SOME UK firms are wasting thousands of pounds each year by failing to switch suppliers when their fixed-price energy contracts expire, according to a new survey.
On average, businesses save almost £1000 annually by shopping around for the best business energy prices than those offered by their existing energy supplier, according to the study by the Energy Advice Line.
Energy-intensive businesses benefit even more by switching suppliers, with some firms saving almost £10,000 a year by opting for a competitor rather than accepting a renewal quote from their existing supplier.
Julian Morgan, managing director of the Energy Advice Line, the UK’s leading business electricity price comparison and switching service, said the findings underscored the importance of changing suppliers.
“The findings couldn’t be clearer – businesses that simply roll over and stay with the same supplier when their fixed-price energy contracts end are throwing hundreds and sometimes thousands of pounds away,” Mr Morgan said.
“Many business owners believe that all energy companies charge roughly the same rate for business electricity, but nothing could be further from the truth.
“Suppliers make their profits from customers that don’t engage with the market and stay with them year after year in the mistaken belief that there’s not much difference in tariffs.
“The opposite is in fact true. It’s essential for business electricity users to give timely notice to their suppliers that they intend to switch and then shop around and reap the savings.”
According to the survey, Energy Advice Line customers saved an average £978 each year on their business electricity bills by shopping around and switching rather than accepting the renewal quote sent to them by the supplier they were already with. This is based on an average annual energy spend of £2,500.
However, potential savings for larger organizations and those with heavier energy use are even more significant, according to the survey.
Examples of savings achieved when firms used the Energy Advice Line’s free switching service to search the market for cheaper energy in 2012 included:
- A retailer in Edgware, Middlesex, saved £9779 annually by agreeing to a fixed-price contract with Opus Energy for 12 months. The renewal quote offered by their existing supplier was 50% more expensive.
- A restaurant owner in Dartmouth, Devon, saved £1,063 annually by agreeing to a fixed-price contract with Scottish Power. The renewal quote from their existing supplier was 22% more expensive.
- A bar owner in Lymington, Hampshire, saved £3,357 annually by agreeing to a fixed-price contract with EDF Energy. The renewal quote from their existing supplier was 34% more expensive.
“Businesses have nothing to lose and everything to gain by serving advanced termination notice to their energy suppliers the required number of days before their fixed-price contracts end,” Mr Morgan said.
“If they fail to do this, they might find themselves stuck in an expensive and onerous roll-over contract and end up paying significantly more than they need to.
“A completely independent and impartial switching service like the Energy Advice Line makes it easy for firms to shop the market for the best business electricity prices and we also offer a free contract management service to affect a seamless transfer to the customer’s new supplier.
“If anyone has any doubts about how much firms can save, just visit our website or follow us on Twitter where we make public all the savings we achieve for our customers. The results speak for themselves.”
The service saves firms the time and trouble of trawling through thousands of business electricity and gas tariffs by analyzing prices from its panel of electricity suppliers and matching them with the requirements of the organization.
Significantly, tariffs are compared on a like-for-like basis without the use of product names or payment plans, which means that quotes are easy to understand and accurate.
The Energy Advice Line’s expert team also offers a free renewal reminder service and advice on the advanced termination notice requirement for suppliers to ensure firms do not get caught in expensive business energy rollover contracts.
For more information visit www.energyadviceline.org.uk