How to choose the best business gas tariff

What is a business gas tariff?

It is the way an energy company charges you for your gas service. Tariffs can be based just on price, or vary depending on the size of your business and how the energy is sourced.

There are two types of business gas tariffs:

• Fixed which means the price per unit stays the same for the length of the contract

• Variable which means the price per unit of gas may go up or down

Here is more information about how business gas works

What do you need?

When choosing your business gas tariff, think about:

• The size of your business: This affects how much energy you use. For example, a newsagent only needs gas for heating and hot water, but a restaurant needs gas to power industrial kitchen equipment.

• Your business location: This affects which tariffs you have access to, because most suppliers only provide service in some areas of the UK.

• How many locations you have: This affects what you pay for your energy because some suppliers offer discounts on multi site tariffs.

• Flexibility of contract: This affects how much you pay for your gas. For example, fixed energy contracts are usually cheaper but tie you in for longer.

Deciding what you need can help you narrow down your options because some suppliers will be able to cater to your needs better than others.

Pick your tariff

Compare tariffs to get the right service for your business at the cheapest price.

You can negotiate price, so take the time to shop around and get the best deal.

Fixed term

This lets you fix the unit rate of your gas for the length of your contract, which is usually between one and four years.

This is the cheapest way to get your energy but it means you are tied into your contract for more than 12 months. You can then only switch supplier once you are in your renewal window, which is around six months before your contract ends.

Fixed term contracts are available to all business sizes, but if you run a large business or use a lot of energy you could benefit from these specialist tariffs:

• Flexible contracts: This lets you bulk buy your energy in advance. This can help you take advantage of low energy prices, but you could lose out if you buy when gas prices are high and they later drop.

• Multi site contracts: This fixes the price of your gas when you use one energy company to supply all your business premises. Most suppliers offer a discount for multi site contracts, so shop around to get the best deal.

What is a unit rate?

This is how much you are charged for each unit of gas you use.

Units of energy are measured in kilowatt hours (kWh) and you will pay a fixed price for each kWh your business uses.

Rollover contract

This tariff is automatically renewed until you cancel it. It is the most expensive way to pay for your business gas and is easy to fall into if you do not know when your contract ends.

Your supplier must write to tell you your contract is renewing, but you can cancel if you act within your notice period. This period varies so check with your supplier.

If you are a microbusiness, an energy company cannot rollover your contract unless:

• You have been given between 60 and 120 days' notice of your renewal

• The contract is less than 12 months

No standing charge

Some business gas tariffs come with no standing charge, so you will not have to pay a daily rate for your service.

Most tariffs without a standing charge come with a higher unit rate, so you pay more for the gas you use for a set period of time.

You could benefit from this sort of tariff if your gas usage is very low or your business closes at certain times of year. If your energy usage is high, you may also save money once the unit price of your gas has reduced.

However, a tariff that includes a standing charge may be the cheaper option so shop around to find a deal that works for you.

Green energy

Green energy tariffs use gas from more sustainable resources than most standard tariffs.

Some energy companies pay you for generating your own renewable energy. This is called a feed in tariff (FIT) and you get a fixed payment for every unit of energy you generate.

You can find more information about green energy on the Energy Saving Trust website.

Can you get dual fuel?

Unlike domestic energy, you cannot combine your business gas and electricity under one tariff.

Some suppliers may offer better deals if you agree to buy both services from them, but you still have to get separate contracts for your gas and electricity.

Use our comparison to get business electricity quotes and find the best deal.

Compare quotes

Leave yourself plenty of time to compare quotes from as many suppliers as possible, particularly if you already have a contract in place.

You must give notice to cancel your renewal at least 30 days before the end of your contract, so get quotes ready before this notice period.

Check the terms of your existing contract and be ready to switch your service while you are still within your notice period.

Use our comparison to get quotes from a range of suppliers and get the tariff you need at the cheapest price.

Here is more information on how to switch and manage your business gas