Business energy tariffs are often pitched as simple: a price per kilowatt hour and a standing charge. Easy, right?
Not quite.
Behind that neat-looking number lies a tangle of wholesale markets, network charges, and risk-based hedging that most suppliers would prefer you didn’t ask about. We’re here to change that.
Whether you’re running a single site or managing a 200-site estate, understanding your tariff type isn’t just admin – it’s the first step to controlling cost, risk, and carbon.
The Main Types of Business Energy Tariffs
1. Fixed Rate Tariff
What it sounds like:
A price per unit of energy fixed for a set contract term – usually 1, 2, or 3 years.
Why businesses choose it:
Stability. You know what you’re paying, regardless of what the wholesale market is doing.
What to watch for:
Fixed doesn’t always mean fully fixed. Pass-through costs (like network charges or levies) can still creep in if they’re not locked too.
2. Pass-Through Tariff
Also known as: Part-fixed or semi-flexible tariffs.
How it works:
You pay a (sometimes impressively low) rate for the wholesale energy, and everything else is passed through at cost – network fees, balancing charges, levies, the works.
Who it suits:
Businesses that want to ride market dips, or who have the tools to track and manage consumption proactively.
What to watch for:
Pass-through tariffs are like flying budget airlines – cheap headline price, but everything else is extra. If charges go up mid-contract (as they often do), so does your bill.
3. Flex (Flexible Purchasing) Tariff
Best suited to Larger energy users with half-hourly metering and internal energy management.
How it works:
You (or your energy partner) buy blocks of energy on the wholesale market over time. Costs can be optimised by buying in dips and spreading risk.
Why it’s powerful:
Flex buying puts you closer to the market. Done right, it can beat fixed deals – especially in volatile markets.
What to watch for:
It’s not for the faint-hearted. You’ll need data, risk appetite, and a partner who’s genuinely working in your interest (not just pushing volume).
4. Deemed or Out-of-Contract Tariff
The “oops” tariff.
How it happens:
You move into a new property, forget to renew your contract, or fall off the end of your deal – and suddenly you’re on a sky-high rate.
Why it’s bad:
These are the most expensive tariffs in the market – no negotiation, no control.
What to do:
Get off them ASAP. Even a basic fixed deal will likely be far cheaper.
5. Green or Renewable Tariffs
What they promise:
The energy you use is matched by renewable generation, or your supplier buys renewable certificates (REGO) to “green up” your usage.
Why they matter:
They help meet sustainability targets and look good on ESG reporting – but be careful what you’re actually buying.
What to watch for:
Some tariffs are 100% renewable in name only. It’s worth digging into whether it’s backed by real generation or just certificates.
Tariffs, Usage, and the Value of Using Less
Here’s something most suppliers won’t tell you: your tariff isn’t just about the rate – it’s basedon what you’re expected to use.
Every business is assigned an Estimated Annual Consumption (EAC), and suppliers use that to shape your pricing. Use more than expected? You might get hit with penalties. Use less? You might still end up paying for volume you never consumed – especially on fixed or forward contracts.
And that’s where the system breaks.
At Vester, we help businesses find not just the best price today, but the best price over time – by actually using less. How? Through smarter procurement and smarter operations. That means:
- Monitoring actual usage against EAC and shaping procurement around real-world data
- Deploying on-site generation (like solar) to reduce grid reliance
- Using battery storage to shift consumption to cheaper periods
- And rethinking peak demand to avoid unnecessary costs
Bottom line? We don’t just help you pick a tariff. We help you change the shape of your demand – so you can unlock better deals not just now, but every year after.
Because using less is the ultimate power move.
Which Tariff Is Right for You?
It depends on:
- Your energy usage patterns
- The size and spread of your business
- Appetite for market risk
- Sustainability targets
- How closely you want to track and optimise your energy spend
At Vester, we help you weigh all of this – with the transparency and intelligence the industry usually hides behind “commercial sensitivity.”
Your energy tariff isn’t just a line in your overheads – it’s a lever for control. Choosing the right one means fewer surprises, better budgeting, and smarter sustainability choices.
If you’re not sure what tariff you’re on – or whether it’s right for your business – you’re not alone. Most businesses aren’t told.
That’s where we come in.
We analyse energy bills for businesses like yours every day and we find overspending, hidden fees, and misaligned contracts more often than not.
No cost. No pressure. Just clarity.
We’ll review your bill and follow up with a clear, jargon-free breakdown – no upsell, no lock-in, just facts.