Set up a business energy contract

Overview

Small businesses, including microbusinesses, small to medium enterprises or large businesses need  to set up a business energy contract for the energy their business uses.

Business energy contracts can last for up to five years and you will usually have a contract for each type of energy you use. Most energy suppliers will not let you switch suppliers before the end of the contract.

The amount of energy your business uses is recorded by suppliers every half an hour. This is part of a process called ‘settlement’. This means that suppliers can work out how much energy your business uses instead of it being estimated. The settlement process only applies to certain businesses. Check if the first two digits of your Meter Point Administration Number or Supply Number on your electricity bill start with 05, 06, 07 or 08. If it does, your supplier is taking half hourly readings from your meter.

You can set up a business contract yourself or use a third party like an energy broker. Energy brokers will charge a fee for their service.

Business energy contracts

Deemed contract

You will be placed onto a deemed contract when you move into a new business premises and use electricity or gas before agreeing a contract with a supplier.

Your energy supplier will automatically move you over to a deemed contract if your old energy contract expires and it does not say what will happen after it ends.

Out-of-contract

These are the rates you will pay if your contract says what will happen when your contract comes to an end. An out of contract rate is different to a deemed contract.

Fixed-rate contract

You will pay a fixed price for each unit of energy you use, measured in Kilowatt per  hour (kWh) for the length of your contract. If energy prices go up, you will still pay the same price for each unit of energy you use. But if energy prices go down, the price you pay will be the same. Some contracts may include a condition that means that your supplier can change the rate you pay during the contract. Check if your contact includes any other conditions.

Variable contract

You will pay different amounts for the energy you use based on the cost of energy. This means that the amount you pay can go up or down during the length of your contract.

Rollover or evergreen contract

If you do not change your contract before it expires, your supplier will automatically rollover your contract. This means that you will stay on the same terms and conditions as your current business energy contract. Microbusinesses cannot have a rollover contract for more than 12 months.

If you move to a new contract, you must tell your supplier before the current contract expires.

Using an energy broker

You can use an energy broker to help you find an energy contract for your business. They will charge a fee for this service.

Energy brokers can also help you understand your business energy bills, grants you may be eligible for to help make your business more energy efficient, and advise on ways to make energy efficiencies to your business. They may charge a fee for this advice.

You can find a broker by searching for one or some may contact you directly. Before you choose a broker, you should:

• tell the broker your business energy requirements, for example if you want to only use green energy or suppliers you want to use and not use
• check what their fees include, for example you may need to pay fees for your contract upfront, but some brokers may charge a service fee that is included in the energy bill
• check which suppliers they work with so that they can offer you all the available offers
• check terms and conditions of their service, read how to avoid unfair terms in sales contract on GOV.UK
• check if they will send your offer with terms and conditions before you agree a business energy contract, if you agree a contract over the phone it will be legally binding  and you cannot change your mind

You can also check how well your business energy supplier handles complaints from the Citizens Advice non-domestic energy supplier performance league table.

Problems with your energy broker

If you are not happy with your energy broker, you should try to resolve the problem with them.

If you are a microbusiness, your broker should be signed up to an alternative redress scheme. The scheme offers independent dispute resolution and works with brokers and microbusinesses offering impartial resolution. You can raise your complaint about your broker by contacting either the Ombudsman Services or the Utilities Intermediaries Association (UIA). Check with your broker which scheme they are registered with.

Problems with your supplier

Microbusinesses

If you are not happy with your supplier, you should speak to your supplier and broker if you have one to try to resolve the problem. If you cannot fix the problem, you can try to resolve it through the Energy Ombudsman.

Small to medium enterprises or large businesses

If you are not happy with your supplier, you can take it to be resolved by the civil courts.