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Can you leverage Commercial Rates for a Home Business?

There are more than 33.3 million small businesses across the U.S. with an astounding 52%  operating out of their home. Juggling home and business energy needs shouldn’t get in the way of your business, and Integrity Energy’s experts can help! Did you know that if your home business meets certain criteria, you can leverage commercial energy rates to achieve significant savings? Follow our guide to discover the qualifications for upgrading your home business to a cost-effective commercial energy plan!  

A Guide to Commercial & Residential Energy Shopping

There are seven main factors that define commercial and residential energy plans. Generally, residential energy plans have fewer variables affecting energy shopping. On the other hand, commercial energy plans are much more complicated to navigate. Home businesses just getting their feet on the ground might find more benefits to a residential plan. However, home businesses experiencing a growth spurt might find switching to a commercial plan more advantageous. Explore the seven defining characteristics of energy plans below to see if your business is ready for a commercial energy solution. 

Comparing commercial & residential energy rates

Commercial plans tend to have lower energy rates than residential plans. This is typically due to the larger demands and energy consumption levels of businesses. Furthermore, businesses typically have much more consistent energy consumption patterns than households. Due to this consistency, commercial consumers enable suppliers to have a more accurate estimation of their capacity levels.  

The shopping experience is different for commercial energy 

Residential customers can compare rates and select a plan independently as there are fewer factors to consider. Residential customers can use an online marketplace, like our sister-site Price To Compare, to receive a straightforward comparison of residential suppliers and rates.  

Shopping for commercial energy plans is a bit more complicated and typically requires the support of an expert, like a commercial energy broker. Commercial energy suppliers take your energy consumption patterns, operational demands, and industry into account when creating a plan tailored to your unique business. Many business owners prefer to leverage the expertise of a broker to navigate these details, providing a clearer comparison of each contract. 

Contract lengths vary between commercial & residential plans

Contract terms and lengths vary considerably between commercial and residential plans. Residential plans typically come with one-to-two-year contract options. This may vary a bit by supplier, but residential plans are typically on the shorter side.  

Commercial plans offer greater flexibility and opportunities to save long-term. Commercial plans can be as short as 6 months, for seasonal businesses. They can also extend to five years or more depending on your customized energy solution. Ultimately, commercial plans offer more options for contract lengths, enabling businesses to lock in a fixed rate and achieve long term energy bill stability. 

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Commercial plans include demand charges

Commercial electric bills often include demand charges, which are based on the highest rate of electricity usage during a billing cycle. Essentially, if your business uses energy during peak demand periods, it may cost more due to high consumer demand. Some enterprises shift operations or production to off-peak periods to mitigate demand charges, keeping energy costs more affordable. Residential plans do not receive demand charges, making them a bit more cost-effective for small businesses just starting out.  

Who pays time-of-use energy rates?

Time-Of-Use (TOU) rates are similar to demand charges, in which a business pays different energy rates depending on the time of day. However, TOU rates adjust on a set daily schedule, unlike demand charges which fluctuate based on daily energy demands. Residential energy consumers can also receive these charges depending on their plan and supplier. 

TOU rates exist to encourage customers to practice conservation during anticipated times of high energy demand. For example, at midnight when energy demand is often at its lowest, the TOU rate is also low. Alternatively, when it’s mid-afternoon on a sweltering summer day, the TOU rate is much higher due to increased air conditioning demands. 

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Protip:

The energy experts at Integrity Energy can help your business avoid unexpected demand charges and minimum usage fees. Request a quote to receive a straightforward comparison of advantageous commercial energy plans!

Navigating minimum use fees for your business 

Another important fee that affects commercial energy consumers is the minimum usage fee. Not all plans have minimum usage requirements, however it could be in the fine print of your business energy contract. Minimum use fees are applied if a customer doesn’t use a pre-determined minimum amount of electricity during a billing cycle.  

Essentially, some retail energy providers (REPs) advertise an exceptionally low commercial energy rate, however it will only be applied to your energy bill if you meet specific usage requirements. For example, a supplier could offer a 10.5¢/kWh if you exceed 10,000 kWh in a billing cycle. However, if you don’t meet that threshold, you might fall victim to minimum use fees, making energy bills more costly. 

Commercial energy plan more customization & benefits

The final major differences between commercial and residential plans are customization options and customer benefits. Residential energy plans generally don’t provide many options for customization, whereas commercial energy plans require customization to meet business needs. 

The customer benefits also vary between energy plan types. Residential energy plans may include energy conservation tips and tricks or provide access to energy audits and other energy-saving resources. Some suppliers also offer reward programs or renewable energy buy-back offers. Commercial customers typically receive additional energy resources and benefits tailored to business energy needs. Many suppliers offer commercial energy consulting services, energy usage insights and other helpful resources to manage energy demand.  

Ultimately, the Most Important Factor is Energy Usage 

With lower rates, longer contracts, and additional customer benefits, commercial energy plans are very appealing. However, becoming eligible for commercial plans ultimately comes down to energy usage. Integrity Energy’s brokers can provide commercial energy plans to at-home businesses that consume 30,000 kWh annually. 

You can find your business’s historic energy usage on your monthly bill or through your online customer portal. On your energy bill, look for a small line or bar graph. It’s often labeled something like “Electric Usage History.” This data is what your energy broker or supplier will use to see if your at-home business is eligible for a commercial energy plan. If your business doesn’t consume enough power to qualify, you’ll likely be directed to a residential energy marketplace.  

Do I Need a Commercial Electricity Meter for my At-Home Business?

Your at-home business doesn’t necessarily need a commercial meter to switch to a commercial energy plan. If your business consumes enough power, Integrity Energy’s team of experts can navigate around your residential electricity meter. However, if your current meter is outdated and needs a replacement, your local utility company can update it to a commercial meter if you prefer.  

How can I get a commercial electricity meter installed?

Contact your local utility if you need to get your electricity meter serviced, updated, or switched to commercial. Most utilities are happy to make the switch and upgrade to a smart meter for you! Simply call your local utility company (not your electric supplier), provide some details about your business, and they’ll handle the rest! Most local utilities can complete the meter switch within 2 weeks. 

You will need to provide your business name, address, contact information, and the Meter Point Administration Number (MPAN). The MPAN, also referred to as your supply number, is a 21-digit number beginning with S. It’s listed on your bill as the supply number under the line item charges section. This number identifies your specific electrical meter, ensuring that the proper location is updated. 

Still Unsure About Your Business Energy Needs? Ask an Expert!

Powering your passion with a cost-effective energy plan fosters your business’s growth. Instead of stressing about your home business’s high energy costs, you should be focusing on what makes it thrive. Navigating a deregulated energy market is no easy task, but Integrity Energy’s experts are here to help! If you’re not sure whether your business qualifies for a commercial energy plan, request a free quote. Our team of energy brokers work with you to understand your needs, providing customized commercial energy plans with the most competitive rates on the market. Contact us to take control of your home business’s energy expenses today!