It’s a question many businesses grapple with, especially in today's fluctuating economic climate: how do you get the best deal on your energy? The recent Ofgem-commissioned research from IFF Research, conducted in 2024, sheds some fascinating light on this very topic, and honestly, it feels like a conversation with a seasoned business owner who's been through the wringer.
The Big Picture: Affordability Still Looms Large
While the report indicates that more businesses are managing to keep up with their energy bills compared to the previous year – a positive sign, for sure – it’s far from smooth sailing for everyone. A significant chunk, over a quarter (27%), are still finding ways to struggle, and a small but concerning 3% have actually fallen behind. What’s particularly striking is how this burden falls disproportionately on the shoulders of sole traders and micro-businesses. They're more likely to report difficulties keeping up with payments, which makes complete sense when you think about their tighter margins.
Interestingly, the research also points to a link between energy literacy and financial strain. Those who feel less confident about understanding their energy usage and bills are more likely to be struggling. And for those who have reached out to their suppliers for help, the support offered, like debt repayment plans, hasn't always hit the mark – only 17% found them suitable. It really highlights the need for more tailored and accessible support.
The Allure of the Switch: Why Businesses Move
So, with these pressures in mind, it's no surprise that switching energy suppliers is becoming more common. A third of businesses reported making a switch in the last year, a noticeable jump from 2023. It seems larger businesses, both medium and large, are more inclined to make the move, perhaps having more resources to dedicate to the process. But for sole traders and micro-businesses, the figure is still a respectable third.
And what’s the driving force behind these switches? The report is crystal clear: price. Over half of businesses (53%) cited that they chose their current supplier because they believed it was the cheapest option. It’s the most straightforward, universally understood factor, isn't it? When every penny counts, finding that best price is paramount.
The Broker's Role: A Helping Hand?
This brings us to the role of energy brokers. It’s quite common for businesses to seek professional help, with over a third (37%) consulting a broker when selecting their current contract. And the feedback from those who used them? Largely positive. Nearly three-quarters (73%) were satisfied with the service they received. The qualitative interviews really paint a picture here: businesses appreciate brokers for their good customer service, their ability to offer tailored solutions, and, crucially, the time they save by navigating the complex market on their behalf. It’s like having a knowledgeable friend who knows the ins and outs of the energy world, saving you hours of research.
Ultimately, while the energy market can feel daunting, understanding what truly motivates businesses – affordability and the promise of a better deal – is key. And for many, a trusted broker can be the bridge to achieving that.
