Electric tariffs, defined as the rate at which electricity is sold to a customer, can vary widely by country or locality. Contrary to popular belief, electricity pricing is not constant throughout your area due to electric Tariffs.
Due to that, business electricity rates may come out to be lower than domestic energy due to several reasons: fixed contracts; time of use tariffs; geographical location; Blend and extend Tariffs; Flex approach tariffs; Credit rating; Exchange rates.
Fixed Contracts
In this time of inflation, fixed contracts come especially handy, as they apply the same rates throughout the contract. A fixed energy tariff will ensure that your monthly bill will be roughly the same.
These contracts usually last 18 months, though they can last as long as two or three years. These tariffs offer businesses security and are often some of the cheapest deals.
These are handy for businesses as they do not constantly focus on power saving and can run their operations smoothly. In addition to that, it also offers long-term security.
Time of Use Tariffs
Another reason would be that some companies opt for the time of use tariffs which ensure that the business will get a certain hour of the day where they have to pay less for electricity.
This works for businesses that operate outside of traditional business hours. Businesses will benefit from this if they shift their electricity use.
Businesses can get their jobs done effectively without paying the normal market price as they carry out their functions after hours and get heavily discounted for it.
Blend and Extend Tariffs
Blend and extend tariffs are heavily based on the business’s relations with the supplier. Loyalty between a business and its supplier goes a long way because when businesses have been loyal to the same supplier and have been doing business with them for a long time, the supplier rewards their loyalty by cutting the cost of electricity, which contributes to businesses getting cheaper electric tariffs. Many businesses benefit from this concept as loyal customers and get much larger discounts as more time passes by.
Flex Approach Tariffs
You may relate to buying in bulk during sales at the grocery store. Some businesses tend to buy tariffs like that: At times when the cost of electricity is low, Flex approach tariffs can be a positive investment for the future of a business where they can buy electricity in bulk for several months or even years to come.
This saves businesses the hassle of looking to buy tariffs again and again, and that too at high prices – this saves businesses from a lot of troubles.
Exchange Rates
A stronger domestic currency may reduce the prices of foreign goods to some extent. That said, businesses can import tariffs cheaply from countries with a weaker domestic currency and get more from less.
Businesses get cheaper tariffs through constant loyalty and operations that allow them to buy in bulk or indifferent and cheaper currencies. Time of use tariffs feed the concept that time is, in fact, money, and fixed contracts offer months and years of security and hassle-free operations.
