Ask three suppliers for a price and you will get three quotes that look broadly similar and are, in practice, very difficult to compare. Different contract lengths, different start dates, different assumptions about how much energy you use, and each one valid for about as long as it takes to read it.
This guide covers what a business energy quote actually contains, where the traps are, and how to put competing offers on the same footing.
What is actually in a quote
Almost every business energy quote is built from two charges.
The unit rate is what you pay for each kilowatt hour you use, shown in pence per kWh. It is the number most people look at first.
The standing charge is a fixed daily amount you pay regardless of consumption, covering the cost of maintaining your connection. It applies whether your site runs flat out or sits empty over Christmas.
Those two interact, and that is where comparisons go wrong. A quote with an attractive unit rate and a high standing charge can cost a low-usage site more over a year than a quote with a slightly higher unit rate and a modest standing charge. A high-consumption site will often find the opposite. There is no universally better shape, only the shape that suits how you actually use energy.
Larger sites, particularly those on half-hourly meters, may also see capacity or availability charges and separate day and night rates. If your quote has them, they belong in the comparison too.
Why the headline number misleads
The only meaningful comparison is total cost across the term, calculated against your real consumption. That means taking each quote, applying your annual usage to its unit rate, adding a year of its standing charge, and comparing the results.
It is not complicated arithmetic, but it is rarely done, because the quote does not present itself that way. Suppliers lead with the unit rate because it is the number that sells.
What makes two quotes incomparable
Different contract lengths. A one-year price and a three-year price are answers to different questions. The longer term usually costs more per unit and buys certainty for longer. Neither is better in the abstract.
Different start dates. Energy is priced forward, so a contract starting in October is priced against a different part of the market than one starting in January.
Different usage assumptions. If a supplier has estimated your consumption rather than using real figures, the quote is an estimate wearing a quote's clothing.
Different meters. Multi-site businesses often receive quotes covering different combinations of supplies. Check every quote covers the same meters before comparing anything.
Different days. This one catches people out most. Wholesale prices move daily, so a quote from Monday and a quote from Thursday reflect different markets. Gather them together or you are measuring the market rather than the supplier.
Quotes expire faster than you expect
Business energy quotes are frequently valid for hours rather than days. Suppliers are pricing against live wholesale markets and will not hold an offer while those markets move against them.
The practical consequence is that a leisurely comparison, one quote this week and another next, does not work. By the time the last arrives, the first has gone. If you are going to compare properly, compress it into as short a window as you can manage.
What to have ready before you ask
These turn estimates into firm prices.
A recent bill, which shows your supplier, your tariff and your contract end date.
Your meter numbers, MPAN for electricity and MPRN for gas. These identify the exact supply point, its network region and its consumption history, and prices vary by region.
Your annual consumption in kWh, ideally from actual reads rather than estimates.
Your contract end date, because it determines when a new contract can start.
For multi-site businesses, the same for every site.
What is not always in the price
Check whether a quote is shown inclusive or exclusive of VAT and the Climate Change Levy, because the difference is material and suppliers present it differently.
Business energy is normally charged at the standard rate of VAT, though premises using only small amounts of energy, and charities and non-profits, may qualify for the reduced rate and for relief from the Climate Change Levy. The rules are specific, so it is worth checking your eligibility rather than assuming the rate on your bill is correct.
Before you agree
Business energy contracts do not carry the statutory cooling-off period that domestic contracts do, and verbal agreement can be binding. Treat the moment of acceptance as final, because in most cases it is.
That is not an argument for hesitating indefinitely. Letting a contract lapse puts you onto out-of-contract or deemed rates, which are among the most expensive a supplier charges. The point is to be certain before you commit, rather than expecting to unwind it afterwards.
Doing it yourself, or not
You are never obliged to use a broker. Approaching suppliers directly is entirely possible, and for a single small site it can be quick.
What a whole-of-market broker adds is breadth and simultaneity: many suppliers priced at once, on identical terms, in the same market conditions, without you making the calls. Energy Observe has been an independent broker since 2009 and is a member of the Energy Ombudsman scheme. If you would rather hand over the legwork, you can get a quote or read how we handle switching business electricity and gas.
If you would rather do it yourself, the same rules apply. Same term, same start date, same meters, same day, and compare total cost rather than headline rates.
Once you have chosen, our step-by-step guide to switching business energy supplier covers what happens next.
