Time to Switch-on to Switching

16 December 2016 | Updated 01 January 1970

UK businesses could potentially save £1.7 billion a year by switching gas supplier, says Ken Warner.

Switching gas suppliers could save the nation’s businesses a total of £1.7 billion, according to the Flogas Business Energy Report 2016.

The report, published last month, also discovered that a third of businesses were unaware that savings could be made by switching supplier.

Restaurants, warehouses, offices, shops and factories are among the businesses which could save money but are currently spending a collective 24.4% more than necessary if they shopped around for a more competitive tariff available from other suppliers.

By taking an example of an SME with an annual gas bill of £10,000, the company could save £2,400 a year or £200 a month by changing its gas supplier, the report graphically illustrated the savings which can be made on an individual basis.

With significant potential savings on offer, the question is - why aren’t SMEs switching supplier and cutting down the cost of their gas?

The answer contained in the report matches my experience. Some managers aren’t aware there are savings to be had, yet crucially among those that do, often bosses think it’s too difficult and the savings are not worth the hassle.

Aware but not acting

Almost a third (32%) did not realise savings could be made by switching but almost a quarter (23%) thought it would be too complicated and time consuming to change supplier. Almost one in ten (9%) said they couldn’t be bothered and 13% said switching was on the agenda but it kept being pushed down the priority list. Only 3% of those questioned didn’t realise they could switch, which underlines the issue that many businesses are aware of the benefit but are not taking action.

The critical point here is that the company itself does not have to find the resource nor does it need an employee with procurement skills or energy management experience. By outsourcing to a third party energy procurement specialist, companies tap into the expertise they need without taking the task on themselves. The end result being cost savings and even energy reduction as the right partner will also put together an energy management programme looking at all aspects of usage and ways it can be reduced.

Sense

With the report also highlighting that 54% of businesses think reducing energy usage is a good way to lower costs, it makes sense to compare tariffs and switch providers as well as implementing an energy management scheme.

Businesses also identified a number of other issues with its gas supplier - 24% had problems with international call centres, 28% felt they were left on hold too long when calling their supplier, 17% did not understand their bills and 19% thought the pricing structure was too difficult to grasp.

These issues are all alleviated when using a third party intermediary to manage your supplier. It’s well worth shopping around for the best deals or speaking to third party intermediaries to manage your energy so you can reap the benefits without the aggravation.

By Ken Warner, MD, Energy Renewals

Article written by Ken Warner | Published 16 December 2016