Compare Small Business Electricity Prices & Save Big
As a small business owner, you’re wearing a lot of hats. You’re the CEO, the head of marketing, and also the customer service lead. Often, you’re the person who pays the bills too. That monthly electricity bill can feel like a fixed cost. Moreover, it can seem like you can’t control it. Is it just the cost of keeping the lights on? Well, not exactly. In many areas, for instance, the energy market is competitive. This means you have a choice. Taking time to compare small business electricity prices is a direct way to cut overhead. Consequently, it helps you boost your profit. This isn’t about flipping switches off. Instead, it’s about making a smarter switch for your supplier.
Understanding Your Business Electricity Prices First
You need to know what you’re currently paying for. Only then can you effectively compare energy prices for small business. That utility bill is more than just one number. In fact, it breaks down different charges. Once you understand them, you can find ways to save. So, pull out a recent bill. You’ll see it’s not as simple as you might think.
Most commercial electricity bills have two main parts. Specifically, these are supply charges and delivery charges. Understanding this difference is key. After all, it’s what unlocks the whole market.
Supply vs. Delivery: The Part of Your Business Electricity Prices You Control
Here’s the breakdown that matters most. Your local utility company owns the poles and wires. Therefore, they are responsible for the *delivery* of electricity. They maintain the grid and respond to outages. They also make sure power gets to your building. You can’t choose your utility company. Unfortunately, they control the infrastructure in your area. Their charges are regulated and appear on your bill as “delivery” or “T&D” charges.
The *supply* charge, on the other hand, is for the electricity itself. This is the cost to generate the power you use. In deregulated energy markets, you can choose who you buy this supply from. These third-party suppliers compete for your business. This is exactly why you need to compare small business electricity prices. When you switch, your local utility still delivers the power. Furthermore, they still send the bill. But the “supply” charge will show the new, lower rate you’ve found. The process is easy, and there is no interruption in your service.
Decoding the Jargon on Your Bill
To properly compare offers, you need to know the terms. The most important ones on your bill are kilowatt-hour (kWh) and kilowatt (kW).
- Kilowatt-hour (kWh): This measures your *consumption*. It’s the total amount of electricity you’ve used in a month. Most suppliers quote prices in cents per kWh. Subsequently, this is the number you’ll use to compare small business energy prices.
- Kilowatt (kW): This measures your *demand*. It’s the highest peak of electricity use your business hit in a billing cycle. Some larger businesses have a “demand charge” based on their peak kW. You can lower this charge. For example, you can stagger when you start up heavy machines.
Knowing your usage patterns is very important. A business that runs machines from 9-to-5 is different from a restaurant. Obviously, a restaurant has its peak usage in the evenings. This is the kind of data a new supplier will want.
A Practical Guide to Comparing Business Electricity Prices
Okay, you understand your bill better now. Therefore, you’re ready to enter the market. You can compare business electricity prices in a few easy steps. It’s not hard. However, it does take some prep work. This ensures you make a good decision for your business.
This process is about more than finding the lowest price. It’s about finding the right plan, contract length, and supplier for your needs.
Step 1: Gather Your Usage Data for Accurate Business Electricity Prices
No supplier can give you a good quote without knowing your usage. Before you shop, gather your last 12 months of electricity bills. This is important because your usage likely changes with the seasons. For instance, a shop’s usage will spike during the winter holidays. An ice cream shop’s usage, meanwhile, will peak in the summer. A full year of data gives suppliers a complete picture.
Specifically, you’ll need your total kWh use for each of the last 12 months. Your current bills should show this information. Indeed, this data is the foundation for your whole comparison.
Step 2: Know Your Current Contract Situation
Are you in a contract with a supplier now? If so, you need to know two things. First, find the contract end date. Second, find the early termination fee (ETF). Switching suppliers too early could mean a big ETF. Obviously, that fee would wipe out any savings. So, mark your contract end date on a calendar. You should start the process to compare energy prices for small business about 60-90 days before this date.
If you’ve never switched, you are likely on a default plan. This is a “variable rate” plan with your local utility. Unfortunately, this is often not the best rate. It’s another strong reason to start shopping.
Step 3: Start Shopping and Comparing Offers
Now, you can finally look for better rates. There are a few ways to do this:
- Directly Contact Suppliers: You can research energy suppliers in your state. Then you can contact them one by one for quotes. This can take time. However, it gives you direct contact with the provider.
- Use an Online Comparison Platform: Many websites let you enter your business info. You can then see rates from multiple suppliers at once. As a result, this is a fast way to get a good view of the market.
- Work with an Energy Broker: An energy broker works for you to find the best plan. They know many suppliers and can help you understand complex contracts. They are usually paid by the supplier you choose. This fee is built into the rate they offer you.
No matter the method, the goal is the same. Get multiple quotes based on your real usage data. This lets you make a true side-by-side comparison.
Factors to Look at When You Compare Business Electricity Prices
The price per kWh is the main number. But it’s not the whole story. A smart business owner looks deeper. You need to check the contract details. This makes sure there are no hidden surprises. In reality, the cheapest rate isn’t always the best deal. It might come with bad terms. This is a key part of how you compare energy prices for small business.
Fixed vs. Variable Rates for Your Business Electricity Prices
This is maybe the most important choice you’ll make.
- A fixed-rate plan locks in your price per kWh for the whole contract. This could be 12, 24, or 36 months. This gives you a set budget. Plus, it protects you from market price spikes. Most businesses prefer this stability.
- A variable-rate plan means your price per kWh can change each month. It’s based on the wholesale energy market. This can be cheaper if market prices fall. But it also exposes your business to big risks if prices spike. According to the U.S. Energy Information Administration (EIA), wholesale prices can be very unstable. Consequently, this makes variable rates a gamble for most businesses.
Contract Length and Fine Print
Contracts can range from a few months to five years. A longer contract might offer a lower rate. This is because the supplier has your business for a longer time. However, this also means less flexibility. You can’t switch if market prices drop a lot. Therefore, think about your business’s future when you choose a contract length.
Always read the fine print. Pay close attention to the early termination fee (ETF). Also check the renewal terms. Many contracts have an automatic renewal clause. In short, this will roll you into a new, often higher, rate if you don’t act before your contract ends. This is a common trap. Fortunately, smart business owners can easily avoid it.
Green Energy and Other Options
Does your business care about sustainability? Many suppliers now offer “green” energy plans. These plans ensure that for every kWh you use, renewable energy is put onto the grid. This energy comes from sources like wind or solar. Green plans can be slightly more expensive. However, they can also be a great marketing tool. It can align with your company’s values. The U.S. Small Business Administration (SBA) even suggests that going green can be good for business.
Common Mistakes When Comparing Business Electricity Prices
When you set out to compare business electricity prices, some common mistakes can cause problems. Knowing them from the start can save you headaches and money.
- Focusing Only on Teaser Rates: Some suppliers advertise a very low introductory rate. This rate might only last a month or two before it jumps up. Therefore, always ask for the fixed rate for the entire contract.
- Forgetting About Your Renewal Date: As I said, letting your contract auto-renew is a costly mistake. So, set many reminders. Set them for 90, 60, and 30 days before your contract ends. This tells you to start shopping again.
- Ignoring Local Utility Fees: Remember, you’ll still pay delivery charges from your local utility. This is true even after you switch suppliers. Make sure you factor this in when you estimate your total bill. Indeed, the switch only affects your supply costs.
- Not Understanding Your Load Factor: If you use a lot of energy, know your “load factor.” This is the ratio of your average use to your peak use. It can help you find special plans. A business with a high load factor has steady energy use. Thus, it’s often more attractive to suppliers than a business with spiky, unpredictable use.
Frequently Asked Questions
What is energy deregulation?
Energy deregulation is law that separates energy generation from its delivery. It creates a competitive market. In other words, it lets customers choose their energy supplier. You aren’t forced to buy from the local utility. This is why you can compare small business energy prices.
Will my power get shut off when I switch suppliers?
No, definitely not. The switch is just paperwork. Your local utility company still delivers the power. Moreover, they use the same wires. They are still responsible for the grid. There is no physical change at your business. Thus, there is zero risk of losing power.
How long does it take to switch to a new supplier?
After you sign a new contract, the switch happens on your next meter read date. This can take from a few days to a month. It depends on your utility’s billing cycle. Your new supplier will handle all the details.
Is it really worth the effort to compare prices?
For almost any business, yes. A small saving of one or two cents per kWh can add up. It could mean hundreds or thousands of dollars in annual savings. It depends on your usage. In fact, it’s a rare expense where you can save a lot with just a few hours of work.
Can I switch back to my utility for supply if I don’t like my new provider?
Yes, you can. However, you may have to pay an early termination fee if you break a contract. Once your contract is up, you are free to switch again. You can also return to the utility’s default service.
Powering Your Business Forward
Your electricity bill doesn’t have to be a passive cost. You don’t have to just accept it each month. By being proactive, you turn it into a chance to save. First, understand your bill. Then, gather your data. Finally, carefully check your options. This empowers you to take control of a big operational cost. The competitive energy market is meant to help you. But the benefits only go to those who take part.
Don’t leave money on the table. Start the process today. Contact our team to get a free analysis of your energy spending. Or call us at (123) 456-7890 to speak with an energy specialist.
Taking a few hours to check your options can help your company’s finances for a long time. When you look at your bottom line, you’ll find that taking the time to compare your business electricity prices is the most powerful move you can make.
