Rollover contracts, to put it bluntly, are a rip-off. In our guide, we explore business rollover tariffs, how they work and how to avoid them.

What is a rollover contract?

If you don’t cancel or switch your business energy contract before it ends, most energy providers will automatically transfer you to a rollover contract.

These contracts are usually imposed for a year and tie you to an expensive business energy tariff. This prevents you from being able to access the cheapest energy deals available so are very frustrating for business owners.

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How to avoid them

It is critical to know when your business energy contract is due to finish and what the notice window period is. Don’t wait for your energy supplier to let you know; many providers will not inform you that a letter of termination is required. The only exception is micro-businesses, which thanks to Ofgem regulations, energy suppliers are obliged to contact at least three months before the end of your current contract.

You need to cancel your tariff; otherwise, your energy supplier can legally automatically sign you up to a new rollover contract and new – usually higher – unit prices will apply.

Getting the best energy deal

Once you know when your notice window period is, make a note because this is an ideal time to look for a new business energy deal and avoid a costly rollover contract.

Seeking a new tariff can be confusing and time-consuming because there are so many energy providers to choose from and many companies require bespoke contracts. Business energy switches usually take longer than domestic energy switches, up to six weeks on average.

The simplest way to secure a cheap deal is to compare business energy prices. You may also want to evaluate your business gas tariff too, as switching these at the same time is good practice to have these contracts end on the same date.

Not only do we find you great prices, but we also will handle the switch for you, making the whole process stress-free.

Once you have compared prices with us you can relax, we will let you know when your contract is up for renewal, so you avoid rollover contracts and we will even let you know if a cheaper deal becomes available in the meantime.

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What to do if you’re on a rollover contract

If you have already switched to a rollover contract, your options are limited.

You can try to negotiate with your energy provider, but they are not under any legal obligation to release you.

The exception is if you are a micro business and did not get informed that your contract was ending.

A non-domestic energy consumer is defined as a micro-business, according to Ofgem regulations, if you meet one of the following criteria:

• Employ less than ten employees (or their full-time equivalent) and have an annual turnover or balance sheet no greater than £2 million;
• Consumes no more than 100,000 kWh of electricity per year;
• Consumes no more than 293,000 kWh of gas per year.

If this applies to you and you have been placed on a rollover contract you can take the matter up with your energy provider.