Having a reliable and affordable commercial energy provider is vital to managing a successful business. However, with so many power companies and plans to choose from, finding the perfect energy supplier and policy for your business is easier said than done. That’s why the experts at Navigate Power constructed a guide to teach you about energy-buying mistakes and how to avoid them.
Navigate Power is one of Chicago’s leading energy consulting firms. We specialize in helping companies reduce energy consumption and utility bills without obstructing their efficiency. Our team will teach you new, innovative ways to save energy while reducing your carbon footprint.
Eight Non-Renewable and Renewable Energy Mistakes Your Company Should Avoid
There are numerous factors to consider when shopping for commercial energy. Before committing to a specific provider, you must examine the service quality, reliability, cost, and more. Below are a few prevalent energy-buying mistakes that could adversely affect your business.
1. Ignoring Supplier Quality
Having quality energy is essential for businesses, regardless of the industry. Although energy companies provide similar services, some are better and more reliable than others. When shopping for an energy provider, you must consider the following before committing to a specific supplier.
- The service’s credit rating
- Customer service
- Technology offerings
Reliable energy providers have acceptable credit ratings and provide high-quality, reliable service that meets your company’s needs without burdening your finances. It’s best to obtain three or more provider bids and compare the rates to determine which supplier works best for your company. You can also ask for different price configurations to further your examination.
2. Not Monitoring the Market
The energy industry is a fast-paced, ever-evolving market that’s exceedingly complex, making it difficult for business owners to stay up-to-date on essential data and current trends. However, staying well-informed can help you navigate the energy market while keeping your rates low.
However, business owners shouldn’t focus on current market trends alone. They also need to analyze historical market data to understand the market fully. Once you examine historical and contemporary market data and current trends, you can make better buying decisions that benefit your up-and-coming enterprise.
Also, several online programs can help you stay updated with the ever-changing energy market.
3. Missing Beneficial Buying Opportunities
The energy market is often volatile, making company leaders hesitant to jump on particular buying opportunities. However, waiting too long to buy energy can cause you to miss fantastic energy deals. Conversely, purchasing power too soon can cause you to overpay.
Timing is everything when buying energy. You want to ensure that your internal approvals are in order and you set your targets far enough away from the buying deadlines to get the best deals.
4. Misinterpreting Price Comparisons
Some energy suppliers don’t provide detailed information or explain how they determine their rates, making it hard for company leaders to find the best prices. When comparing price quotes, always check the contract term length and thoroughly research the commodity before agreeing to a specific provider.
5. Not Researching Rates
Business owners must research and compare numerous energy rates to find the best deals. However, many don’t adequately examine prices and can’t make informed decisions when purchasing energy. Thoroughly assessing each service and rate will help company leaders find the best quotes, allowing them to save money on their energy bills.
Utilizing online tools and programs is one of the best ways to assess quotes for multiple energy providers. They provide tons of helpful information, including but not limited to the following:
- Quotes from numerous competitive energy suppliers
- Up-to-date rate changes
- FAQ (frequently asked questions) pages
- Energy management tips
- Educational materials
- Money saving tips
6. Not Understanding the Difference Between Variable-Rate Plans and Fixed-rate Plans
Knowing the difference between variable-rate plans and fixed-rate plans is critical when purchasing commercial energy. Although both plans share similarities, several differences can affect your monthly payments.
Fixed-rate plans provide an all-encompassing per-kWh price over a specific period. This ensures the prices won’t change over the contract term’s duration. However, it prevents companies from paying reduced prices if the market rates fall. Businesses must wait until their contract expires before paying reduced market prices. Most fixed-rate plans also carry a premium for unalterable energy prices.
Variable-rate plans provide similar services but feature key differences that differentiate them from fixed-rate agreements. These plans also offer a comprehensive per-KWh price, but the rates can change depending on the following:
- The market
- The provider’s disclosure statement’s terms and conditions
For example, if your company has a variable-rate plan and the market drops, you’ll pay reduced energy prices. However, if the market climbs, you’ll pay higher monthly rates.
Although the plan’s fluctuating prices make it difficult for you to budget monthly expenses, variable-rate plans can be incredibly beneficial if you keep up with market prices and adapt your business’s energy consumption during peak demand periods.
7. Basing Your Purchases on Opinions
One of the most prevalent energy-buying mistakes company leaders make is basing their power purchases on their opinions. Again, the energy market is ever-changing and often fluctuates without warning. Basing energy purchases off opinions is exceedingly risky since you aren’t sure if the market will improve or worsen after the acquisition.
Before buying energy, ask yourself, “What will happen if the market doesn’t act the way I think it will, and how will I respond to the change?” This will help you plan your approach and decide if the purchase is worth the risk.
You can also hire an energy management expert to help analyze the market and develop efficient buying strategies to make the process less strenuous and risky. They understand the energy market and have vast experience assisting companies across numerous industries to find optimal deals that allow them to save money and reduce energy consumption without obstructing a business’s productivity.
8. Overreacting to Market Fluctuations
Many company leaders overreact when energy market prices suddenly change. Some immediately buy the cheapest energy option, while others assume the rates will decline over time and delay their purchase.
Reacting irrationally to a price change can have multiple adverse effects on your business. Instead of irrationally reacting to price fluctuations, assess the market and history data to determine the best approach. Examining historical data and current trends will help you decide your next move and prevent you from making irrational decisions that could harm your company.
Also, an energy management consultant can help determine the best strategy during a fluctuating market. They will work with you to decide if a purchase is worth the price or if it’s best to wait for the market to drop.
Additional Read: Why Does My Business Need An Energy Budget?
Contact Navigate Power for Professional Energy Consultants in Chicago
If you want to reduce your company’s monthly energy payments without sacrificing productivity, contact Navigate Power. Our team will teach you common energy-buying mistakes and how to avoid them so your business can thrive in even the most turbulent energy markets.
Navigate Power is here for you if you want to learn prevalent renewable energy mistakes or need help traversing the ever-changing energy market.
Contact Navigate Power at (888) 601-1789 and see what our energy consultants can do for you today!