Small Business Electricity Prices

THE PROS AND CONS OF
ZERO STANDING CHARGE
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If you’ve ever wondered about the possibility of getting business energy
tari s with zero standing charge (and if it’s a good idea to do so), then you
might deem this article worthy of your curiosity.
There are only a few business energy suppliers in the UK that o er zero
standing charge for their business electricity and gas tari such as Ebico,
Npower, and Utilita.
Before we get into this topic a wee bit further however, we’d like to give you a
brief refresher on the de nition and purpose of a daily standing charge.
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“What even is a standing charge and how does it a ect my monthly bill?”,
some of you might have asked this exact same question at some point in
your lives; that is completely understandable.
A standing charge is a xed amount that consumers will be required to pay to
cover energy supplier expenses and services such as, well, consistently
supplying you with the energy you need all while keeping that supply intact
during the entirety of your contract term.
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The amount of energy you consume is not necessarily included in this rate —
that means even if you end up not consuming any energy at all (let’s say you
own a vacation home, your o ce building is currently closed for the holidays,
or you pretty much just run a seasonal business) you will still have to pay a
standing charge.
Standing charges are priced on the daily. No, you do not have to pay the
standing charge each day per se. Instead, it will be included in your monthly
bill alongside your current Unit Rate.
Standing charges vary depending on the type of business energy contract
you’re on.
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Some suppliers charge di erently: from a higher unit rate to a low standing
charge or vice versa. It will all di er from one supplier to the other.
Businesses on Fixed Energy Contracts are normally charged with a xed rate
of pence per day or pounds per month, depending on their supplier.
Standing charges (as well as Unit Rates) might uctuate based on a number
of di erent factors for businesses on Fixed Energy Contracts. Some suppliers
tend to alter the fee on a per-meter basis as opposed to Fixed Energy
Contracts.
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Although suppliers prefer imposing standing charges as it gives them a
certain sense of security that they will still be able to earn money whether or
not you consume energy, may it be electricity or gas.
Standing charges (for businesses) typically range from 15p, 25p, 28p, 130p,
160p per day for either gas or electricity.
Now that we’ve fully grasped the sole purpose of standing charges, let’s dig in
a little deeper and nd out whether or not your business will bene t from a
no standing charge tari . Below we’ve explained the advantages and
disadvantages of a no/zero standing charge tari :
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The Pros
Businesses that run or operate occasionally or seasonally (i.e during the
holidays, summer, or maybe even only on weekends) will surely bene t from
a zero standing charge tari . This is mainly because they will only pay for the
energy they actually use—that’s it.
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Same thing applies for homeowners. If you own a vacation house, you won’t
really be charged anything if you’ve been away for a prolonged period of time.
Another advantage of a no standing charge tari is that most suppliers often
reduce their unit rates/costs based on an ample amount of electricity and gas
your business has consumed.
This is exceptionally bene cial for businesses with multiple branches or
premises that are all on one business energy meter.
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The Cons
Unfortunately, zero standing charge tari s won’t always be the key to cutting
down business energy costs. They have their disadvantages too—especially
for businesses that generally have a medium to high energy consumption.
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Suppliers often hike up their unit rates for every kWh of electricity and gas
you consume, which might actually lead customers on a “no standing charge
contract” to pay a bit more on a monthly basis.
There’s no denying the fact that your business will be able to save money
when it is not operational, but the amount you might be charged with once
it’s open can be quite overwhelming, especially in the long term.
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Should I get a no standing charge energy tari ? Will it
bene t my business?
If your business is energy-intensive and operates all the year round, then
switching to a Zero Standing Charge tari is a big no-no.
While the idea might sound cheaper in your head, no standing charge tari s
don’t really pair well with immense energy consumption.
In fact, you might end up paying more for your energy than businesses
paying daily standing fees.
Like we mentioned above, unit rates tend to be quite higher for no standing
charge tari s.
On the other hand, contracts with higher standing charges often come with
very low unit rates. So, technically speaking, the outcome will hinge solely
upon your circumstances.
If your business operates only seasonally (such as summer camps, vacation
cottages, etc.), then you will de nitely bene t from this type of tari .
Ideally, businesses and companies that are unoccupied or closed for at least
9-months or more prefer this type of tari plan.
It makes sense, because they seldom consume energy, and when they do,
they’ll only pay for the energy they used during their presence.
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So you might have to think it through beforehand! Feel free to ll in the form
above to compare energy tari s; we can help you determine whether or not
Zero Standing Charge Tari s work best for you.
Take note, unit prices can be much higher with zero standing charges.
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