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How to switch your business energy provider: A guide for small businesses

Not only can switching business energy suppliers save you money, but it's also a lot easier than you may think – and we can help you with the process. Discover how in our dedicated guide

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Switching business energy providers can often help you to save money, so you don't need us to tell you it’s worth investing in the process.

But do you find yourself confused by business energy contracts? Are you hesitant to switch suppliers? If you’re interested in changing energy providers, but need more information on how to navigate the process, we’re here to help.

With so many providers to choose from, and considering the amount of time it can take to get the best deal for your business, it might be tempting to simply stay with your current supplier.

As a dedicated resource for startups, we understand that many small business owners don’t have the time to spend hours online, searching suppliers’ sites and calling for quotes.

Fortunately, there are a whole host of ways you can change business energy suppliers, without you having to do most – or even any – of the heavy lifting yourself. This is thanks to services like Switchd, which can compare deals and change suppliers for you.

Note that as home-based businesses don’t generally need business energy contracts, this article focuses on small businesses with premises. 


When can you switch business energy suppliers?

In order to switch suppliers, you’ll need to know when your current contract is due to expire, and also when it’s available for renewal – this is known as the switching window, or the notice period.

You should be able to find these details on a current bill or contract. In general, you can expect a switching window of somewhere between two to four months – although it’s not unheard of to only have one month, or anything up to six months.

You can start comparing and preparing to switch anywhere up to six months before the end of your contract.

Will you be notified of your renewal dates?

Yes – if you run a micro business.

The Ofgem definition of a micro business consumer is an organisation that meets one of the following criteria:

  • 10 employees or fewer, or FTE (full-time equivalent), plus has an annual turnover or balance sheet of €2 million maximum (approximately £1.8 million, at the time of writing)
  • 100,000 kWh maximum of electricity usage each year
  • 293,000 kWh maximum of gas usage each year

As well as offering a guide to understanding energy contracts for business, Ofgem has also put other measures in place to protect micro business consumers. These include:

  • For fixed-term contracts, suppliers are required to include the finish date and notice period on all bills
  • Micro businesses can inform their suppliers that they plan to switch providers when the current contract expires at any point in advance of the notice period
  • There’s a maximum notice period of 30 days to end a micro business contract
  • Suppliers must let micro businesses know their annual energy consumption amount approximately 60 days before the end date of a fixed-term contract, as well as provide information on how their current rates compare to new deals

However, if you run a bigger business, you’re responsible for checking the renewal dates yourself.

As such, be sure to find out when you can switch, as it’s likely to be the only opportunity to do so. If you don’t switch, you could be rolled over to another contract – and potentially be hit with a hefty hike in prices.

Can you cancel during a contract?

You can cancel during the contract term if:

The latter might have happened if you moved into a new premises, or if your current contract expired and you were put on a deemed/out of contract by default. If this is the case, you can switch any time, and the renewal window and other switching restrictions don’t apply.

If none of these apply, it may still be possible to cancel and switch suppliers – you’d have to contact your current provider to find out, though.

What happens if you don’t switch?

If you don’t switch suppliers, out-of-contract rates will generally apply after a contract ends. These rates tend to be considerably more expensive than in-contact tariffs, which is why it can pay to shop around.


Compare contracts and prices

There are two figures you need to check when comparing business electricity and gas services. These are:

  • Price per kWh (kilowatt-hour) – this is how much you pay per unit of energy, and is generally provided in pence
  • Standing charge – the price you pay each day to receive the service, irrespective of how much energy you use. You’re charged for each service, so your electricity and gas rates will both have individual standing charges

Did you know?

According to Citizens Advice, business energy contracts can be agreed over the phone, meaning you can be signed up to a contract without a signature.

As such, it’s wise to get suppliers to send you a copy of the terms and conditions in writing, so you can review them before getting locked into a contract.

Which information do you need?

In order to compare deals, you’ll need to have:

Meter numbers

  • MPAN (Meter Point Administration Number) for electricity
  • MPRN (Meter Point Reference Number) for gas

You’ll need to know both the MPAN and the MPRN in order to switch your business gas and power.

Energy consumption

  • If you run a micro business, the annual usage should be included on your renewal letter

A lot of the information you’ll need can be found on a recent bill, which should contain:

  • Unit rates and standing charges
  • Energy consumption
  • Meter numbers
  • Contract end date
  • Notice period (when you can inform a supplier that you plan to switch)

You should contact your supplier if you’re unable to locate this information on your bill or contract.

You’ll also need to provide key business details, such as where the energy will be used, including if you require supplies for multiple locations.

Contract checklist

When assessing if a contract is right for your business, review the following things:

  • Length – how long you’ll be committed to the contract
  • Unit price – the agreed amount, and if it’s subject to change
  • Notice period – for ending the contract
  • Extra charges – e.g. maintenance or cancellation fees
  • Cooling-off period – domestic customers have the option to change their mind within a 14-day period of time. This usually doesn’t apply for business customers, but you can ask just in case

What are the different types of contract available?

Fixed term 

The unit price (cost per kWh) is fixed for the contract length, although the monthly prices vary depending on the amount of energy your business uses. Businesses are generally required to sign up for one to three years for a fixed term contract.

Variable rate 

The unit cost differs during the contract, and it’s usually connected to market prices, which are based on demand. The higher the demand, the more you can expect to pay, and vice versa.

Deemed

Also known as out of contract rates, these are usually more expensive options, which tend to apply if a new contract isn’t agreed. They can also apply if you move into a new premises, and use the pre-existing energy supplier without a new contract in place.

28-day contract 

This is an old type of contract, which only applies for businesses that haven’t switched suppliers since the energy market was deregulated in the early 2000s. Although this isn’t relevant for most small businesses, we’ve included it for extra clarity.

Rollover 

This is when your current supplier rolls over your contract if you don’t give sufficient notice for switching.

How to find cheaper business energy rates

  • Negotiate – quotes from other providers can be used to help you thrash out a better deal with your current supplier, or when selecting a new supplier
  • If you ask, your current supplier has to let you know if a cheaper rate is available, but a new contract might be required
  • Discounts may be available if you pay by direct debit, as there’s more guarantee that the provider will receive the payment with this method
  • Consider using a smart meter for more accurate readings
  • Although dual fuel tariffs aren’t available for business customers, if you opt to have electricity and gas from same supplier, you might be charged less – but you’ll still have two separate contracts

Should you get your gas and electricity from the same supplier?

ProsCons
- Possibility of cheaper rates
- Streamline paying your bills
- Quicker process, as you only have to find one provider
- If you already have a provider you use and like, then you can easily add the other supply that you need, if available
- Still have to manage two contracts
- Might miss out on better deals elsewhere
- Less choice
- A supplier offering both types of energy isn’t specialising in just one type, so may have a more general approach

How to find a new business energy supplier

Whether you decide to use a broker, an energy switching service, a business comparison website, or to do it yourself, there are so many ways to find the best deal for your business energy rates.

Note that it’s usually not possible to switch business energy entirely online – you’ll generally need to talk with a provider at some stage in the process. This is because business energy deals are often more complicated than domestic contracts, as they’re based on each company’s individual requirements. 

Use an energy broker

An energy broker is a paid-for service who acts as a mid-point between business customers and business energy suppliers.

When you contact them, you’ll often need to provide your business post code, which the broker uses to compare which deals are available for you. They'll also arrange a brief phone call to discuss your business requirements.

This is the process for using a commission-based energy broker:

  1. You contact the broker and provide the necessary information
  2. The broker contacts suppliers and requests prices, adding on their commission
  3. The broker provides this information to you as one amount (the rate, plus the commission)
  4. The broker usually presents a range of deals to you. While they can advise, it’s ultimately up to you to make a choice. Make sure to clarify anything you’re not sure of, and that you fully understand the tariff before signing up
  5. You agree to the contract, which is usually sent to you via email
  6. The broker confirms the switch with your new selected supplier, with the supply starting the day after your current contract finishes
  7. The broker handles the relevant admin, such as the day you switch
  8. The broker invoices the supplier for your business energy usage
  9. You should be contacted by the broker again once the next contract is due to end

Energy broker costs

As a customer, you won’t directly see the commission, so you might think that a broker is free. This isn’t the case, so be sure to find out if they charge commission (as illustrated in the steps above), or make their money another way – as well as how much you can expect to pay. Not only does it make sense to double check any fees, but it might help to prevent you from using rogue energy brokers as well.

Review how much it could cost you before using an energy broker service to switch suppliers. Energy brokers could use one of the following fee structures:

  • One-off – the broker’s fee must be paid when you sign up to a contract
  • During a contract – the fees are paid within the energy cost, e.g. as commission
  • Proportion of the savings – an amount from how much you’re saving with the deal
ProsCons
- Time-saving
- Brokers can do a lot/all of the work for you
- Can be a good cost-cutting method
- Access to a wider range of suppliers
- First or simple consultations might be free
- Prices can’t be provided online
- One or more phone calls required – this can be time-consuming and unsuitable if you don’t like talking on the phone
- It’s possible that you could find a better deal without them
- Commission-based models might influence which providers are recommended, and how you’re charged

Not sure which broker is best for your business? Compare business energy brokers using this form – it’s quick, easy, and free!

Use an energy switching service

An energy switching service can help you to switch your supplier, either automatically or via an agent. They can help you by choosing from a selection of suppliers that best match your business energy needs, with only minimal input from yourself.

While some services might only help you to switch suppliers, it’s also possible to use others that offer assistance with more aspects of the process.

In this instance, the companies do the work of a broker, plus the actual switching – all to help you get the best tariff for your business energy.

We recommend Switchd because of its lower cost membership fees, as well as its ability to review every tariff available. Plus, it has an app, which is handy for checking your account on-the-go, and apps aren’t available with many other auto-switching companies. Learn more about Switchd services below.

What is Switchd?

Switchd is an auto-switching membership service, and costs £1.99 per month to use.

In order to benefit from the service, you’ll need to provide information about your tariff, including any preferences (such as if you only want to use green energy). This information is then processed by an algorithm, which compares more than 26,000 tariffs.

Once you’ve found the right rate for you, the team starts and confirms the switching process on your behalf.

But it doesn’t stop there – the algorithm continues to keep checking and automatically switching you to better deals, as and when they arise, based on your business information.

According to Switchd, you can expect your energy tariffs to change every six to nine months, and to save around £400 on average every year.

Switchd stands out due to its easy-to-understand process, as well as its transparency around potential savings and how it compares to the competition.

While Switchd isn’t specifically designed for business energy, it’s still possible to use their service to find business tariffs, particularly for small businesses.

ProsCons
- Auto-switching services can continuously monitor for new deals
- They can often manage the renewals process as well
- Speak with experts
- Might have access to exclusive pricing
- Can be a quick process
- Dedicated small business energy switching services are available
- Some may only offer limited assistance, e.g. just the switching process
- Will need to discuss requirements over the phone
- Might not be able to access a full range of suppliers, as it depends on how many tariffs the switching service has access to

Read our guide to the best business energy brokers and switching services for more information.

Use a business energy comparison website

Business comparison websites can offer information about energy tariffs. They often do this as part of a broader range of products, such as insurance and broadband offerings.

Generally, you’ll need to provide your business post code to begin comparing deals, and then your contact information so that a team member can call you to discuss your requirements in more detail. It’s unlikely that you’ll find set prices online, due to the varying nature of business energy pricing.

With this type of service, the comparison site team will compare a range of business energy deals to help you select the best tariff for your business.

ProsCons
- Time-saving
- Often have expert knowledge
- Initial research can be done online
- Can speak with someone on the phone – ideal if you’d like to talk with someone and/or prefer offline communication
- Might be able to access exclusive deals
- Sites might not show all possible suppliers
- Involves talking on the phone

Do your own research

If none of these options appeal, it’s entirely possible to do the research online yourself. We’ve compiled this guide to small business energy comparison to help further whittle down the choices available to you.

With this option, you contact suppliers directly and find out which prices and deals are available. You’ll need to find and review possible providers online, and then call to get quotes.

ProsCons
- Liaise directly with suppliers – no broker fees etc.
- Speak on the phone with suppliers
- Retain control of the comparison and switching process
- Prices aren’t available online – you’ll need to get quotes, as charges vary
- Requires you to call providers to confirm quotes
- Time-consuming
- Can be impractical

How to switch suppliers

Once you’ve found a new supplier:

  1. Your energy switching provider will let your current supplier know that you plan to switch (you can also do this yourself if you'd prefer)
  2. Give the required notice (a fee might apply if you don’t)
  3. Confirm when the new supply will start
  4. Agree to the contract with your new supplier
  5. Pay off any bills, if applicable

Key points to remember:

  • Switching suppliers needs to be done by the business owner, or an authorised person
  • Cooling-off periods generally don’t apply for businesses. This means that you have to be sure of your choice before agreeing to a new contract
  • Take into account the time needed to transfer supply. This is usually in the region of four to six weeks, but it could be up to eight if it’s a more complex switch
  • Suppliers can stop a switch. Generally, they can do this if you’re in debt, or if the current contract is still valid, such as a fixed-term contract that hasn’t ended – your contract should contain more information on this

What happens after switching suppliers?

Once you’ve informed your current provider to stop the supply, your new supplier will provide the energy after your current contract ends.

Meter readings will need to be taken on the day of switching, and these should go to both your previous and new suppliers so that you are billed correctly.


Next steps

We’ve taken you through the process of switching business energy suppliers, covering everything from understanding how contracts and pricing work, to highlighting a selection of different methods. This includes examining whether using a broker, a switching service, a comparison website or doing it yourself is best for your business.

If you’ve decided that an energy switching service is the right choice for your business, and you want to get started straight away, then head over to Switchd and let its algorithm and expert team help you out.

Alternatively, if you’ve decided that energy brokers are the route you’d like to take, but aren’t sure which broker to use, then complete this form to compare quotes for business energy brokers.

Once you’ve provided the key details about your business, you can sit back and let these companies find the best deals for your business energy requirements.

Scarlett Cook
Scarlett Cook

Writer

Scarlett writes for the energy and HR sections of the site, as well as managing the Just Started profiles. Scarlett is passionate about championing equality and sustainability in business.

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