5 Questions Every Business Should Ask Before Signing an Energy Contract
5 Questions Every Business Should Ask Before Signing an Energy Contract https://youtu.be/9AlG3cccZgk When you want to reduce your energy bills
5 Questions Every Business Should Ask Before Signing an Energy Contract https://youtu.be/9AlG3cccZgk When you want to reduce your energy bills
When you want to reduce your energy bills or find lower energy rates, choosing your energy supplier is crucial, and asking the right questions before signing an energy contract is just as important.
With recent energy rate increases, energy costs can represent a significant portion of a company’s operational expenditure, and the terms of an energy contract can have long-lasting implications.
Before committing to an agreement, ensuring that it aligns with your business needs, budget, and future plans is imperative.
At Energy Professionals, we’ve helped countless businesses find and negotiate the best energy contracts. Based on our experience, here are five essential questions every company should ask before signing on the dotted line.
Duration matters. A short-term energy contract might offer flexibility, but long-term agreements can lock in lower rates. Ask your energy advisor about the contract length and understand the terms clearly.
Equally vital are the termination clauses. Can you exit the contract early if your business needs to change or move? If so, what are the penalties or fees associated?
Pro Tip: Look for a contract that balances low rates with the flexibility your business might need in the foreseeable future. The longer the agreement, the more favorable the rates. It’s common for companies to lock in low rates for 2-3 years.
Some energy contracts come with a simple, fixed-rate pricing structure, while others might have variable rates that change based on market conditions.
Ensure you know what you’re committing to. Ask your energy advisor what factors can lead to price adjustments. Are there any additional fees or hidden costs?
Pro Tip: The most common contracts are fixed-rate contracts; however, some market trends and conditions call for a variable-rate agreement. Ask your energy advisor to discuss the energy market with you and what the best price structure is.
Sustainability is not just a buzzword—it’s a business imperative.
Many companies are now looking to reduce their carbon footprint. Consider green or renewable energy options if this aligns with your company’s values or goals. These might initially come at a slightly higher price point but can offer significant long-term benefits regarding sustainability and potential tax incentives.
Pro Tip: Many retail energy suppliers offer green energy rates that are often just as competitive. If you get green rates, ask for certifications or proof of renewable energy sources to ensure the supplier’s claims are genuine. If you would like to know more, watch a three-minute video we made about how to buy Renewable Energy Certificates.
You’re not just buying energy; you’re entering a partnership. As such, it’s essential to know who you’re partnering with. What’s the supplier’s reputation in the market? Can they provide references or case studies? Additionally, gauge their responsiveness. The quality of customer service can make a significant difference in your experience, especially if issues arise.
Pro Tip: Most retail energy suppliers are great options. However, it’s always a good idea to do some research. Check reviews, ask for references, and test their customer service responsiveness before signing.
If you sign a long-term agreement, this might seem far off when you’re about to sign, but it’s crucial. Does the contract auto-renew? If so, at what rates? Are there provisions for renegotiation? Being clear on these points can save you from surprises down the line.
Pro Tip: At Energy Professionals, we monitor your energy agreement and will contact you before its expiration date to give you renewal and competitive energy pricing options.
Choosing an energy supplier is a significant decision that can help reduce your business’s operational costs and environmental footprint. By asking the right questions, you ensure that your chosen contract aligns with your company’s current needs and future ambitions.
Remember, you’re not alone in this. At Energy Professionals, we’re here to guide you every step of the way, ensuring you make informed decisions that benefit your business now and in the years to come.
James Lightning
Senior Editor, Energy Professionals
(844) 674-5465
info@energyprofessionals.com
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