How Do Demand Charges Work?
It is important to figure out how charges work when it comes to your maximum demand meter.
To understand this, you need to know how commercial entities are billed for their electricity use. Most commercial customers will have utility bills that are separated into two main sections.
The first is energy consumption, which is the amount of energy (kWh) that is consumed. This is then multiplied by the relevant price of energy, i.e. £/kWh, during the period of billing.
The second is the demand, which is the maximum amount of power (kW) that is drawn during any given period of time, i.e. 30 minutes. This is then multiplied by the relevant price of energy, i.e. £/kWh.
How To Lower Your Maximum Demand Electricity Bill
There are a number of different approaches you can use to lower your electricity bill. Here are some effective suggestions to help you get started:
Reduce your MIC
MIC stands for Maximum Import Capacity. This value is the upper limit on the total electricity demand you are able to place on the network system.
Of course, it is imperative to ensure that this figure is accurate, as the last thing you want to do is run out of your energy supply.
However, if the supply capacity is much greater than your energy consumption, you are essentially going to be paying for more than you require.
Therefore, it makes sense to take a look at your MIC and assess your electricity consumption over the past 12 months. If there is the opportunity to lower your MIC based on your energy usage, do so.
Consider a time-of-use tariff
Another option that you may want to consider to reduce your business electricity bill is a time-of-use tariff.
A time-of-use tariff is a recent development that a number of energy suppliers are using to encourage their clients to use energy during off-peak times.
As per this tariff, you are provided with considerably cheaper prices when the demand is low. During moments of peak power demand, your charges will be higher.
Therefore, if your business works during unconventional hours, i.e. throughout the evening, you may want to consider using a time-of-use tariff.
Of course, if your business is going to be in operation from 9 am until 5 pm, Monday to Friday, a time-of-use tariff probably isn't going to be the best choice for you.
Remember that time-of-use tariffs can differ from supplier to supplier, so it is important to find out about the specific charges and the peak time frames offered by the provider you are considering.
Conduct a business energy audit
We also recommend that you have a business energy audit carried out. This will assess the energy efficiency of your business, your current energy usage, and your energy needs.
An audit can look at everything from energy consumption to energy-draining elements of your business. It incorporates the equipment you use, your business structure, and everything in between.
The aim here is to provide you with a complete overview of your business's energy use and business energy requirements.
Once you have this information, you are going to be best placed to make decisions that will enable you to reduce your energy bill.
Not only will you be able to see how much electricity different pieces of equipment are using, but you will be able to pinpoint key areas that can lead to significant changes in your electricity bills.
The final piece of advice that we have for you when it comes to lowering your energy bills is switching electricity suppliers.
Is your current energy supplier truly offering you the best deal? Yes, they may have provided you with the greatest price when you first signed up for their service but that does not mean that this is still the case.
New deals are cropping up all of the time. Plus, a lot of energy providers will offer great prices for the first year, and then the terms change.
This is why it makes sense to take a look at your current plan so you can discover whether or not it truly makes sense for your business. Of course, conducting a business audit prior to this is going to facilitate this process and make it a lot easier.
Plus, when you use a service like ours, you can easily compare business electricity providers side by side so you can determine which one is best for you.
If you are thinking about switching energy providers, you do need to find out whether it is going to cost you any money to leave your current contract.
In some cases, your new supplier will offer to pay this fee. It depends on how many months are left on your contract. However, it is important to factor this in. In some cases, switching is worth the fee due to the cost savings that will be made.
When signing up for a new energy provider, it is important to make sure you take the time to assess the terms and conditions properly. Some energy deals can seem good on the surface, yet once the benefits run out, you could find yourself tied in to a very expensive energy contract for a long period of time.
Compare Providers At Business Energy UK
No matter whether you are interested in a maximum demand meter or not, Business Energy UK can help to make sure you are on the most efficient plan for your electricity consumption.
You can compare provides with ease. From half hourly meters to businesses offering smarter electricity network solutions, there is something for all requirements, and you will be able to see which electricity supplier is right for you.
If you have any queries or you need some expert advice on choosing the best business energy plan for your needs, please do not hesitate to get in touch with our expert team for more information. We are always happy to help.