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Business Energy Contracts: The difference between the standing charge and unit rate

When comparing business energy contracts there are two separate rates that you will need to consider, these are the standing charge and the unit rate. By understanding the difference between these two rates, you can determine what type of contract best meets your business’s needs.

What is the standing charge?

The standing charge is a daily amount that you will pay regardless of whether or not you use any energy. This charge is a fixed rate, that can range between 0.20-1.50p per day, depending on the type of meter you have. This charge covers the cost of providing you with an energy supply, plus any additional costs such as maintenance, meter readings etc.

What is the unit rate?

The unit rate is the amount you will pay per unit of energy you use. The amount you pay will vary depending on a variety of different factors such as, your supplier, the type of meter you have, the area you are based in and your business’s usage.

What type of tariff is right for my business?

Some suppliers offer tariffs with a reduced or in some cases no standing charge. However, although this type of tariff may sound appealing, it may not be the best option for your business. This is because usually when there is a lower standing charge, the unit charge is increased. Therefore, if you use your electricity or gas on a regular basis or have a high usage amount then this type of tariff will generally work out more expensive. However, if you have a very low usage, or your business is only in operation at specific times of the year, then this type of tariff could suit your business’s needs.

How can we help?

There are several factors involved in determining which tariff is right for your business, so it may be beneficial for you to speak to a utility specialist who can conduct a full energy market comparison to find the best tariff, with the best rates, for your business.

Watt Utilities is a family-owned utility brokerage located in Manchester. We have a dedicated team of utility specialists, who have helped over 855 thousand business pocket over £120 million in savings since 2000. Our team can help guide you through the process of switching/renewing your utility contract; and as we work alongside a large number of the UK’s leading suppliers we can offer current tariffs at the best rates, that are perfectly suited to your business’s needs.

If you are interested in switching or renewing your business energy contract today, click here!


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