9 things to think about when choosing a business energy supplier
When it’s time to choose a business energy supplier, do you focus solely on price? Here are a few other things you should think about.
Here at troo, we know that energy is more than a commodity to be bought like any other. It’s a service – and it’s a critical investment for your business.
After all, you can’t operate without energy, whether you’re in heavy manufacturing or a sole trader with a laptop and a mobile.
Price isn’t the only thing to think about
It’s always tempting to go for the cheapest option, especially when you’re starting out, but there are plenty of other things to think about when you’re choosing your next business energy supplier.
1. Customer service ratings and reviews
Before you invest in a business energy supplier, it’s worth doing some research into what their customers are saying about them online.
You can check out their Net Promoter score, look at their reviews on TrustPilot, and even delve into forums at Which? before making your decision.
When you’re looking at customer reviews, pay attention to the things people say about the customer service teams, the complaints procedure, and even the call menu system. If you ever end up in a dispute with your supplier, all of these things will have an impact on how much time it takes to resolve that dispute.
Your time is money; you don’t want to lose too much of it trying to navigate an unhelpful customer service team.
2. Green energy credentials
Green energy is a high priority for many businesses, particularly if they’re looking to go carbon neutral. You might pursue this for branding reasons – or perhaps it’s even a matter of principle for you.
Whatever your reason for going green, there are a couple of things to keep in mind:
First of all, there’s no way to make sure the energy that powers up your PC every morning comes from solar panels or wind turbines. Energy is like water from a tap – it can come from a range of sources and you never know the difference.
Taking out a green energy tariff is really about supporting the green energy industry. So you need to make sure your energy supplier has a high degree of green energy sources in its supply mix in order to guarantee your money is going supporting that industry.
Secondly, your energy supplier itself has a carbon footprint. How green are they when it comes to their own business operations? Are they certified to ISO standards? Do they comply with ESOS? What is their recycling policy?
Your energy supplier is part of your supply chain. If your suppliers’ green credentials are important to you, don’t forget to look into your energy supplier.
3. Switching ease
One of the principles of energy deregulation was that it allows customers to easily switch between suppliers in order to find the best deal and make savings.
Imagine our surprise to learn that energy switching complaints are now the biggest issue facing energy suppliers!
Even though the energy market has been deregulated for some years, it still isn’t as easy to switch energy supplier as it should be. Look out for complaints about switching when you’re looking at customer reviews and ratings.
If you plan to switch your business energy supplier, make sure you do it in plenty of time to avoid deemed rates. And remember that our troo Guides are always available to help you negotiate navigate the switching process. In fact, they can even complete the process for you! (All part of the troo Assure process.)
4. Energy efficiency help
With the government recently declaring a climate emergency, energy efficiency is only going to become more important. For businesses, ‘going energy efficient’ is often more easily said than done, especially when you’re at the smaller end of SME
Look out for energy suppliers that give you plenty of support and advice on making your business more energy efficient. This could be everything from advice about green tariffs to building insulation and lighting upgrades (top tip: lighting upgrades are actually one of the quickest ways to make energy efficiency savings and see a return on your investment).
Some energy suppliers may even have access to or offer funding for energy efficiency upgrades to your business. If that’s the kind of project you’re keen to kick off in your business, it might be worth paying a slightly higher unit rate if it gives you access to that kind of support.
5. Smart meter support
Smart meters are a really important part of making sure you aren’t over- or under-charged for the energy you use (being under-charged might feel good at first, but your supplier will always recover the costs!).
The problem with smart meters is that they can’t (yet) be transferred between suppliers when you switch to a new contract. So ask how they handle smart meter transfers when you’re thinking about signing up with a new supplier.
6. Deemed rates and out of contract policies
When you miss on your contract renewal date, your business energy supplier will automatically put you on something called ‘deemed rates’. This is the default tariff that all energy suppliers run for customers who have fallen out of contract. They’re usually a lot higher than your contracted rates – we’ve seen deemed rates as much as 80% higher than contract prices.
Deemed rates and out of contract policies are different for every energy supplier. We’ve put together some information on deemed rates for the major suppliers, but you’ll need to do your own research into smaller energy suppliers.
If you’re tempted to dismiss this as unimportant, take a moment and ask yourself how often you’ve forgotten to renew your energy contracts because you were too busy and focused on other things.
Could your business cope with an 80% cost increase across its key overhead?
7. Business performance
We’re not suggesting you sit down and review your energy suppliers’ annual accounts, but at the same time, you don’t want to sign up with an energy supplier you think might be about to go bust.
When energy suppliers go under, their customers are placed on – you guessed it – deemed rates until Ofgem can place them with another energy supplier.
It all means hassle for you and takes your focus away from your business. If you have an employee tasked with managing your energy contracts, it pulls them away from their day to day tasks when they could be doing something more productive.
8. Brexit resilience
We’ve already said that we think Brexit will bring higher energy prices for British businesses(according to some research, Brexit has already added £2bn to the UK’s energy bill).
Some energy suppliers are more exposed to Brexit risks than others. If, for example, your supplier is involved in power generation, they could be hit by higher transportation costs if the UK has to pay tariffs to use the interconnectors that bring gas and electricity from the continent.
It’s reasonable to assume that suppliers with less exposure to the EU’s internal energy market will be able to offer lower or more stable energy prices in the future.
9. Annual price rises
A key thing to think about when you’re choosing a new energy supplier is how often they’ve raised their prices over the past ten years. If they regularly put prices up for their business customers and don’t reward loyalty, are they a supplier you can rely on?
Of course, you can always switch supplier – but as we mention above, it isn’t always easy to switch.
Choosing a business energy supplier is about more than a cheap price
If the above shows anything, it’s that you have a lot more to think about than price when it comes to choosing a new business energy supplier. (And we’ve barely scratched the surface.)
It’s one thing to choose the lowest price available when it comes to your home energy supply. It’s another thing entirely when it comes to your business.
A cheap price means nothing if your energy supplier goes under. A cheap price means nothing if you lose the same amount of money when you’re trapped on the phone for hours trying to resolve a dispute. A cheap price might help you make short-term savings, but if you want to reap the long-term benefits of energy efficiency, you might need to invest and take a short-term hit now.
As with any other business service, it’s about finding the offer that works best for your business and helps you meet your goals.
The lowest price won’t always be the thing that helps you do that.
How do you know what’s best for you?
It’s all about identifying your strategic business priorities and choosing a supplier that helps you achieve them.
But if that all sees overwhelming, don’t worry – that’s where we come in. Our troo Guides are always ready to help businesses find the deal that works best for them.
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