Why Longer Term Business Energy Deals Offer The Best Value
It can be hard for businesses to decide whether to sign up for a short or long-term energy contract. There is a common misconception that securing a longer contract is risky and that, in the long term, you will be paying more. From our observations, this couldn't be further from the truth. A one-year deal, for instance, might offer competitive rates today, but there's no guarantee that prices will remain favourable when it's time to renew.
We have compiled a few reasons why long-term energy contracts are much more cost-effective than short-term energy contracts. However, this may not apply to all businesses, so you should assess your business's needs before deciding. If you need help figuring out what type of energy contract is best for your business then contact us on
0161 521 3400 or
Info@purelyenergy.co.uk and we will gladly assist.
Long-term Savings
One of the most significant concerns for businesses regarding energy costs is volatility. Energy markets are subject to constant change. Global economic conditions, supply chain fluctuations, weather patterns, and geopolitical conflicts can all lead to shifts in energy prices.
By locking in a longer-term contract, your business can avoid price hikes and inflation on your energy bills for as long as the contract is valid. For example, if electricity prices rise by 10% next year, companies on short-term deals will be immediately exposed to those increases when their contracts expire. However, businesses that secured a longer contract will continue to benefit from cheaper rates. This is also why we recommend businesses start shopping around for their energy contracts early (around 6 months before their current contract end date).
Reduced Administrative Hassle
Renewing your energy contract can be quite a long and stressful process at times and involves researching options, comparing suppliers, negotiating rates, and managing paperwork. This can be time-consuming and distract decision-makers from focusing on core business operations.
Longer energy contracts minimise the administrative workload by reducing the frequency of contract renewals. Instead of going through this process annually, businesses can secure a stable rate for an extended period without worrying about the administrative burden of managing their energy contracts.
Budget Certainty and Cash Flow Planning
Fluctuating energy costs can make managing your cash flow difficult. A long-term fixed-rate contract provides a consistent cost for better financial planning. You'll know exactly how much you're paying month-to-month, making it easier to allocate budgets, manage forecasts, and avoid surprises. Stable energy costs can even contribute to stronger credit profiles and financial statements.
Energy Prices in 2025: What to Expect
Multiple factors influence the cost of energy, such as global supply and demand, government legislation, and geopolitical tensions. According to online statistics electricity prices are expected to rise by around 8-12% on average, and gas prices are expected to rise by around 5-15% on average. However, as the UK shifts towards our net-zero goal, we will most likely start to see renewable energy options become more competitive.
Why You Should Fix Your Prices For Longer
Long-term fixed business energy deals are a strategic approach to financial planning. By securing a long-term contract, you can protect yourself from price hikes, lock in great rates for longer and reduce administrative burdens. Exploring three-year deals could be the smartest move for long-term stability and value if your business is considering an energy contract renewal.
How can Purely Energy help?
If you want to know more about longer-term energy contracts or would like help lowering your energy costs, contact us at 0161 521 3400 or Info@purelyenergy.co.uk. Alternatively, get a quick quote.
This article was written by Megan Glover of Purely Energy. If there are any suggestions or questions - Please get in touch with us.
