There’s no one size fits all solution for energy
What type of energy contract should my business be on?
There’s no one size fits all solution for energy; it all depends on your type of business, how much energy you consume and your appetite for risk.
We appreciate that no one feels they are getting a fair energy deal right now, but if you fully understand the options on the table, you can certainly go some way to help ease the pain.
In basic terms, there are two purchasing options at either end of the spectrum, known as fixed and flex and a couple of hybrid options in-between.
Fixed term contract
Pretty much as it says on the tin, a fixed term contract offers a fixed per unit (kWh) price for the duration of the contract, the length of which you decide.
You must be aware that this does not mean you will pay the same price energy bill every month as this is very much determined by the amount of energy you use. It simply means that the cost per unit will not vary for the life of the contract.
A fixed contract is suited to a business which prioritises budget certainty and doesn’t wish to enter into realms of potentially time-consuming and complicated energy management which a more flexible option demands.
However, given today’s high energy rates, it may well be worth considering whether it’s time to seek alternative options.
Flexible contract
A flexible contract enables you to control how and when you buy your energy – great if you know what you’re doing, not so great if you don’t.
Businesses using this approach have the flexibility to carve up their energy purchases into small chunks throughout the life of the contract and in doing so, they can take advantage of the market dips.
However, we would strongly recommend working with an energy management expert if you should decide on this route, to maximise on the potential savings available.
A consultant can create you a bespoke buying strategy and advise on optimum buying times to suit your energy portfolio.
Everything in-between
There are several buying options which sit inside the fix-flex spectrum which you may wish to consider if you’re not satisfied that either of the two are exactly the right fit for you and your business.
You can instead choose to fix some elements of the costs and flex the others and again, we would advise getting expert advice on this style of purchasing to make sure you are getting the best deal for your business.
If you’d like to speak to us about your energy buying options at this current time, we’d be more than happy to have a chat.
