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How to choose a new energy supplier

  1. energy supplier
    Kat Haylock

    Kat Haylock Community Editor Staff Member

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    In association with Total Gas & Power

    As The Guardian reported earlier this year, a record number of people switched energy supplier in February - around 660,000 in total.

    The switch made headlines because few industries suffer from consumer apathy like energy. Changing supplier seems arduous, complicated and there’s always the risk you might end up worse off.

    For a small business owner drowning in administrative red tape on a daily basis, looking for a new supplier isn’t an appealing task. According to a 2016 report, more than 35% of business energy customers were dissatisfied with the overall service of their supplier, but fewer than a quarter of businesses actually made the switch.

    And, even if you do decide to move, the choice in the market is so overwhelming that it’s easier to just opt for the first one you see – rather than the supplier who actually gives you the best deal.

    To help you navigate the minefield, here are a couple of things to take into account when choosing an energy supplier and contract to suit your business.

    Take your time

    If you can, take some time to browse the market before you decide. This sounds like remedial advice, but many businesses make snap decisions to avoid doing the legwork. This can be an expensive mistake.

    As one thread mentioned recently, salespeople can be pushy – ignore anyone who’s actively trying to rush you into making a decision. If they had something good to sell, forum member Anadalia pointed out, they would give you time to do your research about them.

    Don’t always choose the cheapest

    There’s plenty to choose from in the market, from the Big Six suppliers to a growing number of smaller, independent companies. Each company is likely to offer something slightly different too: products, tariffs, contracts and energy sources will all vary by company.

    When faced with myriad options, it can be tempting to opt for the cheapest. But digging a little deeper can get you a contract that’s a better fit for the future of your business: with tariffs, for example, you might want to look into flexible tariffs you can get out of at any time, or something that’s environmentally friendly.

    Most of all, remember if a rate seems too good to be true, it probably is, and unsustainable pricing can result in sudden price increases.

    Choosing a supplier who offers a fixed price product over a number of years can help with budgeting, and it can also protect you from the majority of future price hikes. It’s worth noting that some third party charges will still occur on these tariffs, like the Climate Change Levy, which suppliers have no control over.

    Consider expansion

    If you’re planning to move to a new building or increase production, check that your supplier can help smooth the process. They should be able to help with necessary site works: site connections and disconnections, meter upgrades, installations or removals and project management.

    Your energy supplier should also be able to coordinate this work with the local gas or electricity distributor and let you know of any potential disruptions to the service.

    Involve an energy broker – if it’s right for you

    An energy broker can help businesses choose an energy supplier. They can be used to navigate the market, find the best deals and negotiate on your behalf. To decide whether they’re right for your business, consider the pros and cons:

    Pros:

    • A broker can help you get a bigger picture of the market. Published prices can be scarce in the business market, and price comparison sites rarely include all suppliers.
    • You might be able to get a better price. Brokers can occasionally negotiate better prices than a customer would, and suppliers know they have to keep prices competitive.
    • You’ll save time, meaning you can focus on your business. This might not be the option for everyone, but if you can afford to delegate the task out to a broker, it will save you the hassle.

    Cons:

    • A broker will tend to have relationships with some suppliers already. To give yourself the broadest number of options, you’ll need to make sure in advance that they cover as many different suppliers as possible.
    • You’ll have to pay for the service. It’s up to you to weigh up whether the benefit gained will make up for the cost.
    • You’ll still need to spend time doing some research and due diligence to choose your broker.

    Don’t settle for less

    Regardless of the direction you decide to take with your energy supplier, don’t settle for poor customer service or a contract you’re paying too much for. Take the time to find something that’s right for the future of your business, and you’ll reap the benefits in the long run.

    Whether you’re looking for fixed rates, a flexible tariff or energy from 100% renewable sources, Total Gas & Power can help. Get in touch to request a no-obligation quote today.

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