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When Is The Best Time To Switch Business Energy Suppliers?

If you’re looking to save money on your business’s energy bills, you need to think about switching suppliers. It can be difficult to determine the best time to make the switch, however.

This guide will answer that question for you. We’ll take a look at how to switch suppliers without paying a penalty fee, why you should compare business energy deals before you switch, and much more.

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Why Is Staying On Top Of Your Business Contract Important?

It’s vital that you stay on top of your contract. If you don’t, it’ll most likely be a costly mistake. If you forget to renew your contract or switch suppliers then you’ll roll over onto a deemed contract. The rates for these contracts are around 80% more expensive than fixed-rate contracts.

When Should You Switch Business Energy Suppliers?

If you want to switch your business gas and electricity supplier, you can usually do this at any time. However, if you switch mid-contract, your energy supplier will expect you to pay a large penalty fee.

This means that the best time to find a new contract is during the switching window. This “window” refers to the period when you can start to compare business energy deals and sign up with a new provider without incurring penalty fees.

The duration of the switching window varies between contracts and providers. The first step is to check your business energy contract or speak to your supplier directly to find out when it begins. Generally, the window opens between one and six months before your contract end date.

If you sign up with a new energy supplier during the switching window, your current business energy contract will still be in place until it expires. At that point, your new contract will begin immediately. This prevents you from paying the default rate set by your old supplier.

All business energy contracts allow you to switch business energy supplier during the switching window. Your business energy supplier will usually let you know once you’ve entered the window, but this isn’t always the case. Double-check to confirm when the window starts for your current contract.

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The easiest way to switch business electricity and gas suppliers without a penalty fee is to use the switching window. One thing to bear in mind is that many business energy contracts have a notice period, so you must give your supplier advance warning that you’re planning to switch.

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Why Should I Sign A New Contract Before My Current Contract Ends?

If you don’t agree to a new deal before your current contract runs out, you’ll automatically go onto a deemed contract.

If you’re on a deemed contract you’ll most likely pay higher than average rates – so you should switch to a cheaper business energy contract as soon as possible.

Before doing so, compare business energy deals to find the best option so you can start paying less for your business utilities.

Which Business Energy Suppliers Can I Choose From?

Business Energy Comparison works with all of the leading suppliers in the UK, including E-On, ScottishPower, British Gas, and EDF. You can choose the supplier with the best offer to meet your business’s needs.

Why Do I Need To Switch Business Energy Suppliers?

The best reason to switch business energy supplier is to reduce your business energy bills. Many businesses stick with their current supplier because they believe they’ll be rewarded for their loyalty. Unfortunately, this is very rarely the case.

When you renew your contract with your supplier, it’s highly unlikely that you’ll receive more favourable rates if you’ve been with the supplier for a while. That’s why making a business energy switch is so worthwhile.

Your current contract may also be unsuitable for your business’s needs. Switching to a contract that is more relevant to your business’s requirements is a wise move.

Another consideration is whether or not your current supplier has provided a good service. If not, it’s best to find a new supplier with a reputable good service record

What Is Faster Switching?

Ofgem brought in Faster Switching to make switching suppliers easier and less costly for businesses. It means a business can switch within five working days, as mentioned above. Faster Switching allows you to choose the commencement date for your new contract if you still have a while left on your current one.

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How Long Does It Take To Switch Your Business Energy Supplier?

It often used to take around six weeks to switch suppliers, but now it may take as few as five working days. Still, if you agree to a new contract several months before your current contract’s end date, you’ll still need to wait for this contract to end before the switch takes place.

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Can You Change Your Energy Supplier If You’re In Debt?

If you want to switch while you’re in your debt to your supplier, you can – unless you’ve been in debt to them for more than 28 days. If this is the case, you must repay the debt before you make the switch.

Are Switching Rules Different If You Run A Microbusiness?

You can sign a new contract once the switching window for your current contract opens. The new contract will come into force as soon as your old one ends.

However, if you run a microbusiness, the rules are slightly different. As per the new Ofgem rules, a microbusiness must give their supplier 30 days’ notice before switching suppliers.

Here’s Ofgem’s definition of a microbusiness:

  • A business with fewer than ten employees
  • A business with an annual turnover of less than approximately £1.7 million
  • A business that uses up to 293,000 kWh of gas annually
  • A business that uses up to 100,000 kWh of electricity annually

Once a microbusiness has informed its supplier that they want to switch, the process takes around 17 to 21 days.

As with businesses of all sizes, you should compare business energy deals for small and medium-sized businesses before you switch.

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Can Your Business Energy Supplier Stop You From Switching?

Your supplier cannot prevent you from switching if you’ve entered the switching window and given any required notice. If you’re on a deemed contract, they also can’t stop you from switching.

Still, there are certain scenarios in which a supplier can block your switch:

  • You’re on a fixed-term contract and haven’t yet entered the switching window.
  • You currently owe £500 for gas or electricity to your supplier. Your debt must be repaid before you can switch.

If a supplier tries to prevent a business from switching suppliers, it must provide a valid reason. If your supplier is preventing you from switching for no obvious reason, contact the Citizens Advice Helpline on 0808 223 113.

Compare Business Energy Contracts With Business Energy Comparison

Before you switch your business energy supplier, you should compare different suppliers and different deals. One of the best ways to do this is to use a broker or consultant. They can give you expert advice and help you start saving money on your energy bills.

Switching business energy suppliers is usually beneficial, as it can help your business to save money on its energy bills. However, to avoid a hefty penalty fee, you must be aware of when your contract’s switching window opens.

You also need to check your contract to see if any notice is required. Bear in mind that the rules are different for microbusinesses, which makes it easier to switch if you own a business of this size.

You should never switch before comparing all the best business energy deals on offer. This way, you can be sure that you’re signing a contract that meets the full requirements of your business.

Frequently Asked Questions

How much do businesses pay on average for electricity in 2023?

Below are the figures for the average costs of business electricity in the UK for 2023. The figures include the 20% VAT that suppliers charge for business electricity and the standard Climate Change Levy charges.

  • Microbusinesses using 5,000 kWh annually: Unit price of 30.55p per kWh, standing charge of 40p, cost per year of £1,673.
  • Small businesses using 15,000 kWh annually: Unit price of 31.16p per kWh, standing charge of 45p, cost per year of £4,838.
  • Medium businesses using 25,000 kWh annually: Unit price of 30.95p per kWh, standing charge of 59p, cost per year of £7,952.
  • Large businesses using 50,000 kWh annually: Unit price of 30.40p per kWh, standing charge of 40p, cost per year of £15,346.
  • Industrial businesses using 100,000 kWh annually: Unit price of 29.56p, standing charge of 458p, cost per year of £31,232.

When is it a bad idea to switch business energy suppliers?

You should avoid switching suppliers if the penalty fee you’ll incur is higher than the savings you’ll make by switching. You also shouldn’t switch before you’ve compared suppliers and found a deal that’s better than your current one.