How To Switch Your Business Energy

Your complete UK guide to comparing, switching, and saving

In today’s climate of rising energy costs and tightening business margins, UK business owners are looking for every opportunity to cut expenses, and switching your business energy supplier is one of the smartest and easiest ways to do just that.

Whether you're running a small bakery or a growing chain of offices, locking in the right energy deal could save your company hundreds or even thousands of pounds each year. But many still stay put, often because they’re unsure how switching works or assume it’s a hassle.

This detailed guide takes away the guesswork and gives you a clear, step-by-step roadmap to switch your business energy efficiently, legally, and profitably.

Why Switch Business Energy? 

Business energy isn’t like domestic energy. You’re not automatically switched to a better deal when your contract ends, and in most cases, your tariff rolls over onto higher out-of-contract rates, often without your knowledge.

Here’s why switching makes business sense:

• Out-of-contract rates can be up to 80% higher
• Suppliers rarely offer existing customers the best deals
• You can negotiate tailored contracts for your usage profile
• Switching offers a chance to go green or carbon-neutral
• Budgeting becomes easier with fixed-rate contracts

Example: A small business paying 45p per kWh on a default rate could switch to a supplier offering 27p per kWh. With a usage of 20,000 kWh per year, that’s a saving of £3,600 annually.

Is Your Business Eligible to Switch? 

Most UK businesses can switch, even if they operate from leased premises or shared offices.

You CAN switch if: 

• You’re the named bill payer
• Your contract is nearing the end
• You’ve received a renewal notice
• You’re on a deemed or out-of-contract rate

You MAY NOT be able to switch if: 

• You’re locked into a fixed contract with exit fees
• You’re part of a multi-site or group contract needing approval
• Your business has a disputed account balance

Pro tip: Ask your current supplier for your contract end date and termination notice window.

Step-by-Step: How To Switch Your Business Energy

Switching suppliers is far more straightforward than most think. Here’s how:

1. Review Your Current Contract 

Before switching, get your key contract details in hand:

• Supplier name and tariff
• Contract end date
• Usage (kWh) for electricity and/or gas
• MPAN and MPRN (found on your bill)

2. Compare Business Energy Quotes 

Use a reliable comparison service or broker to collect quotes from:

• Major suppliers like EDF, British Gas, and E.ON
• Challenger brands such as Octopus, Pozitive Energy, and Opus
• Renewable energy suppliers for a greener option

Look beyond just the unit rate. Factor in:

• Standing charges (which vary by supplier)
• Contract length
• Any green credentials
• Exit fees
• Payment terms and billing cycles

3. Choose the Best Deal 

Pick a tariff aligned with your priorities:

• Fixed-rate contracts: Lock in pricing for up to 3 years
• Variable tariffs: May drop if wholesale prices fall
• 100% renewable tariffs: Ideal for sustainability goals

Also check for:

• Smart meter compatibility
• Online billing and usage tracking tools
• Dedicated business account support

4. Sign the Letter of Authority (LOA) 

This document allows a broker or supplier to manage the switch on your behalf. You’ll need to provide:

• Recent bill or account details
• Meter readings (if requested)
• Preferred switch date

They’ll handle the process, including contacting your current supplier.

5. Finalise Your Switch 

Once confirmed:

• Submit final readings
• Await your last bill from the previous supplier
• Receive a welcome pack from the new supplier
• Begin your new contract typically within 14–28 days

No need for new meters or hardware, your supply remains uninterrupted.

How Energy Prices Are Set in the UK 

Understanding how business energy prices are determined can help you make smarter switching decisions and avoid locking in during price spikes.

The Role of the Wholesale Energy Market 

UK energy suppliers buy electricity and gas from the wholesale market, where prices fluctuate daily based on global supply and demand. Suppliers then add operational costs and margins before offering you a tariff.

Impact of Global Costs and Government Levies 

While wholesale prices are key, the final cost also reflects:

• Network charges (distribution & maintenance)
• Green levies (like the Climate Change Levy)
• VAT on business energy (usually 20%)

Why Timing Your Contract Matters 

Because of market volatility, timing is everything. Fixing your contract during a price dip can protect your business from unpredictable increases later on.

Tip: Monitor energy market trends or work with a broker to switch at the optimal time.

The Energy Price Cap Confusion 

Note that the domestic energy price cap (regulated by Ofgem) does not apply to business energy. Some SME owners mistakenly believe they’re protected by it. In reality, business energy is fully unregulated, making it crucial to shop around.

Can You Switch Mid-Contract? And What Are the Penalties?

Many businesses assume they’re stuck with their supplier until the end of their contract, but that's not always the case.

Early Termination Fees Explained 

If you’re on a fixed-term contract, your supplier may charge early exit fees. These are often based on:

• Remaining contract duration
• Estimated future usage
• Administrative fees

Negotiating with Suppliers Mid-Contract 

Some suppliers are open to renegotiating or offering better terms mid-contract, especially if you:

• Increase usage
• Threaten to switch after the contract ends
• Ask for a review due to market changes

When Can You Switch Without Penalty? 

You can legally leave without charge if:

• Your contract has expired, or you're on a deemed rate
• You receive a renewal offer, but decline it within the allowed window
• Your supplier changes terms mid-contract
• The business relocates or ceases trading

Check your notice period and contract T&Cs before taking action.

Switching to a Renewable Business Energy Supplier 

More UK businesses are looking to cut their carbon footprint, and switching to a renewable supplier is one of the fastest ways to do so.

Pros of Renewable Energy for Businesses 

• Boost brand reputation: Eco-conscious consumers favour green businesses
• Lower your carbon output: Helps you meet CSR and ESG goals
• Potential tax incentives: You may qualify for schemes rewarding energy-efficient operations
• Fixed green tariffs: Many renewables offer price stability with ethical sourcing

Common Renewable Suppliers in the UK 

Some of the most trusted providers offering green business energy include:

• Ecotricity
• Good Energy
• Octopus Energy
• Pozitive Energy

How to Verify Green Credentials 

Look for suppliers that provide REGO (Renewable Energy Guarantee of Origin) certificates. This ensures the energy you're buying is legitimately sourced from renewables like wind, solar, or hydro.

Going green isn’t just good for the planet; it can future-proof your business.

Benefits of Using a Broker vs DIY Switching 

Using a Broker

👉 Saves time
👉 Access to exclusive or wholesale rates
👉 Handles admin and negotiation

🚧 May charge a commission
🚧 Not all brokers are transparent. Check their fee structure

Switching on Your Own 

👉 Full control over your contract
👉 No broker fees

🚧 More research and time required
🚧 Risk of missing better bespoke rates

What Happens After the Switch? 

Once your switch is complete:

• Your new supplier sends a confirmation pack
• You start receiving bills under your new tariff
• Your old supplier sends a final invoice, typically within 6 weeks
• You may receive a credit refund if charged too much

No new installations or inspections are required unless your supplier requests a smart meter upgrade.

Legal Obligations & Ofgem Regulations 

There’s no legal obligation to stay with any supplier. However, your business must respect the terms of your signed contract, particularly notice periods and early exit fees.

For microbusinesses (defined as those using <100,000 kWh of electricity or <293,000 kWh of gas per year), Ofgem regulations ensure:

• Simpler contract language
• No auto-rollovers without permission
• Better notice of price changes
• Fairer switching processes

Checklist: What You Need to Switch Business Energy

• The most recent energy bill
• MPAN/MPRN numbers
• Annual consumption data
• Contract end date
• Supplier’s name and tariff
• Letter of Authority (if using a broker)

Conclusion: Smart Switching for Long-Term Gains 

Energy switching may feel small in the grand scheme of business decisions, but it’s one that can yield huge returns with minimal effort.

With transparent quotes, smarter suppliers, and greater market competition, there's never been a better time to take control of your business energy costs. Whether you're driven by savings, sustainability, or simplicity, make the switch work for you.

Summary Points 

• UK businesses on default rates are overpaying for energy
• Switching is legal, easy, and typically takes under 4 weeks
• Comparing quotes helps avoid hidden costs and secure better terms
• Fixed-rate and green tariffs offer financial and reputational benefits
• Ofgem regulations protect microbusinesses and simplify the process

Frequently Asked Questions

Q1: Can I switch energy if I rent my business premises?
A1: Yes. As long as your business is the bill payer, you can switch, regardless of whether you own or lease the property.

Q2: Do I need to install a new meter when switching?
A2: No. Your energy supply and meter remain the same. If you choose a smart meter, the supplier may offer a free upgrade.

Q3: What if my current supplier offers a better deal after I’ve switched?
A3: You can always ask for a competitive quote before switching. Once the switch is in progress, cancelling may incur fees depending on the contract.

Q4: Are there any switching penalties?
A4: Only if you’re switching before the end of a fixed contract. If you're out of contract, there are typically no fees.

Q5: Is it safe to switch business energy suppliers online?
A5: Yes, as long as you use a reputable broker or comparison site regulated by Ofgem or other trusted UK bodies.