Business Gas and Electricity News

If You Run a Garden Centre, Now is the time to Compare Business Energy Prices

16 May 2017

If You Run a Garden Centre, Now is the time to Compare Business Energy Prices

It doesn't matter what time of year you’re reading this, if you own a garden centre, now is the time to compare business energy prices. After all, energy is a significant cost in most garden centres. This is because of the importance of offering a comfortable and appealing retail environment to your customers, as well as for product displays, back-office functions, and customer facilities like cafes.

What If You’re in a Contract?

It’s still worth having a look at the price of energy periodically even if you’re in a fixed term contract. With online services, including price comparison tools, it’s quick and easy to do.

Why should you do it, though? Agreeing new contracts with energy suppliers is something that most garden centres do once every couple of years – one to three years, generally, depending on how long your fixed deal is for. A lot happens in the market in the period between, however.

While you probably can’t change your energy supplier in the middle of a contract, understanding how the market works, the fluctuations in price, and the energy providers that are available, will help you make a more informed decision when it comes time to renew.

Why is There Such a Difference in Price?

At any one time there are thousands of commercial energy tariffs available in the UK. They can all vary substantially in how much they cost – sometimes by as much as 80 percent or more.

There are a lot of reasons for this difference but one of the main reasons is the way commercial energy suppliers purchase energy on the wholesale market. The way they do this is different to how suppliers purchase energy for the domestic market.

Energy suppliers purchase energy for their domestic customers collectively, usually several months in advance. Business energy suppliers, on the other hand, purchase the energy needed for a specific customer once the contract is agreed. In addition, the supplier will purchase enough energy for the full length of the contract, i.e. if you sign up for three years, most energy suppliers will purchase three years’ worth of energy to cover the contract.

Therefore, the price of energy on the wholesale market at the time you need to get a new contract will influence the price.

Why Is There Such a Difference Between Domestic and Commercial Rates

Energy suppliers usually offer lower tariffs to commercial customers because they use more energy. This applies to a garden centre as much as it does to a high energy use factory, for example.

Another factor you have to consider is VAT. You pay five percent VAT on the energy you use at home but your garden centre has to pay 20 percent VAT. That can represent a substantial difference when doing a comparison.

Is it Easy to Switch Supplier?

If you are at the end of your contract with your current supplier, and you have found a better deal, you should switch. The process is easy and you should see no disruption in your energy supply. Hopefully you will, however, see a reduction in your next energy bills.