Updated: April 03, 2020

How to Choose a Business Energy Supplier

Wondering whether it's time to switch energy suppliers? This guide outlines all the key factors your business should consider

Get Started

No impact on your credit score

Craig Watson

Author: Craig Watson - Commercial Energy Expert

Updated: April 03, 2020

If your business is looking for a provider to deliver its gas and electricity needs, this guide has the information to help you make an informed decision about choosing or switching your energy supplier.

We explain what to look for in your business gas and electricity contracts, how switching commercial energy suppliers could get you a better deal, how to get out of your current contract, and more.

Getting your commercial energy supply sorted

The first thing to understand when it comes to sorting your business gas and electricity supply is that although you can get your fuel from the same providers, there are fundamental differences between commercial and domestic energy contracts.

These are the main factors which will make your business gas and electric different to that of your home:

  • Business energy prices are often cheaper – Business energy is bought in bulk rather than on a month-by-month basis. By buying enough energy to last your entire contract, commercial energy companies can often sell your gas and electricity to you at a cheaper unit rate. The downside of this is that it may be more difficult or expensive to exit your contract early.
  • Energy contracts tend to be longer – Business energy contracts are sold for an agreed time. Although you can get fixed or variable tariffs, the term is generally rigid. This means you won’t be able to shop around for a better deal until your current contract reaches a ‘renewal window’, during which you will have between one and six months to find another deal before your contract ends.
  • Businesses don’t get a cooling-off period – If you switch your domestic power supply it takes less than three weeks to complete and you get a 14-day cooling-off period when you can change your mind with no penalty. With your business energy, you won’t get this luxury and so it’s vitally important that you’re 100% happy with the deal you’ve got before you sign any contracts.
  • You have to buy your fuel separately – Dual-fuel deals can save you money on your gas and electricity if you’re a domestic customer but as a business customer you will have to get a separate quote for gas and electricity, although it is possible to use the same provider.
  • You won’t find an off-the-shelf tariff – Energy suppliers assess business needs on a case-by-case basis and offer bespoke business energy quotes based on the information you provide. This means you can be sure you’re getting a quote which will cover your energy needs but it can make collecting and comparing quotes time-consuming. This is where using a broker can help.

We work with independent energy brokers who can gather all the required information about your business and then shop around to find the best-priced deal which suits your commercial energy needs.

Make an enquiry and we’ll connect you for a free, no-obligation chat so you can find out what is involved.

Speak to a expert today

Get Started

Commercial gas and electricity suppliers in the UK

When it comes to supplying power to your UK business, there are many gas and electricity suppliers you can choose from. Since commercial energy is bought in bulk, you should shop around to find the best quote, but there are other things you may wish to consider, as well as price.

You might want to know how good their customer service is? Will they be as responsive as you need in an emergency? And how green is their power and business ethos?

The biggest, most popular commercial and domestic energy suppliers in the UK are:

  • British Gas
  • EDF Energy
  • E.On
  • N.Power
  • Scottish Power
  • SSE

But don’t automatically assume that they will give you the most competitive quotes to supply your business. In the past few years, there have been several new energy providers entering the market and they are working hard to get your business, not only by offering quotes which stack up, but also by offering a modern and agile approach to customer service and their business ethics.

Save a heap of hassle and legwork and get an independent energy broker to get quotes from the well-known ‘Big Six’ corporations and they’ll also get you comparison quotes from some of the best independent firms.

Get in touch for a free, no-obligation chat and we’ll introduce you to one of the independent brokers we work with. They will discuss your business gas and electric needs with you before going off to collect quotes from those suppliers they believe will provide the service you need at the most competitive price and contract terms.

Micro-business suppliers

Over 4.4 million UK firms are defined as micro-businesses; defined as having fewer than 10 employees or less than £1.8 million in turnover. Changes in contract terms suppliers provide to these firms must be clear on when a contract is coming up for renewal.

Ofgem introduced changes to ensure micro businesses had plenty of opportunities to make a switch and benefit from a better contract price. They insist that suppliers give the contract end date on all bills for fixed-term contracts. As well as this, smaller businesses are allowed to inform their supplier that they intend to switch any time before the notice period.

Ofgem now also stipulates that contracts starting on or after 30 April 2015 have a maximum notice period of 30 days. And 60 days before the end of a fixed-term contract, suppliers have to let the smallest firms know how much energy they use on an annual basis and detail new prices compared to their current deal.

Thereby enforcing that current suppliers must give the smallest companies full details about their energy usage to help them find more competitive quotes elsewhere. There’s a huge range of pricing options available, to help companies of this size keep costs low.

If you haven’t shopped around for quotes in over 12 months, and have instead allowed an existing contract to renew, your rates will almost certainly have been hiked. In the worst case, they could have risen by as much as 60%. And that’s going to hurt.

To maintain your current rates or protect yourself from inflation increases, don’t fall into the easy trap of inertia. This is what energy suppliers rely on! Fight back and make sure you’re not overpaying by checking your contract end date and ensuring you’re on a tariff that’s price effective for your business.

If you’re too busy keeping your business running to have time to collect and compare quotes for your gas and electricity contracts, use an independent energy broker. We can save you more time by introducing you to an expert with a wealth of experience helping businesses just like yours.

Home-based business gas and electricity

If running your business from home doesn’t require a huge amount of energy, you’re probably better off with a regular domestic gas and electricity deal. However, if you use a lot of energy to power your business, it might be worth considering a commercial contract.

For example, running a laundry service requiring multiple washers and dryers which run simultaneously every day will need more electricity than using your laptop and the internet.

Solutions for large businesses

If you operate a large business, perhaps operating in multiple locations, you’re likely to have different needs and requirements to smaller operations. As a large business with higher demands on gas and electricity, you’ll want to ensure you have a strategy in place to control costs and efficiency.

Commercial gas and electricity suppliers are aware of these needs and offer flexible solutions, including:

  • The option to buy directly from the wholesale market or join other business through a collective buying scheme
  • Energy management systems designed to help you implement and measure efficiencies across multiple sites
  • Half-hour meter pricing allowing you to measure your business electricity kwh usage to help with regularised measurements, annual renewal expectations and reporting
  • Access to energy brokers who can be employed to find the best electricity solutions for your business, taking all your company requirements into account

We work with independent energy brokers with access to every energy supplier in the UK. Get in touch for a free introduction and business health check.

Switching business gas and electricity suppliers

Changing your business gas and electricity supplier is relatively easy, these five steps are good pointers to help make sure you never end up overpaying for your power supply:

  • Check the termination dates on your current contracts – it’s good practice to make a note at the time you agree to a new contract so that you can factor in plenty of time to make a switch next year.
  • Officially terminate your current deals in writing via email, letter or fax inside the fixed notice period, which you’ll find stated in your contract – By making a note of your fixed notice period in your company diary, you can save yourself the stress of having to remember to do this on an annual basis. Build it into your plans and it will relieve the pressure.
  • Get business gas and electricity quotes either directly or through an energy broker who will take care of all the legwork and make sure you’re getting the best available deal – Keep a record of the energy broker who helped you get the right deal last time and put in your call knowing they already understand your business needs and know how to get you the right deal.
  • Sign the new contract from the supplier of your choice and return it
  • Your new supplier may want to carry out credit checks to assess the risk of non-payment. If you have recently had a change of tenancy agreement, this could be problematic as such events tend to be more likely to lead to a rejection

Business energy rates

The rates you will be charged for your business gas and electricity will depend on the type of contract you’re on.

There are four main types of contract you could choose from:

  • Rollover contract: Your business energy contract will renew automatically until you contact the provider to cancel it. Cancellation often requires at least 30 days’ notice. If you’re on a rollover contract, you’re more likely to be overpaying for your electricity supply.
  • Fixed-term: Gives you a set rate over a defined period of time. Fixed-term contracts have the advantage of giving you certainty over the cost of your electricity, regardless of what happens to the price of fuel.
  • Deemed rates: This is a tariff for businesses who have moved to new premises and inherited a supply without agreeing a specific contract. If your business is in this situation, switching to a bespoke deal as soon as possible could mean you’ll save any unnecessary costs.
  • Flexible: This type of contract allows you to be flexible about how and when you buy your business electricity, often split into months, quarters or seasons. These deals are typically for larger firms wanting to minimise the risk of buying multiple-years’ worth of energy in one go.

Fixed business energy

Fixed business gas and electricity tariffs allow you to pay a pre-agreed rate for your energy for the duration of your contract. Rates on these contracts are usually competitive but if you want to sign up for a fixed rate, it’s wise to carry out a thorough market comparison to make sure you get the best available deal.

We work with independent energy brokers who can do all the legwork for you. With their inside knowledge and expertise they will be able to assess your business needs and find a fixed contract which is best for you and your business needs.

Energy contract renewals

You will receive a renewal letter from your current supplier a few months before your contract end date. Once you’re inside your renewal period you won’t be charged for leaving your current provider early. You’ll usually have around 90 days to find a new, cheaper, contract, allowing plenty of time to make a switch to a new supplier.

While it’s possible to start saving huge amounts by switching your energy supplier at any time of the year, when your contract is due for renewal is the absolute best time to find out how much you can save on your business gas and electricity.

To take advantage of your contract renewal period you should act quickly; if you miss your renewal deadline and get rolled onto your current supplier’s more expensive tariff it’ll cost you more to switch away.

Getting out of your contract

The way the UK energy market is structured means getting out of your business gas or electricity contract isn’t as straightforward as switching away from a domestic utility agreement. Your business energy contract will be set for a fixed period of time, usually 12 months, although some commercial contracts run for as long as three years.

Your business will be tied into the contract until it expires. When your contract enters the renewal period you will be informed by letter, but if you want to get out of your contract before this renewal period, you should expect to be charged.

There are a handful of business gas and electricity suppliers who don’t have draconian exit charges. To find out the kind of rates you could get with this no-exit-fee benefit get in touch to speak to one of the independent energy brokers we work with.

Cancelling your contract

To cancel your gas or electricity contract, send a termination letter. You can send a letter of termination at any time, but you’ll face charges if you cancel your contract before you’re inside the renewal period. By diarising your contract end date you’ll be ready to send your termination notice inside the required timeframe without incurring additional costs.

Your termination letter should:

  • Be written on your company letterhead or be sent from your business email address
  • State your account number
  • Be signed by someone the energy supplier will recognise
  • State clearly “please terminate our gas/electricity contract when it ends on [insert end date]

Should you fail to cancel your existing contract and it expires before you have acted, your current supplier will automatically extend it for another term. While you may think this is fine, after all, you’re not going to get cut off without power, the rates will almost certainly increase and you’ll be stuck until you sign up for a new contract.

Additionally, if you exit an energy contract which has renewed automatically, you’re likely to face a charge.

If you have questions about how to get out of a contract which has automatically renewed or would like to talk to a broker about which kind of energy contract would be best for your business needs, talk to one of the experts we work with.

As independent commercial energy brokers, they will be able to help you find the perfect energy deal for your business.

Can I manage my gas and electricity online?

Yes, in this digital world almost all business gas and electricity suppliers have the facilities in place to allow you to manage your account online. Most suppliers operating online account access will allow you to:

  • Get a quote
  • Set up your switch
  • Track your energy usage
  • Submit meter readings
  • Manage multiple properties

Business energy meters vs. smart meters

Energy companies are required to install smart meters in business premises, but only if the business owner wants one. While it’s still optional right now, smart meters are likely to become the default way of measuring energy usage in the coming years.

Smart meters can be an easy way for you and your supplier to measure your electricity usage as readings can be taken digitally and get sent directly to the supplier.

As well as the convenience factor, there are various additional advantages to choosing a smart meter over a regular meter, including:

  • More accurate reading means more accurate billing
  • No need to take annual meter readings; smart meters have a SIM card which means readings are sent directly to your supplier saving you time and hassle
  • Accurate records of your energy usage will help you take a proactive approach to ensure strategic energy efficiency
  • Real-time updates give you access to information you wouldn’t get through a traditional meter

If you’re still doubtful about the merits of a smart meter, you may be interested to know some of the recognised drawbacks, which include:

  • A smart meter could end up costing more money – while you won’t need to pay an upfront cost for your smart meter, you may see a slight increase in your bills to cover the cost and accuracy of reading may play against you too
  • Installation will cause downtime for your business – it generally takes about 20 minutes to install a smart meter and while some suppliers may be willing to be flexible about when the install will occur, most will generally do it during normal working hours
  • It’s possible to hack a smart meter – even though smart meters are required to meet stringent government security standards, as with any technology they are not 100% secure
  • If you rent your premises you’ll need to seek permission to install a smart meter from your landlord

If you decide to make the move and go digital with a smart meter, your current energy supplier will be responsible for the installation. However, all smart meters are interoperable and won’t prevent you from switching your supplier and continuing on the same smart meter.

How do I calculate my business usage?

Along with running costs for aircon, heating and lights every electronic device or appliance will affect your energy usage. If you don’t have a previous breakdown from your supplier, calculating how much gas and electricity your business uses can be complicated.

As an idea of how much electricity your business operations should require, there are industry average figures which are broken down based on business size and demand.

Business gas and electricity prices based on usage

The table below illustrates this, along with average business electricity prices for a year’s worth of operations.

Business Size Low-end usage (kWh) High-end usage (kWh) Average annual electricity bill
Micro business 5,000 15,000 £1,062
Small business 15,000 25,000 £2,038
Medium business 30,000 50,000 £3,146

The following table illustrates the rough sums for typical business gas usage and prices:

Business Size Low-end usage (kWh) High-end usage (kWh) Average Annual Price
Micro 5,000 15,000 £300 – £700
Small 15,000 25,000 £800 – £1,400
Medium 25,000 50,000 £1,500 – £2,000

We work with independent energy brokers who will be able to give you a better idea of your energy usage as they have the experience to know how to calculate your consumption. They will also be able to help you find a supplier with the best available rates, based on your electricity needs.

Setting up gas and electricity for a new business

Setting up your gas and electricity supply when you’re a new business means it’s more important than ever to make sure you get the right contract terms. As a new company, you will face many unknown costs and, if you know your commercial operations will require a lot of energy, it’s wise to make sure you’re getting the best priced deal.

Working with an energy broker could help save you money on the electricity and gas contracts for your new business. We work with whole-of-market business energy advisors who are best positioned to find the energy provider most likely to offer the most competitive tariffs based on your company’s needs.

They specialise in all types of business sectors, including…

  • Manufacturing and industrial
  • Pubs and cafes
  • Hotels and care homes
  • Stadiums
  • Agriculture
  • And many more

Get in touch for a free, no-obligation chat to get started.

Green business energy suppliers

If you want to power your business on green, renewable energy there are currently two ways you can do this:

  • Generate your own green electricity through commercial solar panels or wind turbines
  • Buy your supply of gas and electricity from one of the UK’s green energy suppliers

Unless you’re already well-versed in green power, it’s unlikely you’ll have come across the many green energy suppliers who have arrived on the UK market in recent years.

Although the big energy companies all generate some of their gas and electricity through renewable sources, it’s only recently become possible to buy your energy on renewable-only tariffs.

There are more than 10 green energy companies you could get your renewable electric supply from, including; Bulb, Green Energy UK and Octopus Energy.

While it’s possible to approach every green energy supplier individually to compare the rates you could get, using an independent energy broker will save you time and hassle because they will know which provider is most likely to offer the best rates to service your company’s needs.

Finding the cheapest energy suppliers

Finding a cheap gas and electricity supplier isn’t as straightforward as it might sound, or at least that’s the case if you do the legwork yourself. The energy provider who’s best positioned to offer affordable fuel to your company is the one whose eligibility criteria you fit the closest, and this means searching the entire market for the perfect supplier for your needs and circumstances.

Working with the right commercial energy will take the sting out of the process as they know the entire market and will be well aware which energy supplier to approach for the best deal for you.

Finally, keep in mind that ‘cheap’ doesn’t necessarily mean quality. The provider offering the least expensive tariffs might be totally unsuitable for your company’s needs, but by working with an energy broker, you can rest assured that you’ll be introduced to the right supplier first time.

Speak to a business energy broker

Call 0808 189 0463 or make an enquiry and we’ll connect you to one of the independent energy brokers we work with. With access to all the energy providers in the UK they will be able to assess your business gas and electricity needs and match you with the supplier offering the most competitive rates

Craig Watson

Craig Watson

Commercial Energy Expert

About the author

Craig is a commercial energy advisor who has been working within the industry for over a decade. He currently serves as operations director with Experienced Energy Solutions and is passionate about helping businesses save time, money and energy.

Delivering market-leading consultation on all things energy related, Craig supports his customers by offering a fully transparent approach and breaking gas and electricity management down into a language anyone can understand.

Craig was also a co-founder of Birmingham Net Zero and has previously held positions with leading gas and electricity suppliers and energy consultants.

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Get Started