Switching energy suppliers is a little more complicated for businesses, but it still doesn’t have to be a painful process. Most business energy suppliers will automatically roll you over into a new contract, often at higher rates, so it’s essential to keep track of your contract status.
The advantages of a broker
If you want to ensure that the process is managed properly, you can ask a broker to handle it for you. Energy brokers are experts in their field, and have easy access to up-to-date information on every tariff and supplier on the market. With your authorisation, a broker will manage the entire process of contract renewal for you, while keeping you informed of every development along the way. A good broker will keep track of your contract terms, negotiate with your current supplier, and uncover better deals available elsewhere. Using a broker doesn’t have to be expensive either, as many brokers offer a free energy audit, and don’t charge a management fee.
Doing it yourself
If you want to handle the process yourself, then you need to make sure you know your contract inside out. Roll-over contracts fix rates for a set number of years, and these can rise significantly when the contract term comes to an end. As your contract runs down, you’ll have a limited period of time to cancel automatic renewal, or renegotiate with your supplier for a better deal. If you don’t take any action, your contract may renew at a much higher rate than you currently pay. What’s more, your notice period might expire a long time before your contract is due to end, so it’s extremely important to take action before it’s too late. Suppliers can require you to terminate renewal up to three months in advance, so if you want to jump ship to a cheaper supplier, you need to make sure you read the small print on your current deal first.
Following recent rule changes by Ofgem, your current supplier should contact you at least 30 days before the end of the termination window, with details of all your options. On top of that, the maximum your business contract can now be rolled over for is 12 months – even if your original contract term was much longer. If you’re unsure of when the termination window begins and ends on your current contract, your supplier is also obliged to tell you – all you need to do is give them a call.
If you start looking at new suppliers, you’ll need to understand exactly how and what you’re going to be charged. Most contracts come with a daily standing charge on top of a fixed unit rate, while you’ll also be taxed for VAT and the Climate Change Levy (CCL). Some green suppliers will offer deals that give you CCL exemption, but these often come with higher unit rates, so you’ll need to check the figures carefully.
If your business has a high rate of energy consumption, most suppliers will provide you with bespoke quotations, and many of these are only valid for a limited period of time. In these cases, it’s wise to get a variety of quotations during a short period – or provide authorisation for a broker to do it for you. In these cases, using a broker is often the best route as they can liaise with multiple suppliers to ensure you get all the quotes simultaneously so you can make an informed decision. With a number of options on the table at once, you’ll have enough time to make the right decision for your business.