Keeping costs and overheads as low as possible is vital when running a business, which is why it pays to make sure you are on the best possible energy deal.
If it’s been a while since you last switched energy contracts, you could save your business hundreds of pounds a year by moving to a better deal. Here’s how to go about it.
When can I switch business energy contracts?
The earliest you’ll be able to switch business energy supplier is when your existing gas and electricity contract enters its ‘renewal window’. Your supplier should contact you as soon as this happens, but it’s generally one to six months before the end date. If you’re not sure when your renewal window is, give your supplier a ring to find out.
It’s worth mentioning that even if you haven’t reached this stage yet, you can start looking at other energy options. As long as you are within 9 months of your contract end date, we will be able to help you lock in current energy prices.
If you decide not to switch to another contract, you’ll be moved over to your existing supplier’s expensive ‘out-of-date’ contract rates, so it’s worth looking for a better deal as soon as possible.
What about micro-businesses?
Different rules apply for micro-businesses. The maximum notice period for terminating an energy contract is 30 days, while if you’re on a fixed term contract, Ofgem requires suppliers to send a renewal letter around 60 days before your contract ends. This must include details on how much energy you use each year, plus how the price of your current deal compares to new prices.
How do I switch business energy contracts?
You can search for a more competitive energy deal in one of three ways:
- Use a business energy comparison service – you can compare over 150 business energy tariffs with Swoop
- Speak to an energy broker who negotiates business energy contracts with suppliers
- Phone round suppliers yourself to compare prices and contracts
When comparing energy deals, you’ll usually need the following information to hand, most of which can be found on your latest energy bill:
- The name of your current gas and electricity suppliers
- The name of the tariffs you’re on and their end dates
- Your supply types
- How much gas and electricity your businesses uses
Once you’ve found a tariff to switch to, you can get applying. You must inform your existing supplier of the switch as soon as possible and around the date of your switch you’ll be asked for a final meter reading and sent a final bill. Your new supplier should take care of the rest of the switching process.
What type of energy tariff is best for my business?
Separate tariffs will be required for both your gas and your electricity as dual fuel tariffs – where both your gas and electricity come from the same supplier – are not generally available for business energy contracts. However, you can choose both tariffs through the same company.
You’ll also need to decide whether you want a fixed term tariff or a variable rate tariff.
With a fixed tariff, you pay an agreed rate for each unit of energy you use over a fixed term (usually between one and five years). The advantage of a fixed tariff is that you’ll be protected from price rises for the duration of your contract. The disadvantage is that exit fees can be high if you need to get out of your contract early, or you may not even be permitted to leave your contract before it ends.
With a variable rate tariff, the rate you pay for your energy will vary depending on fluctuations on the wholesale energy market. The advantage is that should wholesale prices fall, your variable tariff could also come down in cost (which won’t happen with fixed tariffs). The downside is that variable tariffs can be more expensive.
If you’re looking to boost your business’ green credentials, you might also consider a green tariff where suppliers match some or all of the energy your business uses with the amount they buy from renewable sources, including solar, wind and hydroelectric.
Will I need different tariffs if I have more than one premises?
If you have multiple business premises, many suppliers offer multi-site energy contracts that enable you to combine all of your business energy tariffs into one package with one supplier. This means all your contracts will have the same end date, making them far easier to manage, and you may also save money at the same time.
How long does it take to switch business energy supplier?
Switching business energy contracts typically takes between four and six weeks. During the switchover, there will be no disruption to your energy supply and your gas and electricity will still be supplied through the same pipes and wires.
Note that unlike domestic tariffs, there is no cooling-off period with business energy contracts, so you won’t be able to cancel without penalty if you change your mind.
Rachel has been writing about finance and consumer affairs for over a decade, helping people to get to grips with their finances and cut through the jargon. She's written for a range of websites and national newspapers including MoneySuperMarket, Money to the Masses, Forbes UK, and Mail on Sunday. Rachel has covered almost every financial topic, from car insurance and credit cards, to business bank accounts and mortgages.