When is the best time to switch business energy supplier?
Energy prices are always changing, and the timing of your energy switch can make a big difference to the rates you pay. The trouble is, the terms of commercial energy contracts mean you can’t actually change energy suppliers until your current contract has come to an end.
But that doesn’t mean your contract’s end date should completely dictate when you switch, and you should run an energy price comparison as soon as your switching window opens.
Confused? Our Bionic guide explains everything you need to know.
When should you switch business energy suppliers?
There’s never really a bad time to switch energy suppliers - what business owner doesn’t want an easy way to cut their overheads? - but, when it comes to commercial gas and electricity, there’s actually a limited timeframe in which you can compare deals and make the change.
If you’re in the market for a new energy deal, the first thing you need to do is find out when your switching window opens.
When your switching window opens
A switching window is simply a designated time frame during which you can compare business energy deals and sign up for a new one.
The length of your switching window will depend upon the supplier you’re with and the type of energy deal you’re on, but it usually starts between one and six months before your current deal is due to expire.
Don’t worry if you’re unsure when your current contract is up, your supplier will write to let you know your deal’s end date. Any correspondence will also include your supplier’s renewal offer - the rates you’re offered at this point are unlikely to be among the most competitive, so you should always compare what else is on offer before signing up for another deal.
Once your current deal enters its switching window, you can get in touch with Bionic’s tech-enabled experts to compare deals and negotiate exclusive rates on your behalf. Although you can’t actually switch at this point, you can agree to a new deal and lock in your rates to help avoid any price hikes. This means your new deal will take effect as soon as your old one ends, and you can avoid being rolled over onto your supplier’s more expensive out-of-contract rates.
A word of warning though - try not to rely on your supplier getting in touch to let you know your contract is coming to an end, as some simply won’t bother, preferring instead to roll you on to their out-of-contract rates.
Switching with Bionic is the simplest way to make sure this doesn’t happen, as our energy experts will keep an eye on your contract’s end date and proactively search for a better deal in time for your switching window opening.
Here’s how our Digital Renewals service works:
- We’ll email you to confirm your details, before searching for the best deals.
- We'll share up to 3 quotes* for you to choose from. If you agree with our recommended option, simply sit back, relax and we'll sort your switch.
- We’ll confirm the details of your next contract when we’ve secured your chosen quote.
For more information, leave your postcode in the box on the right, or give our tech-enabled team a call on 0800 327 7384.
*The number of quotes we send is subject to change, depending upon circumstances.
When you’ve moved into a new business premises
Although switching to a better business energy deal probably won’t be top of your priorities when moving your business into a new property, it’s something you need to sort out at the first opportunity. This is because all businesses are placed onto a contract known as ‘deemed rates’ when they move into a new place, and these rates are always more expensive than any you’ll find on a negotiated deal.
The good news is that you can switch business energy suppliers at any time if you’re on deemed rates, without any notice period and with no termination fees. If you’ve recently moved into a new property, check out our guide to moving business premises.
As soon as possible
Energy prices are always changing, but very rarely drop - although we saw a drop in prices during the lockdown, this bottomed out at the end of July and prices have been on the rise ever since.
"You might think it’s not worth comparing deals as soon as your switching window opens, simply because you won’t benefit from your new rates until your current contract ends and your new one takes over. But that couldn’t be further from the truth - signing up for a new deal at the earliest possible opportunity means you can lock in your rates and avoid any price hikes. This is especially important if you have a long switching window, as prices can increase quite significantly over a six-month period." - Ed Whitworth, Head of Energy Performance.
Business energy switch and contract basics
Before you compare business energy quotes, it's worth taking a quick look at some business energy switch basics, including the terms of your contract and your rights as a commercial energy customer.
What is your switching window?
Your switching window is the earliest point at which you can compare prices and arrange a new deal, and it’s the responsibility of your supplier to let you know when this window opens. As standard, this will be 90 days before the end date of your contract, but timescales can differ so always check your contract. And if you run a microbusiness, bear in mind that the rules around switching are different to those of other SMEs.
However long your switching window, your supplier must provide you with written confirmation of it and also explain their automatic renewal policy and the terms of their deemed contracts.
What happens when your business energy contract ends?
When your business energy contract ends, you'll automatically be rolled onto your supplier’s more expensive out-of-contract rates - to avoid overpaying, you’ll need to run a comparison and switch energy suppliers, or switch to a better deal with your current supplier.
Depending on your supplier, you may be rolled onto a new fixed-term contract – often with slightly higher rates – although this is becoming less common. Alternatively, you might be moved on to a 30-day rolling contract until you formally organise a new one.
When will you get your new energy contract?
There are a number of obligations that every energy supplier has to meet. Once you sign up for a business energy contract, it’s the responsibility of the new supplier to contact you within ten days outlining the full terms and conditions of your contract. This includes when your switching window opens, their automatic renewal policy and the terms of their deemed contracts.
No one likes to read the T&Cs, but it’s worth taking the time to read through and understand them – not least because business energy contracts don't offer a cooling-off period. This means you can’t change your contract once you’ve signed on the dotted line, so it can literally pay to make sure everything is as it should be.
Can you opt out of your automatic renewal scheme?
You can opt out of your supplier’s automatic renewal scheme on the first day of your contract. To do so, you’ll need to write to them once your contract is set up and ask to be removed from the automatic renewal scheme.
This is preferable to being tied into a new long-term contract with higher rates, but forgetting to compare rates and find a new deal within your renewal window will leave you on deemed rates until you organise a new contract.
When you change business energy supplier with Bionic, we can take care of your renewals so you never have to worry about overpaying for energy. Our tech-enabled experts can keep an eye on the date of your renewal window and compare deals on your behalf. If you like the deals we’ve chosen, we can switch contracts without you having to lift a finger.
Are switching rules different if you run a micro business?
If you run a micro business, things are slightly different and you have a bit more time and flexibility when it comes to changing your supplier.
Ofgem rules state that micro businesses need to give their supplier just 30 days' notice before switching. The regulator also states that 60 days before a fixed-term contract ends, your supplier must also get in touch to let you know how much energy you use each year, along with details on how the price of your current deal compares with the new contract prices it’s offering.
If your energy bills are less than £1,000 a month, you’ll most likely be classed as a micro-business, but Ofgem defines a micro business as one that meets at least one of the following:
- Employs fewer than 10 employees (or their full-time equivalent) and has an annual turnover or balance sheet no greater than €2 million; or
- Uses no more than 100,000 kWh of electricity per year; or
- Uses no more than 293,000 kWh of gas per year.
For more information, leave your postcode in the box on the right, or give our tech-enabled team a call on 0800 327 7384.
Can your business energy supplier block your switch?
Your supplier does have the right to block your switch, but only in the following specific circumstances:
- If you owe money to your supplier. If you owe more than £500 for gas or £500 for electricity, your supplier can block your switch until the debt has been repaid.
- If your current fixed-term contract hasn’t ended. Once you sign up for a business energy deal, you can’t switch to a new deal until this one has expired. Even so, you can compare deals as soon as your switching window is open.
- You don’t pass your new supplier’s credit check - You may not realise it, but business energy suppliers always run a credit check to help work out whether or not you are low risk or high risk before they enter into a contract with you so that they can have some assurances that you’re unlikely to default on your energy tariff.
Can you change your energy supplier if you’re in debt?
Before you compare business or domestic energy deals, remember that if you’ve been in debt with your supplier for more than 28 days, you won’t be able to switch until the debt is paid off.
And you won’t be able to compare business energy deals until your current deal enters its switching window, which is usually between one and six months before its end date.
Will your energy be turned off if your business energy switch gets blocked?
The simple answer is no. It’s very rare for a supplier to resort to the lengths of disconnecting a customer’s energy supply.
Disconnection is usually a supplier’s last resort, and most will only do this when all other avenues have been exhausted in trying to recuperate debt from a customer over a considerable time. Before disconnecting your premises, your supplier must make a reasonable effort to contact you, via email, phone and letter.
In addition to an outstanding balance, your supplier has the legal right to disconnect your supply if you have unlawfully altered your premises’ energy meter. An unlawful alteration would be any modification that changes the function of the meter, most commonly to bypass the meter and reduce the amount you’re being charged for energy.
Provided you are not in debt and you have not altered your meter in any unlawful way, then there is very little chance that your supply will be cut off during a switch – even if either supplier chooses to block the switch. In the event that your switch is blocked and your current contract ends, instead of your supply being cut off, your current supplier will move you onto more expensive out-of-contract rates until a resolution can be found, and a new contract is organised.
How long does it take to switch business energy?
There is a perception that switching your business energy is a long and drawn-out process and that any savings that can be made aren’t enough to make it worth the hassle. But the truth is that Bionic’s tech-enabled experts can find a better business energy deal within a matter of minutes, and switching with us could knock hundreds of pounds off the cost of your business energy bills.
The switch itself should only take five working days. Ofgem's Faster Switching scheme (see below) has dramatically cut the time it takes to switch from up to six weeks to just one working week.
But remember, you'll only be switched to your new business energy contract once your current contract has ended. This means if you secure new rates with six months left until your current contract end date, the switch won't actually take place for another six months.
Even so, arranging a new deal at the earliest opportunity makes sense. Customers who renew six months before their contract end date save up to 20% compared to customers who renew close to their contract end date.
Switching times can be affected by the circumstances of your own business or an objection from your current supplier. These objections can happen for a number of different reasons, including:
- If you have an outstanding balance with your current supplier.
- If both your current and new suppliers agree that the switch request was made in error.
- If you have multiple meter points at one premises and fail to switch them all on the same day.
- If termination has not been given to your current supplier.
- If the incorrect contract start date has been given to your new supplier.
If your supplier blocks your switch, they have a legal obligation to let you know why they’re doing so, as soon as possible.
If you choose to switch and you experience switching times beyond six weeks, then you should write to your supplier and ask for a progress update.
Your supplier will have 14 days to respond to your query and if they fail to respond within this time then you should seek to escalate the issue to your supplier’s CEO, who will have an additional 14 days.
If you’re having any issues with your business energy supplier or any aspect of your switch, our business energy experts might be able to help, so it’s worth giving us a call for some guidance.
If your supplier does block your switch, and you feel the reason is not legal, then you should seek to raise the issue with the Energy Ombudsman. The Energy Ombudsman will review the reasons given by your current supplier for blocking the switch, and rule whether they are deemed legal or not before declaring a ruling for all parties.
You can contact the energy ombudsman in the following ways:
Phone - 0330 440 1624
Email - email@example.com
Twitter - @OmbudServices
Website - https://www.energyombudsman.org/
Post - Energy ombudsman, PO Box 966, Warrington, WA4 9DF
Remember, if you're not satisfied with the level of service that you receive from your supplier, then you should look to switch as soon as possible – and the fastest and simplest way to do so is with Bionic.
What is faster switching?
The rules on switching energy are changing. As part of an Ofgem project called 'Faster Switching', the time it takes to switch energy suppliers will be cut from 18 days to just five.
Faster Switching is an Ofgem initiative designed to make switching energy suppliers simpler and more cost-effective for homes and businesses. Switching energy suppliers should now take 5 working days, and the rules apply to both domestic and business energy switches.
- Domestic switches - The time the switch takes will depend on whether you switch within your 14-day cooling-off period. If so, your switch will go through within five working days, but you'll still have time to cancel. If this is the case, you'll need to pay your supplier for the energy they supplied before you cancelled. Otherwise, your switch will take place within five days from when your cooling-off period ends.
- Commercial energy switches - With no cooling-off period on business energy contracts, the switch should take five working days from start to finish. If you choose a date for your switch outside of this five-day period (say your current deal doesn't end for a few months), your new provider will start supplying energy on your preferred date.
What if you’ve been switched to an energy tariff you didn't agree to?
Unlike domestic energy deals, commercial gas and electricity contracts don’t offer a cooling-off period - once you enter into a contract, you’re bound by its terms for the full duration outlined in the T&Cs.
But if you’ve been switched to a new energy contract that you didn’t agree to, it is possible to break the terms of the contract early and transfer back to your old supplier.
If you think that your business energy contract has been switched without your consent, then you should write to the new supplier as soon as possible and let them know your concerns. It’s important to keep written records of all correspondence over this matter - including dates – in case they are needed for evidence.
It’s also a good idea to write to your old supplier and let them know what the situation is. If the switch was made in error, your previous supplier may be able to support your case.
In the event that you have been switched without your consent, the standard procedure is to revert you back to your old supplier on a deemed rate contract. If you have inadvertently switched the wrong meter out of error, then you can be transferred back to your previous meter – provided you have a contract in place with your current supplier, otherwise your supplier may be unable to apply for the meter again.
If this is the case, then you will be reverted back to your old supplier on a deemed rate contract. If you are switched back to your old supplier but haven’t agreed on a formal contract with them, then you should look to switch to a better deal with better rates.
If your current supplier doesn’t acknowledge your initial correspondence within 14 days then you should escalate the issue, in writing, to your supplier’s CEO. If you get no response after 14 days, you can escalate the issue to the Energy Ombudsman who will indecently investigate the issue and make a ruling.
It’s important to be aware that failing to organise a new contract when your current one expires can mean you're transferred onto a new contract, without formally agreeing to it. Fortunately, this is becoming less common, with many suppliers now choosing instead to transfer businesses onto a deemed rate 30-day rolling contract, which means you’re free to switch away with only 30 days’ notice.
How to change your business energy contract
Although you’re bound by the terms of your contract from the moment you sign it, there are certain circumstances that allow you to change certain aspects of your business energy contract.
- A change in circumstances - If the circumstances of your business have changed to the degree where your current contract is no longer feasible, such as a drastic decrease in your cash flow, then you should write to your supplier outlining the change in your circumstances. Remember to keep evidence of all correspondence with your supplier, along with the dates each was sent and any applicable evidence, for your own reference, if required.
- If you need to set up a repayment plan - If your business is in debt and it’s impacting your ability to pay for your energy, then you should write to your supplier and request a repayment plan. Repayment plans are designed to allow you to repay any arrears built up on your account while paying for additional energy you use. But before this can be offered as a solution, you must first provide your supplier with evidence that you are able to pay for the additional energy, while keeping up with the payments on your arrears. Your supplier will refer to your previous payment history when deciding whether you are eligible for a repayment plan. If you have missed a number of past payments, then you are less likely to be offered a plan that allows you to use additional energy.
- If you’ve been moved to a deemed contract - If you’re looking to change the terms of your business energy contract because you noticed an increase in the amount that you’re paying, then it may be worth checking if you have been moved onto a deemed contract. If you are on deemed rates (also known as out-of-contract rates), your supplier may have increased your monthly direct debit amounts to reflect these new rates – but this can be corrected by giving monthly meter readings.
Remember that a deemed contract is used for businesses that have not agreed on a formal contract with a supplier. Typically deemed contracts offer higher rates than the market average so you want to switch away from these as soon as possible. Fortunately, you're not bound by the same rules when on a deemed contract, so you are able to switch to a new deal with only 30 days’ notice.
Ultimately, if you’re not happy with the terms of your current energy contract, and you are not in debt, or struggling to keep up with payments, then it’s best to switch to a new energy deal as soon as your switching window opens.
How to switch gas and electric suppliers with Bionic
Now you know the best time to switch energy suppliers, it’s worth bearing in mind that the quickest and simplest way to change business electricity supplier or switch business gas provider is to let Bionic’s tech-enabled team do the hard work.
One quick call to us is all it takes to have our experts search for the best deals from our panel of trusted suppliers and negotiate exclusive rates - saving you time and money that can be put back into your business.
To see how much you could save, put your postcode in the box on the right, or give our tech-enabled team a call on 0800 327 7384.