FSB ‘Voice of Small Business’ Survey Panel
– April/May 2014 Energy Survey
Prepared by Research by Design
Methodology
•
Research findings are based on a survey made available to the FSB ‘Voice of
Small Business’ Panel during April – May 2013.
•
7,984 panel members were invited to take part in the survey designed and
hosted by Research by Design.
•
Fieldwork took place between Wednesday 30th April
and Wednesday 7th May 2014.
•
1,434 responses were received; an 18% response
rate.
Energy Suppliers
Q1. Which of the following best describes how your business's energy is managed? Base: 1,433
How businesses’ energy is managed
Business energy is managed separately to domestic energy
56%
Business energy is incorporated in domestic energy supply
33%
Business energy is included in our rental costs
We generate all of our own business energy (gas and electric)
10%
Survey
closed
1%
Just over half of FSB members manage their business and domestic energy separately. A third state their business energy
is incorporated in domestic energy supply, whilst a further 10% have energy costs included in their rent.
Q2. From which of the following suppliers do you purchase (a) gas and (b) electricity for your business? Base: 457 - 758 (all
indicating a supplier)
Purchasing gas and electricity for business
Gas
•
•
Electricity
Opus energy
Haven Power
25%
24%
22%
21%
19%
15%
14%
14%
10%
8%
5%
7%
5%
4%
4%
4%
3%
4%
2%
2%
0%
British Gas
EON
npower
Scottish
Power
SSE
Utility
From a third
(formerly Warehouse
party or
Scottish and
energy
Southern
broker
Energy)
EDF
Power NI
0%
Other
supplier
This energy
type is not
supplied to
our business
premises
Members purchase their gas and electricity from a range of suppliers with British Gas and EON being the most popular.
Around a quarter of those replying do not have a gas supply.
Q3. Why did you choose to use a third party or broker? Base: 36 (Low base size - Those who manage business energy
separately to domestic energy and use a broker)
Reasons for choosing a third party or broker
60%
14%
10%
9%
5%
To get the best tariff
5%
3%
Lack of time to find Recommendation from Lack of information on Do not understand
best tariff
a peer/ professional
tariffs
how to compare tariffs
Other
The majority use a third party or broker to get the best tariff when purchasing energy for their business.
Unsure
Q4. What type of third party or broker have you used most recently? Base: 36 (Low base size - Those who manage business
energy separately to domestic energy and use a broker)
Type of third party or broker most recently used
An independent broker or consultant
55%
An agent working on behalf of an energy company
18%
An independent energy advice company
Other
Unsure
16%
3%
7%
Around half of those using a third party or broker have recently used an independent broker or consultant. Recently, less
than a fifth have used an agent working on behalf of an energy company or an independent energy advice company.
Q5. How likely are you to recommend using a third party or broker to other small businesses? Base: 35 (Low base size - Those
who manage business energy separately to domestic energy and use a broker)
Likelihood to recommend using a third party or broker
21%
Very likely
40%
8%
Fairly likely
Not very likely
Not at all likely
31%
Most members who use a third party would advocate using one.
Energy tariffs
Q6. Approximately, how much do you spend per year on energy? Base: 802 (Those who manage business energy separately
to domestic energy)
Spend on energy per year
Less than £500
6%
£500 to £999
14%
£1,000 to £1,999
24%
£2,000 to £2,999
13%
£3,000 to £3,999
8%
£4,000 to £4,999
7%
£5,000 to £9,999
13%
£10,000 or more
Unsure
14%
1%
Over half spend less than £3,000 on energy per year with a quarter of members spending between £1,000 and £1,999. On
average, members spend £4,243 a year on energy.
Q7. To what extent do you agree or disagree with the following statements regarding your business energy? Base: 747 to 791
(Those who manage business energy separately to domestic energy)
Base
I find it difficult to compare the tariffs of different
energy suppliers
47%
Switching energy suppliers is challenging
42%
My energy suppliers bills and associated tariffs are
difficult to understand
Strongly agree
Slightly agree
23%
28%
I am aware of the different tariff options available
from my energy supplier(s)
My current energy supplier(s) offers help and advice
on improving energy efficiency
23%
17%
5%
14%
30%
27%
26%
Neither agree or disagree
12%
15%
20%
18%
17%
Slightly disagree
8%
8%
781
9%
7% 3%
777
9%
14%
20%
27%
Strongly disagree
791
10%
4%
11%
747
789
Unsure
Members mostly agree they find it difficult to compare the tariffs of different energy suppliers and that switching is
challenging. Around a fifth agree their current energy suppliers(s) offer help and advice on improving energy efficiency.
Q8. Businesses are currently required to negotiate their energy contracts on an individual basis, rather than being able to pick from
a choice of published tariffs like domestic customers. Given this information how do you feel the introduction of published tariffs
for businesses would affect your company? Base: 804 (Those who manage business energy separately to domestic energy)
Affect of the introduction of published tariffs
2%
Strong positive impact
17%
Slight positive impact
No difference
49%
Slight negative impact
Strong negative impact
32%
Eight in ten FSB members state the introduction of published energy tariffs would have a positive impact on their
business.
Q9. Why do you think published tariffs would have a positive impact on your business? Base: 649 (Those who manage
business energy separately to domestic energy and state positive impact)
Reasons for published tariff having a positive impact
77%
60%
38%
32%
1%
Makes it easier to compare
tariffs
Would make prices more
competitive
Makes it easier to switch
suppliers
Remove the need to use a third
party or broker
Other
Of those FSB members stating published tariffs would have a positive impact on their business, around three quarters
state it would make it easier to compare tariffs. Six in ten believe prices would become more competitive.
Q10. Why do you think published tariffs would have a negative impact on your business? Base: 18 (Low base size - Those who
manage business energy separately to domestic energy and state negative impact)
Reasons for published tariff having a negative impact
67%
38%
33%
17%
12%
6%
Prevents you from
negotiating the best
price
Hidden details may Would drive up prices
prevent me finding the
best deal
Makes it more
complicated to
compare tariffs
6%
Makes it more difficult Will still need to use a
to switch suppliers
third party or broker
Other
For those who state published tariffs would have a negative impact on their business, the majority believe it would prevent
them from negotiating the best price.
Switching providers
Q11. Which of the following best describes your experience or consideration of switching energy suppliers in the past year?
Base: 803 (Those who manage business energy separately to domestic energy)
Experience or consideration of switching energy suppliers
I have switched suppliers
I am currently in the process of switching suppliers
36%
6%
I attempted to switch, but did not complete the process
8%
I am actively considering switching suppliers
8%
I have not switched suppliers
43%
Half of members have either switched, are in the process of switching, or are considering switching energy supplier.
Q12. How easy or difficult was the switching process overall? Base: 285 (Those who manage business energy separately to
domestic energy and have switched energy suppliers)
Ease or difficulty of overall switching process
1%
13%
16%
Very easy
Fairly easy
Fairly difficult
23%
Very difficult
Unsure
47%
For those who have switched energy suppliers, around six in ten found the process easy; around a third found it difficult.
Q13. What has been the impact on your business as a result of switching energy suppliers? Base: 285 (Those who manage
business energy separately to domestic energy and have switched energy suppliers)
Impact on business as a result of switching energy suppliers
Strong positive impact
11%
Slight positive impact
50%
No difference
23%
Slight negative impact
Strong negative impact
Unsure
8%
1%
7%
Switching energy suppliers has had a positive impact on business for over six in ten FSB members.
Q14. Which of the following difficulties have you encountered when switching suppliers, if any? Base: 159 (Those who manage
business energy separately to domestic energy and switched with difficulty or did not complete switching process)
Difficulties encountered when switching suppliers
63%
61%
42%
• Negotiating new rates with competitors
• Too many questions asked
• Time consuming and disruptive
40%
30%
20%
16%
5%
2%
Notice periods Contract terms
Overall the
Lack of
Lack of clarity
for termination and conditions process was too information on
over which
are not clearly
are too
slow
what the
paperwork
stated/ divulged complicated/
process entailed
should be
difficult to
submitted
understand
Asked to
Required to pay
provide copies money ‘up front’
of existing bills
to a new
to a new
supplier
supplier
Other
Unsure
Notice periods not clearly stated or contract terms and conditions being too complicated/ difficult to understand are what
makes the switching process difficult or prevents members from completing the switch.
Q15. Why have you not switched energy supplier? Base: 343 (Those who manage business energy separately to domestic
energy and have not switched)
Reasons for not switching energy suppliers
Satisfied with current deal
35%
Too much hassle
27%
Lack of time to compare tariffs
26%
Lack of information in order to make an informed decision
22%
Deals available are too complex
Cost of switching is too high
12%
2%
Other
Unsure
24%
Tied into a fixed
rate tariff
1%
Satisfaction with current deal is a reason for a third not switching. Over one quarter of members state it is too much hassle
or they have limited time to compare tariffs.
Q16. What are the most important factors when considering a new energy supplier? Base: 801 (Those who manage business
energy separately to domestic energy)
Important factors when considering a new energy supplier
Price
92%
Standard of customer service
44%
Continuity of supply
31%
Ability to monitor our energy usage
16%
Suppliers reputation
14%
Previous experience with the supplier
13%
Recommendation from peers/professional advisors
8%
Avoiding the Big 6 energy Companies
8%
Availability of green/renewable supply/tariff
6%
Advice on energy efficiency
Ability to sell the energy we generate
Other
Unsure
5%
1%
4%
1%
Price is the key driver when considering a new energy supplier. Customer service is important to around two fifths of FSB
members.
Energy market
Q17. To what extent do you agree or disagree with the following statements regarding the energy market? Base: 747 to 772
(Those who manage business energy separately to domestic energy)
Base
There is enough competition in the energy market
Energy companies care about small businesses
Strongly agree
10%
2%
Slightly agree
17%
14%
20%
19%
20%
Neither agree or disagree
31%
3%
747
61%
Slightly disagree
Strongly disagree
772
Unsure
Around half do not agree there is enough competition in the energy market and most do not think energy companies care
about small businesses.
Q18. Which of the following energy efficiency improvement measures do you (a) currently have in place or (b) plan to implement
(or improve) in the next 12 months? Base: 285 - 740 (Those who manage business energy separately to domestic energy)
Energy efficiency measures
72%
'Switch off' policy, turning electrical devices off when not in use
19%
57%
More energy efficient products or machinerys
42%
38%
Staff training to encourage greater energy efficiency
28%
25%
Improved insulation
33%
20%
Monitored energy use
New technology (combined heat and power)
Other
Not taken/ will not take any measures to improve energy efficiency
Currently in place
37%
Plan to implement in next 12
months
3%
14%
3%
4%
13%
18%
The majority of members currently have a ‘switch off’ policy in place to conserve energy. Members are considering energy
efficient products, monitoring usage and improving insulation in the next 12 months.
Q19. Do you know what you pay per unit (kWh) for your gas and electric? If you are unsure you will find this on a recent bill
from your supplier. Base: 579 (Those who manage business energy separately to domestic energy)
Energy pricing
Yes
51%
49%
No
Only half of members are aware of how much they pay per unit (kWh) for their gas or electric.
Q20. What is the cost per unit of energy for your business? Electricity Base: 246
Q21. What is the cost per unit of energy for your business? Gas Base: 79
(Those who manage business energy separately to domestic energy and know what they pay per unit)
Cost per unit of energy for gas and electricity
Gas
Less than 3.00p
Electricity
Less than 10.00p
9%
14%
10.00p to 11.00p
3.01p to 3.50p
24%
18%
11.01p to 12.00p
3.51p to 4.00p
27%
25%
12.01p to 13.00p
14%
13.01p to 14.00p
4.01p to 5.00p
14.01 to 15.00p
More than 5.00p
9%
33%
5%
13%
More than 15.00p
9%
The majority of members pay between 3.51p and 4.5p per kWh of gas and 10p to 12p per kWh of electricity.
Q20. What is the cost per unit of energy for your business? Electricity Base: 246
Q21. What is the cost per unit of energy for your business? Gas Base: 79
(Those who manage business energy separately to domestic energy and know what they pay per unit)
Average cost per unit of energy for gas and electricity
Gas
Average cost: 4.09p
Electricity
Average cost: 11.94p
The average cost per unit of energy for businesses is 4 pence for gas and 12 pence for electricity.