Business Cost Consultants

Differences between procuring domestic and business energy

Blog post   •   Dec 17, 2013 09:47 GMT

Businesses and home owners don't choose their energy supplier and tariff in the same way. Most individuals will have experience in arranging for a new energy supplier for their own home, but not many people will have experience procuring energy for a business premise.

We've pulled together four factors of procuring business energy that differs from domestic energy for anyone in the first time position of procuring for a large business (small business energy also has its own differences).

Tariffs and whole sale prices

Domestic energy providers advertise various tariffs that will exist for a few months at a time. However the price of business energy changes along with wholesale energy prices meaning large business users aren't offered tariffs and instead have to request a unique quote from the supplier that is affected by the wholesale price on that particular day.

Tendering and comparing prices

Businesses can tender for energy, and in practice this is how many businesses decide on a supplier (it's how we procure our clients' energy). A domestic user wouldn't be able to send out an official tender requesting unique energy quotes, but instead can use an energy price comparison site instead to compare all suitable tariffs.

Flexibility of contract

Domestic users can switch energy suppliers with some flexibility, but business users are tied to a contract for a set period of time (which is usually years). However business users can purchase their energy in advanced if the current wholesale price is low; as opposed to procuring again when their contract has ended and wholesale prices may have increased.

Alternative suppliers

When procuring energy for a business there are several other suppliers to consider. Opus EnergyWingas UK and ENI UK are all energy suppliers that cater specifically to the business and commercial market, alongside the big six (and some other smaller suppliers) who also offer tariffs for both the business and domestic markets.