CHRIS RICHARDS | 21 MAY 2021
With so many tariffs and energy plans available, you may have come across a no standing charge plan. We all want to pay the right amount for our energy and that involves comparing tariffs to see what fits your business best.
In this short guide, we will take you through exactly what no standing charge tariffs involve, how they could benefit your business and answer some common questions about these flexible plans.
If you have ever compared energy plans with Business Energy UK, you will notice that a standing charge is an important thing to consider for finding the cheapest energy prices. But what is it?
Simply put, a standing charge is a daily fee added to your business energy bills: on fixed gas, electricity or dual fuel tariffs. The standing charge covers all the costs related to the provider supplying gas or electricity that the business uses.
Most energy suppliers apply a standing charge to their gas and electricity tariffs. This came after Ofgem reforms on the energy market in 2014, which introduced a standard tariff structure of a unit rate and a standing charge. It can range anywhere from 10p-80p daily for gas and 5p-60p per day for electricity, depending on the energy suppliers.
The key thing to remember is that when an energy tariff involves a standing charge, this will occur daily regardless of the amount of energy used. This means you will still be charged even when you don't use any energy.
As you have a standing charge for both gas and electricity, with an average cost of 27p a day, you could be paying approximately £197.10 a year for both regardless of how much energy you actually use. For medium to large businesses, this works out to be financially viable but it can mean that smaller and irregular businesses pay excessive fees on their energy use.
Also referred to as zero standing charge tariffs, this is when an energy supplier offers a tariff without standing charge fees. Ofgem regulations in 2016 meant that suppliers were no longer required to put standing charges on gas and electricity bills. Whilst it is uncommon, there are a few zero standing charge energy deals available on the energy market.
However, not having to pay a standing charge doesn't always help businesses save money. To balance the loss of a standing charge, suppliers tend to charge higher unit rates on their business gas and electricity.
This means that if you consume larger quantities of energy, you are likely to be paying more than if you were on a standing charge tariff. However, the switch can ultimately help unique business models.
So, without standing charges, you effectively only pay for the energy that you use. This is a popular energy deal for a seasonal business or one that runs infrequently, as they only consume small quantities of energy throughout the year.
Having to pay a standing charge can be a devastatingly large fee for the energy you will never use! Due to the unique nature of these businesses, these gas and electricity tariffs are rarer across energy providers, especially within the Big 6.
The first step to getting a no standing charge tariff is to find the right provider! It is important to compare suppliers to find the perfect energy plan for your business. Not every provider will offer the option of no standing charge on your energy bills, especially larger suppliers.
Using Business Energy UK you can compare a wide range of energy companies to find the plan that suits your business best. After finding the best standing charge plan and provider, you follow the switching process of the provider and reap the benefits of an energy plan that fits your businesses needs.
If you think your business would benefit from switching your energy deals, then get your Business Energy quote today. With just a few simple details, we can compare energy tariffs for you across many available energy suppliers.
Plus, our energy experts are dedicated to negotiating the best price with any suppliers, offering a no standing charge plan, so you can switch to a more affordable energy option. You can get a free quote within a few moments, comparing deals across a range of energy suppliers. We ensure that you will find the perfect deal for your individual business.
For businesses that operate irregularly or seasonally, making the switch to zero standing charge tariffs could save you a ton of money. The money wasted on standing charges can then be utilised and invested more effectively. Also, if you use prepayment meters then it would be worth checking on available tariffs that remove the daily standing charge as it can lead to excessive fees.
The key to comparing these tariffs is preparation. By looking at previous bills and considering how many months of the year the business is occupied (generally three or fewer months per year is ideal for no standing charge tariffs), you can see whether you benefit from no standing charges.
If you are consuming medium to high levels of gas or electricity then a no standing charge tariff may not work for you - and may lead to you paying more than you need to! By using our easy-to-use comparison tool you can compare other electricity and gas tariffs that work for you.
Picking your businesses energy tariff is immensely important, and no one plan works for every business. Standing charge tariffs do not work for every type of company, and there are both positives and negatives to these zero standing charges energy tariffs:
Pros
Cons
Essentially, the no standing charge tariff is ideal for businesses that use small amounts of energy over a year, as their main advantage is that you only pay for the energy you use. Plus, with the potential reduction of unit rates, it can be ideal for creating a long-term sustainable energy plan.
For smaller or unconventional businesses, a zero standing charge tariff can be an incredible way to help save on avoidable business costs throughout the year. Whilst it depends on the individual business, calculating the money you save means looking at your annual energy usage in kWh.
Comparing the actual usage cost against how much you pay with a daily fee means you might discover you could save hundreds on your businesses energy. Get a free quote today with Business Energy to make sure you have an affordable energy plan that suits your business!
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