Bills and meters
How to compare business energy quotes properly
Short answer
Compare the total estimated annual cost on your actual consumption, for the same contract length and start date, and check what is fixed and what can change. The lowest unit rate isn’t always the cheapest deal, because the standing charge, commission and contract terms change the real cost.
The checklist
| Check | Why it matters |
|---|---|
| Unit rate and standing charge together | One can cancel out the other |
| Same contract length and start date | Prices change with term and timing |
| What’s fixed and what’s passed through | Pass-through costs can rise during the contract |
| Broker commission | Shown in the principal terms; it’s part of your price |
| Volume tolerance | Using much more or less can bring extra charges |
| Notice and termination | What it costs to leave or change |
Worked example
Two offers for a supply using 3,000 kWh a year:
| Offer A | Offer B | |
|---|---|---|
| Unit rate | 24p per kWh | 25p per kWh |
| Standing charge | 60p per day | 30p per day |
| Annual cost (before VAT and CCL) | £939 | £860 |
Offer A has the lower unit rate, but Offer B is cheaper for this site because of the lower standing charge. On a site using 20,000 kWh a year, Offer A would be cheaper. That’s why the comparison has to use your own consumption.
Illustrative figures to show the maths, not real prices.
Get like-for-like quotes
Quotes taken on different days can differ because wholesale prices move. Ask for offers on the same day, for the same start date, using the consumption from your bills. See how to read your bill to find it.
Sources
- Ofgem: Energy advice for businesses (ofgem.gov.uk)
Questions
Is the cheapest unit rate the best deal?
Not necessarily. For low-use sites the standing charge can matter more, and contract terms such as pass-through costs and volume tolerance affect the real cost.
What consumption figure should I use?
Your actual annual use in kWh from your bills, ideally for the last twelve months. Your supplier can provide it if you don’t have it.
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