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Business Energy Tariffs and their Types

In the business energy market, choosing the right tariff is crucial. It can significantly impact your company's bottom line and align with your environmental goals. To navigate this terrain effectively, it's essential to understand the various business energy tariffs available. In this guide, we'll explore five significant types of business energy tariffs: Fixed Tariffs, Variable Tariffs, Deemed Tariffs, Green Tariffs, and Economy 7 and Economy 10. Let's break down the differences among them to help you make an informed choice.

Fixed Tariffs: Stability and Predictability

Fixed tariffs are a popular choice among businesses looking for price stability and predictability. With a fixed-rate tariff, the price you pay for each unit of energy remains consistent throughout your contract period, usually one to five years. This protects against fluctuations in energy prices, ensuring you have a clear understanding of your energy costs. Fixed-rate tariffs are excellent for budgeting and managing expenses, making them an attractive option for businesses seeking financial stability. They offer protection from sudden energy price hikes but might not take advantage of falling prices in the market.

Variable Tariffs: Flexibility and Risk

Variable tariffs offer flexibility but come with price unpredictability. The cost per unit of energy can change based on market fluctuations, supplier decisions, and external factors. While variable-rate tariffs may not provide the price stability of fixed-rate options, they can sometimes lead to savings when energy prices are low. These tariffs are suitable for businesses comfortable with some risk and those who believe energy prices may decrease over the contract period. However, variable tariffs can make budgeting more challenging, as your monthly energy bills may fluctuate.

Deemed Tariffs: The Default Option

Deemed tariffs are not chosen by businesses but are default rates applied when moving into new premises without signing a contract. These tariffs are generally more expensive than standard negotiated deals, and you'll want to switch to a better tariff as soon as possible to save money. Deemed tariffs are usually rolling monthly contracts, providing flexibility but often coming at a higher cost.

Green Tariffs: Sustainability and Responsibility

Renewable energy tariffs are a sustainable choice for businesses committed to reducing their carbon footprint. These tariffs source energy from renewable sources like wind, solar, and hydroelectric power. Opting for renewable energy demonstrates a commitment to environmental responsibility and aligns with corporate sustainability goals. Green tariffs come in various forms, each with its unique pricing structure and environmental benefits. Some offer 100% renewable energy, while others combine renewable sources with conventional energy, providing flexibility to match your sustainability objectives.

Economy 7 and Economy 10: Night-time Savings

Economy 7 and Economy 10 tariffs split the day into two or three periods, each with different energy rates. Typically, these tariffs offer cheaper electricity rates during the night, making them ideal for businesses that can schedule energy-intensive tasks during off-peak hours. Economy 7 has seven hours of cheaper electricity during the night, while Economy 10 offers ten hours of reduced rates. These tariffs are most common in residential settings but can also benefit certain commercial operations, such as night-shift manufacturing.

Key Differences Among Them:

  1. Price Stability: Fixed tariffs provide price stability, while variable tariffs are subject to market fluctuations.

  2. Risk: Variable tariffs come with risk, whereas fixed tariffs offer protection from unexpected price hikes.

  3. Default vs. Chosen: Deemed tariffs are the default option for new premises, while businesses actively choose fixed or variable tariffs.

  4. Sustainability: Green tariffs focus on sourcing renewable energy, aligning with environmental goals.

  5. Night-time Savings: Economy 7 and Economy 10 provide lower rates during specific off-peak hours, ideal for businesses with night-time energy needs.

In conclusion, selecting the right business energy tariff involves assessing your company's needs, risk tolerance, budgetary constraints, and environmental objectives. By understanding the differences among fixed, variable, deemed, green, Economy 7, and Economy 10 tariffs, you can make an informed decision that serves your business's best interests. Whether you prioritize price stability, flexibility, sustainability, or cost savings during off-peak hours, there's a business energy tariff designed to your unique requirements. Make your choice wisely to power your business efficiently and economically.

Lloyd Energy: Choose Your Business with the Right Tariff

When it comes to securing the best business energy tariff for your company, Lloyd Energy stands out as a reliable partner. With us, you can access solutions for both electricity and gas, ensuring you receive the most favourable terms for your unique business needs.

Customers partnering with us can benefit from expert guidance in choosing from a variety of tariffs, including Fixed Tariffs, Variable Tariffs, Deemed Tariffs, Green Tariffs, Economy 7, and Economy 10. Our dedicated team ensures that businesses have the information and support necessary to make informed decisions that positively impact their bottom line.

Lloyd Energy stands as a leading business energy consultant, providing your business with the means to access the right tariff for your unique requirements. Get your quote today, within 60 seconds and compare your tariffs with more than 20 suppliers in your location.

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