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Businesses and homes use the same electricity, but energy companies treat their supply of it differently.
Since many of us have been working from home, we’ve started questioning the difference between the two and which one is more affordable.
Business and Domestic energy do not operate the same way, and we’re here to show you how (and how to get the best energy supplier and deal).
Business Energy VS Domestic Energy
The unit measurements for the two are the same, but their plans in terms of contract details and costs differ. You pay a rate of 5% on VAT for domestic energy and a 20% rate for business energy.
So gas and electricity rates vary, and business energy seems more expensive, but their rates are, in fact, cheaper.
However, when and how you use your energy and the amount of energy you use significantly impact the final cost.
Since working from home, many want to switch from domestic energy to business energy. But is important that you consider a few factors.
Such as the usage levels, your business status, do a price comparison, meter profile, business energy tariffs are generally fixed price, regulator protection, council tax, and energy.
The Difference
The energy unit price is generally lower for business electricity, but price fluctuations tend to occur, whereas they don’t with domestic electricity. There are more pricing criteria and more levies for business energy.
Whereas domestic energy has a cooling-off period and fewer regulations. Contract terms are also shorter for domestic energy and easier to terminate.
Businesses pay a lower price per unit due to economies of scale. This is because suppliers can sell businesses higher volumes of energy since they consume more.
The pricing criteria are very different as well. Pricing is generic for domestic energy customers and depends on their location and payment method.
In comparison, the price for business customers depends on location, type of business, credit score, contract length, payment method, and demand profile.
Uner a business energy contract, you must pay a climate change levy and stick to strict guidelines and regulations.
Those with domestic energy contracts get a cooling-off period.
This is to protect them. They can also switch energy suppliers when they please, while a business will face high fees if they try to terminate a contract with business energy suppliers as they are in a fixed-term deal.
However, businesses have more contract options and tailor them to their needs.
A business electricity contract has better deals, pricing can be fixed or flexible, gas and electricity unit costs are lower, and you can get a professional to help you find the best business energy deal.
Thus, the energy supply is the same. The main difference is the price as a business energy supplier has much higher rates.
But with all factors considered, business energy lands up being cheaper than domestic energy.
Working From Home
If you’re working from home, it’s recommended that you switch to business electricity as it will save money.
You’re probably using less electricity and gas each day, so you likely won’t be liable for the VAT or specific levies. And switching to a business energy supply is relatively quick and easy.
FAQs
Is Business Energy Cheaper?
The answer is a bit complicated as there are numerous factors to take into account. The answer is generally yes, but it is all dependent on your circumstances and your energy demands.
How To Switch To Business Energy Contracts?
Contact energy experts. They can recommend the right supplier for you and will also assess if the switch is a good idea for you.
Can You Get Business energy contracts When Working From Home?
You certainly can, since you’re most probably classed as a microbusiness. You will have to prove that you run a home-based business and use 50% of your electricity for your business.
