Business energy users are opting for more short term
contracts in response to the current price drops, and hoping that the trends
will be similar when their contracts are up for renewal in the same quarter of
2016. However, Energy Advice Line recommends that you take these cheaper prices
and lock them in to a fixed term contract of a longer length and avoid the risk
of prices going up next year.
According to Julian Morgan, managing director of the price
comparison, switching and advice service for energy consumers, longer-term
contracts continue to be a more viable option than ever for firms as protection
against price fluctuation in a volatile market.
The Energy Advice Line’s latest quarterly review of energy
prices shows that 88% of business customers chose a contract of only 12 months
– a 10% increase on last quarter, with the amount choosing contracts over 12
months falling to 12% from the previous quarter. Regardless of the length, fixing
yourself into a contract is always a good idea as these prices are usually
significantly cheaper than out of contract variable prices.
“Our advice, if you are in the window to agree a contract,
is to snap up the competitive fixed term prices while they are still
available,” Mr Morgan said.
“If you are thinking about hanging on for a cheaper rate and
staying on out of contracts rates hoping that the price reduces in the next
quarter, our advice is to not sit on the fence, but always agree a fixed term
contract to make the most of cheaper prices.” With winter just around the
corner prices will only start to rise as energy use increases.
The cost of electricity has dropped again this quarter, down
to 10.51p/kWh, almost as low at the prices we saw at the end of quarter four
2012. Unfortunately, the wholesale market has not been as friendly very
recently and we have seen a few upward spikes to we do not expect this trend to
continue into quarter three.
Business electricity customers are still preferring to pay
their contracts by Fixed Monthly Direct Debit, which is by far the most
competitive choice from suppliers – over 80% of customers in quarter two chose
this option. While some customers are still choosing to have more control over
their payments and opting to pay on receipt, despite this option incurring a
slight price premium.
Energy Advice Line is the UK’s leading energy price
comparison and switching service exclusively for businesses, and enables firms
to compare the market for the best possible business energy deals within
minutes.
The free service is backed by a team of business energy
experts who provide a complete contract management service including advice
about business energy contracts, how to avoid expensive rollover contracts, and
a renewal reminder.
The Energy Advice Line also campaigns for a better deal for
business energy users from suppliers and have lobbied the government and energy
regulator Ofgem for greater protection from practices such as cold calling.
To access Energy Advice Line’s latest price review video,
visit http://www.energyadviceline.org.uk/eddie.html
For further information, visit http://www.energyadviceline.org.uk