Switching your business energy provider is without a doubt the best method of getting the best deals and cheapest energy quotes. There are now a large number of business energy providers which means finding a great deal has never been easier. To avoid feeling overwhelmed or confused, use this guide to help you with the switching process.
When Should You Switch?
The switching procedure is slightly different when it is a business energy provider being switched as oppose to a home energy provider being switched. It is a slightly more difficult process as there are a few key factors that impact when you are able to switch, these are:
- Size of your business
- Energy usage
- Contract type & length
Renewal Dates and Switching Windows
It is very important to know when the contract you are currently on has its renewal period because around this time is your switching window – when you are able to switch suppliers.
If you don’t know when your contract is coming to an end, your latest energy bill/ contact should clearly display this information. Look for the date of your contract renewal and when the window for switching opens and closes. Keep in mind that depending on the type and length of contract you signed this date may not be for another few years.
The switching window can vary depending on the supplier but generally it is between 60 – 120 days prior to the end of your current contract. However, some suppliers may have a switching period of only 30 days and others may require notice of switching 180 days before the contract end.
You can ask you energy provider for this information if you are unable to find it. Medium to large businesses won’t get a letter about the switching period so it is vital you are aware of the window because it is usually the only opportunity to change suppliers. If you miss it, you could be rolled into another contract and these rollovers are often considerably more expensive. Micro businesses have different rules which we have outlined below.
The Competition and Markets Authority (CMA) found that 45% of microbusinesses were stuck paying for energy on their suppliers most expensive default tariff. This totalled around £180 million a year more than would be paid than on a competitive tariff. Due to this, the rules for microbusinesses have been altered and energy providers now:
- Cannot automatically impose expensive rollover contracts and rollover contracts can be a maximum period of one year
- Must offer a 30 day notice period instead of the previous 90 days
- Must advise microbusinesses on new prices compared with current tariff and renewal letters must show the businesses annual consumption.
- Need to publish prices for commercial customers online making comparing and switching easier
Is my business classed as a microbusiness?
Ofgem defines a microbusiness as meeting one of the following criteria:
- Employs less than 10 employees and has an annual turnover of no more than €2 million, or
- No more than 100,000 kWh of electricity is used per year, or
- No more than 293,000 kWh of gas is used per year.
A business using this amount of electricity or gas would likely be paying in the region of £10,000 – £12,000 a year per fuel type, this figure excludes VAT and Climate Change Levy.
How to Switch Deemed Contracts
A deemed contract is what you would likely be put on if you arrive at new business premises and are put on a contract with the current supplier. Ofgem require that if you are on a deemed contract, your supplier tells you about the other contracts available.
This default contract can be switched at any time without restrictions of notice periods or termination penalties.
Generally, these rules also apply if you are paying out-of-contract rates due to your contract expiring.
Comparing Business Energy Prices
When you are aware of your switching period you’ll want to compare the available tariffs from multiple suppliers in order to find the best prices.
There are two key elements to keep an eye on when comparing prices, these are:
- Unit Prices: Price per kWh, usually displayed in pence. Generally 3 – 6p/kWh is a typical rate for business gas quotes and 10-20p/kWh is a typical rate for business electricity quotes.
- Standing Charges: A daily charge that is paid irrespective of the amount of energy used or if your business is open. The standing charge can vary from 25p/day to £10/day depending on the business size. Note that you see a standing charge on gas quotes and electricity quotes and these will be charged as a separate standing charge for each.
Online vs Energy Brokers?
There’s two ways to compare energy prices. You can either compare prices online or you can use an energy broker. There are pros and cons to each method and it is completely up to you which is better suited to your business and situation. You can even use both if you want to!
Comparing gas and electric quotes online can be done by either using a comparison site or by requesting quotes directly from the energy supplier. Due to the constantly changing energy prices you will often not get an instant online price and it is essential you talk to the potential provider about your business and energy requirements to ensure you choose the best suited contract.
- Best rates are often offered by suppliers
- Quick method of obtaining quotes
- Deals shown might not suit your business
- If you deal with suppliers directly and want to compare the market e.g. request a british gas quote, eon quote, good energy quotes from the suppliers directly it will take time and effort to compare
- Using a comparison site may not compare all suppliers
Business Energy Brokers
A business energy broker will deal with suppliers on your behalf in order to find the best business quotes and deals available. They might help you save money by assisting you to reduce the amount of energy you’re using too. The services of an energy broker come at a fee.
- May handle the switching process from start to finish for you
- Find deals not available online
- Many don’t charge for a basic consultation and advice
- Requires time and usually at least one phone call
- May receive commission for getting you with certain suppliers which can distort their recommendations
- Some energy brokers earn money a margin being added to contracts e.g. quoting you 12p/kWh when the best price is 11p/kWh and keeping the extra as their margin.
Getting the Best Quote
The following information is required for you to find the best business quotes:
- Your electricity meter Meter Point Administration Number (MPAN) and/or your gas meter Meter Point Reference Number (MPRN)
- Your renewal letter stating energy usage
- Previous gas and electricity bills
- Key business and location information
By providing this information you will receive the best and most accurate gas & electric quotes that suit your business’ needs. Once you receive quotes, more money may be saved by:
- Negotiating the price with current supplier
You may be able to get a better rate by talking to your supplier about the rates you are offered if you switch providers and whether or not they can do better.
- Using direct debit to pay
Paying via direct debit will often get you a discount as many suppliers prefer this method of payment.
- Using the same supplier for electricity and gas
If you use the same supplier for everything, there is a good chance of being able to negotiate even lower deals and better business energy quotes.
How to Terminate your Current Contract
Now you have found a great deal that you’re happy with, you will need to tell your current provider of your decision to switch and then you will need to sign up with the new provider. Before terminating your current contract, the following may apply:
- No cooling off period for business contracts: Contrasting to domestic energy contracts, business energy contracts do not offer a cooling-off period. This means that once you have signed your new contract you will not be able to change your mind. Therefore, any negotiations with your supplier should take place before you sign a new contract.
- Exit fees: If you are switching with the required notice period there should be no exit fees.
- Transfer time: The switching process will normally take between 4-6 weeks. It can take slightly longer if the switch is more complicated. If your current contract ends prior to the finalization of the transfer you may be on deemed rates for a short period of time.
Your Letter of Termination
A letter of termination is usually required in order to terminate the contract you are currently on. This will need to be sent to your supplier via recorded delivery. The letter of termination needs to use your company letterhead, business name and registered business address (this should match your contract) and should include:
- Notice that you wish to terminate your contract
- Your current contract number and the end date of this contract
- Your MPAN/ MPRN numbers in relation to the contract in question
- The address of the locations that are being supplied
- A signature from the business owner or an authorized representative
Can I switch energy supplier if in debit?
You can switch if you have been in debit for less than 28 days, this will simply be charged as part of your final bill. If you have been in debit for longer, this will need to be paid before switching. A supplier is able to object to a switch taking place because of debit.
How long does it take to switch gas and electricity?
Switching gas and electricity provider will take between 4 – 6 weeks. This may be slightly longer if you have more complicated needs. On the british gas get a quote webpage they state switching will be complete within three weeks.
Can I switch electric companies?
You can switch suppliers with ease, just check when the switching period is for your current contract. It is during this time you can switch without penalties. Compare electricity quotes online to see if you can get a better deal with another supplier and take it from there.
Who is the best energy supplier?
The best energy supplier depends entirely on your needs. There are many energy providers available and a large number are dedicated purely to the needs of businesses. These will likely offer you better, more tailored tariffs than the Big 6.
Want to switch your business energy provider and get a better deal? We make it easy to compare prices and find the best deal for your business. Simply fill out our online form and we’ll do the rest.