Running a business means that you have to think through everything to reduce overheads and increase profit.
And since energy keeps your business operations running, you have to control your business electricity, making it essential to find the best electricity rates as it will greatly impact your overheads. Fortunately, you can easily choose rates that will be within your budget. So here is what you need to know about business electricity rates before committing to a contract.
Understand the electricity rates
Understanding the different types of electricity rates will help you find the one that suits your business best.
1) Fixed-rate
You will be paying a constant and fixed-rate throughout your contract. The main benefit of this is that the rate will stay the same even if the market prices increase. So these prices are not affected by peak rates.
2) Flexible rate
Your utility rates will depend on market trends and may increase or decrease throughout your contract despite the total usage staying the same. The main benefit of this type is that you can enjoy low utility rates when the market rates decrease, thus saving money.
What affects electricity rates?
To find the best business electricity rates, you also need to know the factors that affect them. This will help you use energy more efficiently. Here are the factors that can affect business energy rates.
1) Location
Different regulations are imposed on different areas that affect utility rates. This is why you need to consider your business's location when considering rates.
2) Climate
Harsh climates can increase energy prices. Since during severe cold, the use of heating system increases and in severely hot weather, the use of cooling system increases. This increased usage of energy burdens then utility systems, thus increasing the cost of distributing increased power.
3) Source of energy
The type of energy sources also determines the rates. For instance, renewable energy is more costly than non-renewable energy, despite its long-term cost-saving and greener aspects. But you can get special rates if you switch to renewable energy or combine both types of energy sources.
4) Fuel cost
Fuel is the main thing that providers use to produce and transfer power throughout the areas. So the cost of fuel will directly affect the business electricity rates, as its costs depend upon global supply and demand.
5) Cost of transmission and distribution
Generating and distributing energy is very costly for energy providers. The costs also include the cost of maintenance of systems and facilities. So this cost also affects your business electricity rates.
How to save money on business electricity rates?
1) Find trusted but cheaper providers
There are several electricity providers across the country, so you can easily find the cheaper provider. Even though looking for and finding a cheaper provider will take your time and effort, but the resultant save in money is all worth it. Moreover, you can hire the services of energy experts and let them do this work. They will help you find the best electricity rates and also optimize your energy consumption.
2) Install smart meters
Smart meters accurately record your energy usage and directly send it to your provider at regular intervals in the day. This will help you monitor your energy usage and identify ways to cut down on energy usage.
3) Be wary of office equipment and appliance
Simply reducing a degree or two on heating and cooling system, switching off appliances and lights when not in use, you can save more than you imagine.
Conclusion
Electricity rates fluctuate due to the ever-changing energy market. But it is essential to know how important electricity rates are when running a business. Monitoring electricity usage and finding the cheapest electricity rates can help you save a lot.
