Commercial vs Domestic – What You Need to Know<
If you’re searching for a new gas or electricity deal, it makes sense to know what you require from your next contract or supplier. There are hundreds of energy contracts available, whether you’re looking to compare business energy or one for your home. In this guide, we hope to explain the key differences between business energy and domestic energy contracts.
What’s difference between business and domestic energy contracts?
To start with, there are a number of differences between commercial energy and domestic contracts that consumers must be aware of. Contract length is a good place to start. With a domestic energy contract, it’s a lot easier to exit the contract. This isn’t the same with business contracts, as you will only be able to exit this type of contract at the end of it. Additionally, these plans also do not come with a cooling off period when you first sign up, meaning it’s important to make the right decision from the offset.
A large number of domestic deals will allow you to leave early if there is an exit fee within the terms. Whereas business energy tariffs don’t normally offer this exit option, this means that you are locked in for the duration of the contract once you put pen to paper. If you are looking to switch your business electricity or gas, you will need to be within the renewal window.
Next, you won’t actually be able to enter into a commercial energy contract without speaking to someone at the energy company first. Energy tariffs will need to account for your business size, location, usage and a whole host of other factors related to your company.
Domestic contracts in comparison are relatively straightforward to sign up for. You can do this online by entering your details and pressing ‘confirm’ at the end. Businesses in the UK must contact an energy supplier and submit the relevant information to get an accurate quote.
For those that operate their business from their home and are looking for a commercial energy deal, more than 50% of the gas and/or electricity must be consumed for business purposes. Although this may sound like a significant amount of power, it does in fact account for heating and lighting during any office hours. For example, if your company’s office hours are between 8am and 6pm from Monday to Friday, you’re highly likely to meet the criteria for a business energy plan.
Business customers should also remember that the price they pay for energy will largely depend on their business size. This is because larger energy users are typically offered a lower unit rate in comparison to a smaller company. After all, they are using a lot more gas and electricity each year and a supplier will want to retain their business for years to come. Nevertheless, even smaller companies are able to find a great deal, as business energy tariffs still offer more competitive rates when compared to a domestic plan.
You may also find it useful to check out our guide to business tariffs to get a better understanding of what each contact type consists of.
How does comparing business contracts differ from comparing domestic contracts?
If you are looking to compare business and domestic contracts, whether it’s for gas, electricity or both, you will need to be aware of a few key considerations. These include but are not limited to the following:
- Unit rates
- Contract length
- Tariff type
- Business size
- Annual consumption
Also, keep in mind that commercial energy deals do not have dual fuel contracts, if you require both gas and electricity, you will need to obtain a separate quote for each fuel type. However, you can purchase both from the same supplier.
As mentioned previously, in most cases, you will not be able to enter into a business energy contract online, like you would a domestic contract. Commercial contracts require a bit of extra work on your part. Fortunately, Utility Saving Expert has helped simplify the whole process through our streamlined comparison tools which are free to use.
Before a supplier is able to give your firm an accurate quote, they will ask you to provide them with some extra information. In most cases, you will need to contact an energy supplier and provide them with the following details:
- How much energy your company consumes
- The time of day or night your business operates
- The location of the business
- What industry is your business in?
- The number of sites you require energy for
Businesses that have more than one site should consider a multisite meter to save money on their energy bills.
To make life easier, Utility Saving Expert can compare business gas and electricity rates for you, we’ll help you find the best tariff that meets the needs of your business.
As most businesses will be using far more energy than the average domestic user, they also have greater flexibility within the intricacies of the contract, as these are tailored to meet the requirements of the firm after all. Businesses vary by size and industry, and even those that are of similar size or nature may require vastly different terms. Although owners and managers can search for the perfect deal, finding the right option is far more complex as a result when compared to looking for a domestic deal.
For this reason alone, it may prove useful to read our complete guide to business energy, which covers the various aspects and what company managers should look for before agreeing to a new tariff.
In summary, business energy contracts are more complex and have a lot more nuance compared to domestic energy contracts. Although the unit rate is cheaper, they are also typically much longer in duration. The average contract is between three and five years. Most suppliers won’t allow you to switch straightaway and you will need to make contact to give them the necessary information to do so.
Finally, remember to read the terms and conditions and ensure you are happy before you sign up, as there won’t be a cooling off period, and you can’t cancel until you enter the renewal window.