Business Energy

Switching business energy supplier

Changing your energy supplier as a business varies depending on its size. While larger enterprises will need to take out a dedicated business deal, smaller enterprises, known as microbusinesses, may not need to.

First, you’ll need to work out whether your business is classified as a microbusiness and then you can find the right deal for you, potentially making you large savings. Read on and we’ll explain everything.

When can a business switch energy deals?

Switching business energy deals is a little different to switching domestic plans. You can switch business energy deals if you are on a deemed energy contract, which tend to be put in place when you move into new premises or if a new deal has not been agreed at the end of your current fixed plan. It makes sense to switch at this point, as deemed energy contracts can be excessively expensive.

You can also switch business energy suppliers when your fixed term ends. Remember that some suppliers will require notice, even once your old plan has expired. Suppliers have to tell you why they won’t let you switch and explain fully the options you have if your existing deal is over.

What do you need to consider before switching business energy suppliers?

There are a number of key considerations you’ll need to take into account before switching:

• Cost - with energy prices still high you may decide to fix your plan, especially if you are operating on a very tight budget. That said, a variable plan may be preferable if rates do start to fall even more sharply.
• The kind of enterprise you run - if you’re in the office during the day, you’ll need a different plan compared with places that open late. Speak with your supplier about specific tariffs
• What equipment you have - card machines and tills are not going to cost as much to run as machinery or cooking equipment. Sometimes, dedicated meters for high usage are required.
• Fixed or variable - the latter will change as prices do, while a fixed plan may work out more costly, but does at least help you budget more specifically
• Renewal periods - suppliers often only let you renew towards the end of your deal, usually from one to six months
• Installing a meter - if your new space doesn’t have gas or electricity, you’ll need to pay to have it installed
• No cooling-off period - Unlike with household energy, commercial energy contracts don't come with a cooling-off period. That's why it's important to talk through your options before you sign up with a supplier.

How to switch business energy suppliers

Switching business energy suppliers isn’t as easy as changing your domestic plan. But that doesn’t mean you shouldn’t do it.

Here at MoneySuperMarket we can compare the best rates available for your business via a simple postcode search. We have access to deals from major providers that cannot be found elsewhere.

We have teamed up with the business energy experts at Bionic to make the process as easy as possible for you and your business. Once you’ve found a deal you like, call them on 0800 088 6986. They’ll be able to check over all the deals available and help you make the switch, taking you through every step.

Gas and electricity for microbusinesses

If you run one of the UK’s many microbusinesses, then you’ll be glad to know you now have more freedom when it comes to arranging a better business gas or electricity contract, than other SMEs and larger businesses.

All you need to do is ensure you arrange a new deal while you still have more than 30 days remaining on your current business energy contract.

Don’t worry if you’re unsure when your current deal ends as, around 60 days before your energy contract is due to expire, your supplier is required to get in touch with you to let you how much energy you use each year, and provide details on how the price of your current deal compares with any new deal on offer.

Ofgem, the energy regulator, says having this information puts businesses in the ideal position to negotiate a new deal when their current contract is close to expiring, enabling them to either agree prices either with their existing supplier or sign up to a new one.

If you’re on a fixed-term contract, you can find the end-date and notice period on any bill. And you can tell your current supplier that you want to switch at any time before the notice period begins.

What is a microbusiness?

Your business is classed as a microbusiness if:

• It uses less than 100,000 kWh of electricity a year OR
• It uses less than 293,000 kWh of gas a year OR
• If has have fewer than 10 employees (or their full-time equivalent) and its yearly turnover, or yearly balance sheet, is not more than €2 million.

What does this mean for firms who want to switch?

The net effect of the Ofgem changes is that microbusinesses are no longer restricted by short, rigid timeframes when it comes to arranging a new energy deal.

Before the changes took effect, businesses that wanted to switch to a better deal had to do so in a specific timeframe, known as a switching ‘window’, which was defined by their existing supplier.

A business would have to use the window to arrange a new gas or electricity contract that they would switch to when their current deal expired.

The issue with this window was that it varied from supplier to supplier – consistency was lacking, and windows typically lasted anywhere between 60 and 120 days. To make matters more complicated, different suppliers opened their respective switching windows at various points in the life of the existing contract.

If a business missed this window, it was rolled onto – and tied into – a more expensive energy contract, which would normally last a minimum of 12 months. In short, missing the window could prove to be particularly costly.

If your business doesn’t meet the requirements of a microbusiness, and is classed as an SME or large business, these new switching rules will not apply, and you’ll still be bound by a switching window. To find out more, check out our complete guide to business energy.

What are the latest microbusiness energy rates?

All business energy deals are designed to meet the exact needs of your business. The rates you're offered by business energy suppliers will depend upon a number of things, including the amount of gas and electricity you use each year, as well as how and when you use it. Suppliers will also look at the location of your business and its size.

To give you an idea of the rates you could be offered, here are the latest microbusiness energy rates.

Note: Prices are correct as of May 2024. Rates and bill size may vary according to your meter type and business location. The prices you’re quoted may be different from the averages shown. The figures shown are the average unit rates and standing charges quoted by Bionic per business size from May 1 to May 7, 2024.

How to switch microbusiness energy supplier

If you're a microbusiness owner looking switch suppliers, it's recommended that you contact a broker a couple of months before your existing contract expires – as a rule of thumb, start comparing as soon as your current supplier gets in touch with a renewal offer.

This will enable brokers to compare prices and present you with an accurate quote for a new contract that you can switch to when your current deal expires – and a good broker will set this up on your behalf.

If you're not currently in a contract – or an old one recently expired – then you should arrange a new deal as soon as possible in order to secure cheaper rates and minimise your bills.

If you’re currently on a deal that doesn’t suit your business, or you think you’re paying too much for your gas and electricity, give the tech-enabled business energy experts at Bionic a call now on 0800 088 6986, or request a call back by leaving your postcoide.