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How to Switch Business Energy Supplier
The current structure of the UK energy market makes it quite difficult to switch business electricity suppliers when going it alone. However, changing to a new contract could help you save and reduce business costs, making it a worthwhile measure.
In this guide, we’ll provide you with advice on how you could save time, terminate your current contract and initiate a new agreement for a contract better suited to your business and its energy requirements.
The Process of Switching Energy Provider – Overview
Unlike the residential market, it’s not usually straightforward to switch to new energy rates for your business. Every business tariff is for a fixed length of time of at least 12 months. Some contracts last three years or more, and you’re tied to this agreement until it expires.
Thanks to rules set out by the Energy market Regulator Ofgem, smaller businesses receive reminders from their current supplier about contract endings and renewals.
This comes in the form of a two-page letter which includes details about terminating your current contract and the potential pitfalls of ignoring its contents.
If you don’t fall under the “micro business” clauses, then the onus is on your company to manage the terms and conditions set out.
What Happens If I Don’t Switch When My Business Contract Ends?
If you fail to change suppliers or at least renegotiate rates with your current supplier, you are likely to be placed on out-of-contract rates which are notoriously high. These rates can cause an increase of up to 50% on your energy bills and could lead to you spending significantly more than needed for your business energy.
What do I need before comparing business energy?
Before you begin to compare business energy deals, you should ensure that you have a recent bill or your contract to hand. This way you’ll be aware of the amount of energy your business typically needs and you’ll have a clear idea of the potential savings you could make.
How soon can I switch energy suppliers?
It’s usually recommended that you switch electricity providers when your contract ends to avoid any early exit fees. In business, these fees can be high, so you should only switch if the savings you’d make on another deal outweigh the costs for an early switch.
The process for changing energy suppliers usually takes between four and six weeks. You should ensure that your new supplier has all the information they need in order to avoid any delays.
How To Switch Business Energy Supplier
It’s important for you to select the right energy deal for your business, so to help you make the best choice, here’s a list of our top tips for switching business energy suppliers:
- Look at reviews to find out what customers are saying about suppliers’ service.
- Be open to using a smaller, independent supplier as they often offer cheaper rates.
- Use a comparison tool to find out which energy suppliers can offer you the best deal.
- Be wary of renewal offers as they aren’t usually as cheap as rates offered elsewhere
- See if suppliers offer additional services and products such as smart meters, which can be used to help you monitor your energy usage.
In 60 seconds, you can compare business electricity prices and select the tariff that’s right for your company.
There are just three basic steps to change your energy supplier:
The Three Steps to Switch Business Electricity Supplier
- Step 1: Terminate Your Existing Agreement
- Step 2: Check the Latest Prices Available
- Step 3: Move to Your New Provider
Once you have completed these steps, your new rates are effective when your new contract begins.
Step 1: Terminate Your Existing Agreement
If you don’t terminate your existing agreement, your current supplier will extend it for another term.
This extension usually involves an increase in your rates. Increases of 100% have been reported for these follow-on contracts, although 30% increases are more common.
If you don’t exit your contract, you’ll see substantial increases in your unit price and standing charge.
Pitfalls in the Termination Process to avoid
- You only have a specific time to invoke the termination.
- If you don’t terminate, your contract will be rolled over for at least 12 months.
- An expired contract with no new agreement invokes “out of contract” rates.
Rollover and Out of Contract Rates
The worst case scenario for a business owner is if the termination goes ahead, but you haven’t signed a new contract. In these circumstances, you’re in no contract at all, and the energy companies have special rates that they will apply.
These are termed “out of contract” rates, and these are even higher than the rollover rates. These tariffs are the most expensive available and will be paid until you sign up for a new contract.
Most business and commercial customers have energy contracts for fixed periods lasting one year or longer. Within the contract wording, there will be a specific period of time when you can invoke termination and switch to another supplier.
These terms are also shown in your renewal letter that is sent by some suppliers. If you miss these deadlines, you’ll be automatically rolled over for another year.
Step 2: Check the Latest Prices Available
Once you have the termination process in hand, you can start to check for the latest energy prices.
You have the option of obtaining the data yourself, using an online comparison service or using an accredited energy broker. Brokers can often find cheaper deals through their extended relationships with a wide range of energy suppliers.
At Business Electricity Prices, we can quickly help you find the energy suppliers offering great prices for your business and manage the whole process on your behalf.
Ways in Which to Obtain Quotes
Here are the choices you have to find the latest and the best available prices in the marketplace.
- Visit or telephone each of the big six suppliers and ask for a quote. There are other companies available that may offer lower prices, however, this can be time consuming.
- Use an online service of a specialist who has the expertise and knowledge to know the best time of year to strike a deal. If you enter your details here, we’ll find you great energy prices your business.
- Contact an energy broker who can help manage the entire process on your behalf. Their services include pricing; help with reducing your consumption through efficiency and carbon offset credit obligations you may have.
Step 3: Move to Your New Provider
The actual switching process can be longer for a business customer versus the residential market.
Your new contract cannot begin until your existing agreement has expired. If the expiration date is three months from now, then that’s when the new agreement commences.
Obtain meter readings to confirm your final invoice.
The new contract needs to be legally signed by a signatory that’s authorised to do so. There are services that now allow electronic signatures which are accepted by energy companies, although they are limited.
Prices do rise and fall during peak demands for power as the wholesale market adjusts to the UK’s energy requirements.
The winter months usually have the highest prices during the year. Price quotes are usually only valid for 24 hours because of the volatile nature of the industry. If you receive a quote that’s suitable, then it’s best to take advantage of it at that time.
Here’s an overview to switching your electricity:
- Terminate your contract within the terms outlined to avoid rollover contracts.
- Get new price quotes and compare them to find the cheapest available.
- Ensure you sign up to a new agreement to avoid out of contract rates.
If you need any guidance or help, please call our energy team on 0800 690 6008.
Switching Business Energy Supplier FAQs
What kind of energy contracts are available?
Business energy contracts can either be fixed or variable. If your business is on a fixed-rate contract, your energy costs will be the same throughout the year (depending on your usage). However, with a variable rate contract, the costs of energy units can change.
Are dual fuel contracts available for businesses?
You can indeed get both your gas and electricity from the same supplier. However, suppliers don’t usually offer dual fuel deals to businesses, so you may have to open separate contracts.
How much could my business save by switching suppliers?
The savings that your business could make from switching suppliers will depend on the business’ size, the amount of staff and how efficient it is run. If you ensure that your business uses energy efficiently, it could make a significant amount of savings.
What are my meter numbers?
You should be able to locate your meter numbers on your energy bills and invoices, it will also be present on your actual meter. Alternatively, you could ask a broker for this information. For electricity, MPAN is the Meter Point Administration Number and MPRN is the Meter Point Reference Number for gas.
Will my business energy be affected if I change energy supplier?
No, your business energy will not be impacted when you change from one supplier to another as the same lines and equipment will be used to deliver your energy.
What energy suppliers are there to choose from?
There is a large range of energy suppliers that could supply your business’ energy. This includes ‘The Big Six’ which consists of larger energy companies such as British Gas, SSE and Scottish Power; then there are smaller, independent suppliers such as OVO Energy and OPUS Energy. Find out more about the different energy suppliers in the UK by visiting our business energy suppliers guide.
Are there eco-friendly energy contracts available?
Many suppliers offer ‘green’ tariffs where renewable energy is used. This can also involve your energy suppliers matching the electricity you buy with purchases of renewable energy on your behalf.
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