A Guide to Renewing Your Business Energy Contract

It’s in the best interests of all business owners to monitor costs and expenses. Your business energy contract can be one of the biggest, and keeping on top of it will make a big difference to your bottom line. 

These contracts are usually fixed-term, which gives you the opportunity to shop around and find a different supplier when they’re coming up for renewal. But how do you do this, when is the right time to start looking, and what benefits could you get from changing suppliers?

What is a Business Energy Contract Renewal?

When agreed in the first place, energy contracts are signed for a set period of time. These contracts need to be renewed when they reach their end. A failure to do so could have consequences. Your business could be put onto a more expensive, out-of-contract pricing plan, and considering the extent to which energy prices have risen in recent years, that could cost a lot of money. 

When Should You Renew Your Business Energy Contract?

The best time to renew your business energy contract is three to six months before it is due to come to an end. This allows you time to survey the energy market to see the best offers, negotiate with suppliers for the best deal you can get, and get a new contract up and running in time for the end of the previous one. 

Factors to Consider When Renewing Your Energy Contract

When you start to consider renewing your energy contract, you’ll need to take into account a number of factors.

Compare suppliers 

Energy is a marketplace, so research multiple providers to secure the most competitive rates.

Contract length

Different deals may last for different periods of time. Based on your future energy needs, choose between fixed or flexible terms.

Renewal timing

Start your negotiations 3 to 6 months before the contract's expiry date to avoid costly rollover or out-of-contract rates and to ensure that you’re getting the latest rates from suppliers.

Hidden fees

Always remember to check the small print! Check for early termination charges or unexpected costs.

Green energy options

Fossil fuel prices have risen in recent years and remain volatile. You may want to consider renewable energy plans for sustainability benefits.

Negotiation leverage

Knowing the market can help you profit! Use market trends and competitor rates to negotiate better terms.

Energy audits & efficiency tools

You can reduce your business energy expenses through reducing waste usage and increasing your business energy efficiency. An increasing number of suppliers now offer audits or smart meters to optimise usage.

Broker assistance

 You may not have the time or inclination to do all of this leg work yourself. You may wish to consider using an energy broker for expert guidance.

Should You Stick with Your Current Supplier or Switch?

Switching business energy providers can lead to cost savings, better contract flexibility, and improved service. Many businesses overpay by staying on default tariffs, while switching providers can secure lower rates and fixed-price deals.

Renewing with an existing supplier may offer convenience, but this may not offer you anything like the most competitive rates. Switching also allows businesses to change the ways in which they manage their energy usage, access green energy options, smart metering and customised contracts. Additionally, suppliers may provide better customer support and faster response times.

Timing is crucial. Reviewing contracts 3 to 6 months before their expiry helps avoid costly out-of-contract rates. Businesses expanding or prioritising sustainability should certainly consider switching suppliers to maximise long-term benefits.

How to Compare Energy Prices and Providers

When comparing business energy prices, it’s important to take a broad perspective. Always make sure to compare multiple suppliers to ensure that you’re getting the most competitive rates. Assess whether a fixed-rate contract offers stability or whether a more flexible variable plan suits your business usage. If sustainability is a priority for you, compare renewable energy plans.

You may not have the time or inclination to do this work yourself, and this is where brokers can help. SwitchPal’s experts can help guide businesses through the switching process, saving time and effort. All you have to do is enter some basic details about your business and its energy use to receive tailored energy quotes from trusted suppliers.

Common Mistakes to Avoid When Renewing Your Business Energy Contract

There are ways in which renewing your business energy contract can go wrong, and there are common mistakes that businesses can make when renewing energy contracts. Here are some common pitfalls that you should look to avoid. 

Delaying the start of the renewal process

Start comparing options three to six months before the expiry of your current contract to avoid costly default rates. 

Not checking market rates for the best deals

Always compare multiple suppliers instead of accepting the first offers that you receive. Unless domestic energy supply, there is plenty of room for negotiation over business energy contracts.

Ignoring hidden fees

It’s easy to be drawn in by an attractive headline number on a supplier’s website, but what’s the total cost of the contract? Make sure to review standing charges, metering fees, and any potential penalties before signing.

Overlooking usage patterns

Different businesses use energy in different ways, so understanding your business's energy usage and factoring that into your search is critical. Ensure that any offers you receive align with your actual energy consumption to avoid excess costs.

Automatic renewals

Automatic renewals can strong-arm your business into contracts which don’t benefit you or your business. Make sure to check renewal terms to prevent being locked into unfavourable rates.

Things aren’t quite as bad as they were two or three years ago, but the energy marketplace remains a volatile place. This isn’t necessarily a bad thing, because it does offer opportunities for better deals that businesses can exploit, but it also means that it may be worth your while involving a broker to help you negotiate your way through it. 

At Switchpal, we can help! We have a panel of trusted suppliers and can get you the best rates for your business's energy use. Check your contract dates, and you, too, can unlock the benefits of switching suppliers and getting the right deals.