Business energy suppliers overcharge up to £1,100!
Business energy suppliers are charging too much, but because of restrictive contracts and a failure on the part of small businesses to shop around for their energy supply, they are being allowed to get away with it.
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Renewable energy supplier Bulb Energy has released data that suggests that small business electricity supply is overcharged by an average of £289 a year - around 12% of the average annual bill for business energy.
What’s different about small business electricity supply?
Unlike home energy customers, fixed-tariff business energy suppliers are often paid for in full up-front rather than month by month for the length of the contract. These deals are inflexible compared to domestic energy, and substantial early termination fees discourage businesses from switching to another provider.
Some business energy deals go beyond this, with one even stating that early termination is not allowed and reserving the right to block customers from switching to a new provider. As in the domestic market, when contracts are up providers quietly move customers onto variable tariffs which can almost double their bill.
When businesses do try to find a new business energy supplier, a lack of transparency and an abundance of seemingly indistinguishable business energy tariffs make it difficult to know where to turn. This is despite the fact that 80% of the market is shared between just eight suppliers.
Post-lockdown savings to be made
Small businesses looking to make savings to stay afloat as they become active again could save hundreds of pounds by switching business energy suppliers. In some cases, not shopping around could be costing businesses £1,100 too much over the course of the year - putting up their energy costs by about 50%!
The head of Bulb’s business energy market, Dan Sheldon, says that “it's wrong that some energy suppliers are locking businesses into unfair and expensive deals,” citing the average yearly saving that small businesses can make by switching. He went on to say:
The last thing entrepreneurs need now is more challenges and costs as Britain gets working again. Businesses can and should demand better - by voting with their feet.