Most businesses in Scotland are in the dark on energy purchasing as new research shows that over half (51%) have never switched suppliers or tariffs, with one in five (21%) not knowing that switching is an option for them.
Two-thirds of SMEs (68%) in Scotland believe they pay too much for their utilities and almost the same number (66%) understand there are savings to be made.
Following recent consumer switching campaigns, the study, published by Utilitywise – an energy consultancy – found that despite feeling they pay too much, Scottish businesses believe there is a lack of understanding about the options or perceived barriers that stop them taking action.
Although one in five (22%) of Scottish based businesses switched in the last year, many others avoided moving to new suppliers and tariffs due to the belief it is not worth the hassle (24%) and the return would not outweigh the time it takes to organise (29%).
When it comes to reasons why business owners in Scotland are reluctant to explore switching, many believe it will take ‘too much time and effort’: 35% fear costs and fees attached to transferring to a new supplier, while an increase in paperwork and form-filling makes 41% of businesses nervous about switching.
Over one in five (21%) even believe that switching will cause a disruption to their energy supply and that they may be left for a period of time with no gas or electricity
Andrew Richardson, Deputy Chief Executive, Utilitywise, said: “There has been much in the news about domestic customers switching to get better energy deals, which is positive in terms of building a competitive market place and educating consumers about energy.
“Businesses in Scotland can do the same and there are real savings to be made. However, it is daunting and more complicated for commercial enterprises to navigate switching as they may have a number of sites, meters and different contracts.”
Nearly half of businesses (47%) in Scotland reported that a feeling of’ ‘taking the power back into their hands’ would encourage them to switch energy suppliers, on top of a financial motivation. A saving of £100 – £200 per year would be enough to encourage (21%) of businesses to switch and over half (59%) already believe they would save up to £300 if they were to switch in 2015.
David Riches, Executive Director for Commercial, Trade and Marketing from the British Chambers of Commerce, said: “Many Chamber members in Scotland are small business owners and have to juggle long-term planning at the same time as running the day-to-day operations of their company.
“Understanding their energy overheads is an important element in managing their business costs effectively. Our research, conducted amongst thousands of Chamber business members across the UK, tells us that many businesses need help when they look to cut their energy costs by switching suppliers.
“Our Affinity Partnership with Utilitywise was established with this in mind. For those Scottish businesses that have saved or foresee saving money through switching, 44% would instead invest in better equipment for the organisation, 21% would inject the cash into additional benefits for the staff and 25% would focus on office upgrades.