What Is The Difference Between Household And Business Electricity Tariffs?

Business electricity is the term used for supplying electricity to the work place. Business electricity is different from domestic electricity in many ways. The tariffs of business electricity are designed in a different manner for responding energy demands of various customers. Some of the major differences between the two of them are as follows:

Reasonable price

The business electricity is supplied generally at cheaper or reasonable rates as compared to the domestic electricity supply. The reason behind this is that the electricity consumed by the business is larger than households. Therefore, it is obvious for many products that when we purchase something in bulk, we get it at cheaper rates same applies to business electricity too.


The VAT rate of domestic and business electricity makes a huge difference. VAT rate charged on business electricity is 20%, whereas the VAT rate charged on domestic energy is 5%.

Contract terms

The contract period for business electricity lasts between 28 days to 5 years. The contract term for domestic energy lasts for 28 days. There are some people to whom a contract of 12 to 24 months is also offered.

Cooling off period

After entering into a new electricity deal, a cooling off period allows you to change your mind whenever you want. The cooling-off period is of 14 days, which domestic energy consumers experience.

The contract is made in order to protect the interest of local households. The domestic households generally come into the contract without having proper knowledge of it. But the cooling-off period is designed to protect them from coming into a contract without adequate knowledge.

Contract objections

If the domestic electricity consumers have imprudent debt, then they might refuse the electricity contract.

The cases in which h a business consumers can refuse energy contract are as follows:

  • They already have a contract for a fixed term
  • The business customers are in debt to the suppliers
  • If the contract demands any additional requirement that is needed

Contract tailored according to the requirement

The business electricity contracts are generally tailored according to the requirement or for various business needs. You don’t need to choose from the list of tariffs that already exist; you can change it according to the needs of a business. The type of deal you come across depends on various factors such as business credit profile and electricity usage.

Tariffs available

It is important to note that the business electricity contracts are for long time duration. The contracts for business electricity generally last for five years or more. There are large numbers of tariffs available in it. It serves as the best deal for the businesses because, under this contract, the energy is purchased in bulk.

Final words

The business electricity contract has a great impact on local consumer’s lives also because they directly come in contact with it. It is necessary to ensure the complete safety of your employees and the general public. A trusted supplier makes sure that these business electricity contracts are conducted with utmost safety and security.