How to Compare Business Energy Quotes

Not all energy contracts are created equal. When you receive quotes from different suppliers (or brokers), it’s important to look beyond the headline price. Here are the key factors and tips to ensure you’re making an apples-to-apples comparison and choosing the right deal, not just the cheapest-looking one:

Unit Rate and Standing Charge: The unit rate (pence per kWh) is usually the first number people focus on – and it’s certainly important. But also check the standing charge (daily fixed fee). One supplier might offer a lower unit rate but a much higher standing charge, which could make it more expensive overall for your usage profile. Calculate the estimated annual cost using both the unit rate and standing charge for your typical consumption. This will give you a true cost comparison. Also, verify whether the quote’s unit rate is fully fixed or if some costs are excluded (more on that below).

Contract Length and Start Date: Are you comparing a 1-year offer to a 2-year offer? Multi-year contracts can sometimes be a bit pricier per kWh, but they lock in rates longer. Make sure you’re comparing contracts of the same length, or at least understand the trade-off. Also note the start date: a quote for a start next month vs. six months from now might differ because the market’s expected to change. If your current deal has time left, ask if the quote’s valid for a future start (and if not, what happens if prices move before then).

Fixed vs. Pass-Through Charges: As explained in our pricing guide, some quotes include all those extras (network, policy costs) in the rate, while others don’t. A quote that seems lower might be “pass-through” – meaning you’d pay certain fees on top. Always check: does the rate include transmission and distribution charges? Environmental levies? Capacity charges? If a salesperson says “it’s all included,” get that in writing. If it’s pass-through, try to estimate what those extras will add (the other guide can help, or ask the supplier/broker for a breakdown). Comparing a fully-fixed rate to a pass-through rate is not a fair comparison – the pass-through might end up higher once all costs are added.

Are VAT and CCL included? Almost always, quotes exclude VAT and the Climate Change Levy (CCL). But double-check the wording. If a quote looks too good to be true, ensure it’s not sneaking those out. For instance, a quote letter might say “Prices exclude VAT and CCL” in the fine print. That’s normal (you can’t avoid those taxes except in special cases), but be aware for your budgeting. The key is to compare the underlying energy costs, then remember you’ll add 20% VAT etc. on any contract.

Termination and Renewal Terms: Look at what happens at the end of the contract. Will it automatically roll you to a new rate if you do nothing? (Many suppliers put you on expensive default rates if you don’t actively renew – we mention this in our FAQ on rollover contracts.) Check how much notice (if any) you need to give to terminate at contract end. Also, see if there are any exit fees for leaving the contract early – some contracts, especially longer ones, might charge a fee per meter if you break it prematurely.

Payment Terms and Fees: Some quotes assume you’ll pay by Direct Debit – and the rate might be slightly higher if you don’t, as some suppliers offer a Direct Debit discount. Also check if there are any other fees: e.g., some suppliers charge a fee for paper billing or for late payments. These are small things, but worth noting. Generally, if you can, opt for automated payments to secure the best rate and smoothest process.

Supplier Reputation and Service: Price isn’t everything. Is the supplier known for good customer service? If you have an issue, you want it resolved quickly. Sometimes a very cheap rate comes from a newer or less stable supplier. Given the recent history of some suppliers going bust, it’s reasonable to weigh financial stability and reviews. You can check customer reviews (e.g., Trustpilot) or ask your broker’s opinion on the supplier’s track record. A slightly higher p/kWh from a reliable supplier that bills correctly and answers the phone may save you headaches down the line.

Green Energy Options: If having renewable energy is important to your business (for sustainability goals or CSR), compare how “green” the contracts are. Some suppliers offer 100% renewable electricity as standard, others for a small premium. Gas may have “carbon offset” options. Make sure you’re comparing like with like – a green tariff vs. a regular tariff is a differentiator. Also, confirm what “green” means (usually backed by REGOs – certificates). Our Green Energy Options guide dives more into this. The great news is these days green contracts are often similar in price to standard ones, so you might not have to pay much more for renewable energy if you shop around.

Broker vs Direct Quotes: If you’re using a broker and also getting direct quotes, ensure you’re not double-counting anything. A supplier might give you a quote directly, and a broker might offer from that same supplier. The prices should theoretically be similar; if not, ask why. It could be timing differences or the broker’s commission. A good broker will be transparent about their fee (e.g., “This rate includes a 0.5p/kWh commission for us”). Also, be cautious of anyone pressuring you to sign immediately “because the deal will expire in an hour.” While market prices do move, a reputable supplier or broker knows that you need a bit of time to make an informed decision. Don’t be rushed if you’re not comfortable.

Apples-to-Apples Comparison: To summarize, line up the quotes and compare these elements: unit rate (and is it fully loaded?), standing charge, contract length, green vs not, any special fees/terms. Normalize them as best as you can. If one quote is for a longer term, consider whether you value price certainty or want flexibility sooner. If one quote is pass-through, try to estimate the full cost. And consider the supplier’s quality, not just the pennies. It can be a bit complex, which is why we help our clients with side-by-side comparisons in clear English. If you’re ever unsure about how to compare two energy offers, we’re happy to do the heavy lifting – send them our way and we’ll translate the fine print and numbers for you.