Choosing the right business energy tariff can come with a few complications. If you are new to the practice of comparing deals from different providers, some jargon may be difficult to comprehend. It helps to have a guide to choosing the right energy tariff for your company.
What is a fixed energy tariff?
In simple terms, a fixed energy tariff means you are paying the same price regardless of what happens to wholesale energy prices. For some companies, a fixed energy tariff makes the most sense, especially if you have a fixed budget for utilities and wouldn’t want unexpected increases in energy prices. A fixed tariff protects you from the volatility of the energy market and is a stable solution for many enterprises.
Overall, a fixed energy tariff is risk-free and works well for financial planning and forecasting. Nonetheless, a fixed tariff means you may miss out on cheaper energy prices when market prices suddenly fluctuate. To help you find the best rates, energy comparison websites like Utility Bidder allow companies to compare rates for fixed tariffs from different energy suppliers.
What is a variable energy tariff?
A variable energy tariff is one that fluctuates, following energy prices in the wholesale market. The primary advantage of a variable tariff is the possibility of enjoying significant savings when unit prices are low. On the other hand, if the prices do increase, you will end up paying more.
Choosing a variable tariff is risky and would require knowledge of the factors that would possibly impact the energy market. You also need to carefully study the market trend and be able to make predictions accordingly so that you can decide if a variable tariff is the best choice for your company.
What is a flexible energy tariff?
This option is typically only available to larger companies with several locations or branches across the country. This type of business tariff is more complicated since it entails buying energy from the wholesale market in small amounts throughout the contract duration.
With this type of business tariff, the supplier will provide the guidance you need on the best time to make wholesale purchases. The supplier may provide the company with an account manager and other tools for hassle-free operation.
Similar to a variable energy tariff, the main disadvantage of a flexible energy tariff is the uncertainty concerning the prices you pay for energy. But the main benefit of choosing this type of tariff is the ability to purchase only when the market prices are favourable.
What is a green energy tariff?
A green energy tariff means you are choosing a supplier that offers a mix of renewable and non-renewable fuel sources. Many companies are taking this route to attain sustainability and to take pride in knowing that they are helping support green energy which is better for the environment.
Another advantage of a green energy tariff is the possibility of renewable energy to become cheaper over time in comparison with non-renewable energy sources.