There are a number of different suppliers offering a diverse range of business electricity contracts that suit particular needs, which can make deciding on a business electricity package confusing and a little daunting.

This quick guide will explain the 2 main different types of contracts, however, it should be stated that while there are 2 main types of contracts it is essential to look carefully at the differences between these contracts depending on the company, for example a fixed term contract can offer a different term period depending on the company and package.

Fixed term contracts are the most common business electricity contracts. Simply explained a fixed term contract binds you to a specific energy company for a pre-stated period of time, for example one or two years. There are several reasons why most businesses choose this type of contract; in particular these types of contracts often offer an incentive, such as supplier discount.

However, while these discounts may appear beneficial it is vital to look closely at the small print, it may seem the most inexpensive option at first but the price after the discount period may be more costly than other suppliers. The other advantage of this type of contract is that it can be one the safest options.

A fixed term contract means that you don’t have to worry about the fluctuating prices of electricity; instead you receive a fixed price for the duration of your contract. The disadvantage of this type of contract is that cancelling or changing supplier during the contract will mean that you will receive a considerable fee for terminating the contract. Therefore, it is advisable that you are certain you will be able to continue the contract for the agreed term, if you are unsure it is wise to choose a different contract.

Another popular contract for business electricity is a rolling contract. A large number of energy companies offer rolling contracts, this type of contract renews a businesses contract automatically, unless you contact the supplier to terminate the contract in order to switch to a different supplier before the next term begins. The advantage of rolling contracts is that it allows businesses to change supplier frequently, therefore, they are able to continually choose the lowest price. The disadvantage of this contract is that they can sometimes be difficult to terminate, with some energy companies only offering a termination window of 2 weeks.

These are 2 of the 4 main contracts, the other being dual contracts and deemed contracts. There are a number of different advantages and disadvantages to these 2 contracts, looking carefully when comparing the two will ensure you select the perfect electricity contract for your business.  Find out more about business electricity at www.business-electricity.com