most providers require a notice period, typically between 30 and 120 days. Contact your current provider's support team to formally request the change. Make sure you have your account number and the latest bill handy.

Timing matters. The best time to notify your provider is usually during the "switching window", which is between 49 and 30 days before your contract ends. This helps you avoid early termination fees and ensures the transition goes smoothly. Once you've informed your current provider, collect the necessary details to make the onboarding process with your new provider easier.

Work with Your New Provider

Your new electricity provider will need specific information to set up your account:

Information Needed	Where to Find It	Purpose
MPRN	Your electricity bill	Identifies your business location
Recent Usage Data	Last 12 months of bills	Ensures accurate billing
Business Details	Company registration	Confirms account ownership
Bank Information	Banking records	Sets up payment arrangements

Many providers, like British Gas Business and EDF Energy, offer digital onboarding. They often assign account managers to guide small businesses through the process, which can usually be completed within 24-48 hours.

Avoid Power Interruptions During the Switch

Switches in England, Scotland, and Wales are typically completed within 2 working days once the process begins. To ensure everything goes smoothly, schedule the switch date, provide final meter readings to both providers, and keep all confirmation documents.

Worried about billing overlaps? Accurate meter readings can prevent this issue. If you have a smart meter, it can automatically send readings to both providers, making the transition even easier and ensuring correct final and initial bills.

Step 4: Save More with Energy Efficiency Upgrades

After switching to a new electricity provider, you can further cut costs by upgrading to energy-efficient solutions. Modern tech and renewable energy options make it easier than ever to reduce energy use and save money.

Explore Financial Incentives

There are plenty of financial programs designed to help small businesses improve their energy systems. For example, the Enhanced Capital Allowance (ECA) scheme offers tax relief for energy-efficient equipment, while regional initiatives like the Greater London Authority's Cleaner Heat Cashback can cover up to £10,000 for efficient heating systems. Many utility companies also provide rebates for upgrades like LED lighting and HVAC systems.

Some key programs to check out include:

Enhanced Capital Allowance (ECA) scheme
Regional grants
Utility company rebates
Government-supported green business loans

An energy consultant can help you find and apply for these incentives, making the process much smoother.

Use Smart Energy Devices

Smart energy devices give you real-time insights into your energy consumption, helping you cut waste and improve efficiency. Tools like smart meters, thermostats, and energy monitoring systems often pay for themselves within two years, with annual savings ranging from £120 to £900.

For instance, smart thermostats (like the Nest Learning Thermostat) can reduce HVAC energy use by 10-15% by learning and automating your temperature preferences.

While smart devices help you optimize energy use day-to-day, solar power takes it a step further by reducing your dependence on external energy providers.

Consider Solar Power for Long-Term Savings

The Solar Investment Tax Credit (ITC) offers a 30% tax credit on solar system costs through 2024, making solar panels a great option for small businesses. A 10kW solar system can generate 8,000-12,000 kWh annually, potentially cutting energy bills by up to 50% while also earning income through SRECs (Solar Renewable Energy Certificates).

"Energy efficiency is a critical component of a sustainable business strategy. By reducing energy consumption, businesses can lower their costs, improve their bottom line, and contribute to a cleaner environment." - Rachel Kyte, CEO of Sustainable Energy for All

Conclusion: Making the Switch Simple for Small Businesses

Key Takeaways

Switching electricity providers can make a noticeable difference in your business expenses. Start by reviewing your current contract and analyzing your energy usage to pinpoint where you can save. Tools like ElectricityRates.com streamline this process, helping you compare rates and terms that align with your business needs.

The switch usually takes 2-3 weeks, with most providers ensuring a seamless transition without service disruptions. Pricing plans like Time-of-Use (TOU) and Ultra-Low Overnight (ULO) can help reduce costs based on your business's energy habits.

How to Start

To get started, gather your recent electricity bills and note your contract's end date. This ensures you avoid early termination fees and makes the transition smoother. Many energy-switching services handle everything for you - from comparing options to setting up your new plan.

Here’s a quick look at potential savings based on different plans:

Plan Type	Ideal For	Estimated Annual Savings
Time-of-Use (TOU)	Businesses active during off-peak hours	15-25%
Ultra-Low Overnight	Night-focused operations	20-30%
Tiered Pricing	Steady, daily energy usage	10-20%

If you're considering renewable energy, now's a great time. The current 30% tax credit (available through 2024) makes solar power a smart choice for reducing costs while supporting sustainability.

"The key to a successful electricity switch lies in timing and preparation. Businesses that review their options before their contract ends typically secure rates 20-30% lower than those who default to variable rates." - Energy Switching Association, 2024 Market Report