Difference between commercial and residential electric rates
Answers
Fixed price business energy
Traditionally, business energy is taken out on a fixed rate contract, over a period of up to 4 years. The benefits of fixed price contracts include better budgeting - as you know how much you will be paying for energy each month - and protection from market fluctuations. However, if energy prices drop in the middle of your contract, you won't be able to take advantage of the reduced rates. Domestic rates allow for a cooling off period, something that commercial energy contracts do not. With that in mind, you need to be really sure you’re making the right decision when you agree prices for your business. Likewise, terminating a business energy contract tends to be more expensive than ending a domestic energy contract. Energy suppliers know when domestic users will use most of their energy and at which time of the year but it’s much more difficult to predict business energy use. Some energy suppliers will buy energy for business contracts up front at the beginning of the contract, whilst others buy in bulk ahead of a business taking out a contract.