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Business energy renewals: When to renew, how it works and how to avoid expensive rates
A business energy renewal is the process of agreeing on a new tariff for your gas or electricity supply before your current contract ends, either with your existing supplier or a new one.
Many businesses leave it too late. This guide walks you through when you can actually start the renewal process, why timing has such a big impact on the rates you pay, and how to avoid the costly traps that catch out thousands of businesses every year.
Here’s what we cover:
- When to renew your business energy contract
- How to check your renewal window and notice period
- The business energy renewal process
- What happens if you miss your renewal deadline?
When to renew your business energy contract
There is no single renewal window that applies to all business energy contracts. Most suppliers will let you lock in new rates somewhere between 6 and 12 months before your current contract ends, but the exact window depends on who you are with and the size of your business.
British Gas business energy, for example, will provide a renewal quote up to 12 months before your end date and sends its formal renewal offer around 60 days before the contract finishes.
Other suppliers operate shorter windows, with some only accepting renewals between 3 and 6 months from the contract end date. Business energy brokers can often quote earlier than suppliers will directly, particularly for larger businesses with half-hourly meters, where forward contracts are common.
The safest approach is to check your latest bill or renewal letter for your contract end date, then contact your supplier or broker to confirm the earliest point you can secure new rates.
Why acting early matters
Leaving your renewal to the last minute is the single biggest reason businesses end up overpaying for their energy. Three specific risks come with waiting:
- You lose negotiating power. Suppliers know when your contract ends, and quotes generated in the final weeks tend to come in higher than those offered earlier in your renewal window.
- You risk falling into out-of-contract rates. If your contract lapses without a new one in place, you will typically be moved onto your supplier’s most expensive tariff, often 30% to 50% higher than a negotiated rate.
- You run out of time to switch suppliers. Switching to a new supplier takes time. Quotes need sourcing, and contracts need signing before your new contract starts. Leave it late, and you risk sitting on expensive out-of-contract rates before the new contract begins.
Market timing considerations
Wholesale electricity market and wholesale gas market prices frequently move, driven by weather, geopolitics, supply availability and seasonal demand. Geopolitical events can push prices up sharply with little warning.
While no one can time the market perfectly, arranging your renewable 6 to 12 months before your contract end dates gives you the option to fix prices when market conditions are favourable.
How to check your renewal window and notice period
Your renewal window is the period when you can secure a new tariff with the current supplier. Your notice period, if you have one, is the deadline to formally tell your supplier you are switching. They are not the same thing.
Whether you need to give notice at all depends on your business size. Since October 2022, Ofgem rules mean microbusinesses no longer need to give a termination notice on standard fixed-term contracts.
The exception is if you are on an evergreen or rollover tariff, where notice may still apply. Larger businesses usually need to give notice, with the exact period set out in the contract, commonly 30 days but sometimes longer.
Ofgem rules require suppliers to print your contract end date and notice period on every fixed-term bill, so your latest business electricity bill or business gas bill is the quickest place to check. Larger businesses are not covered by this rule, though some suppliers include the information voluntarily.
Failing that, your original contract will confirm the terms. If you cannot find the details, we recommend contacting the customer service team of your supplier.
What information you need to get renewal quotes
To get accurate quotes, suppliers and brokers need a clear picture of your usage and meter setup. Have the following ready:
- Consumption: Estimated annual consumption in kWh for gas and electricity, taken from a recent bill or your online account.
- Meter details: MPAN numbers for electricity, MPRN for gas. Meter type, particularly if you have a half-hourly meter.
- Supplier details: Current supplier and contract end date.
- Business details: Business name, address and registered company number, site postcode.
The business energy renewal process
Whether you renew with your current supplier or switch business energy suppliers, the process follows the same broad steps. Knowing what to expect helps you stay in control rather than reacting to whatever your supplier sends through.
- Confirm your contract end date. This is the deadline that drives everything else. Check your latest bill, original contract, or call your supplier.
- Identify your renewal window and notice period. Your renewal window is the earliest point you can lock in new rates with your current supplier, typically 6 to 12 months ahead. Your notice period, if you have one, is the deadline to formally tell your supplier you are switching.
- Gather your usage data. Most quotes are based on your annual consumption in kWh. Accurate usage data leads to accurate quotes, so use a full year if you can.
- Source quotes from the market. Get quotes from your current supplier and from the wider market. Our experts can source quotes from our panel of business energy suppliers and business gas suppliers in one go.
- Review like-for-like quotes. Look at unit rates, standing charges, contract length and any exit fees. The lowest headline price is not always the best deal once standing charges and contract terms are factored in.
- Agree and sign the new contract. Once you accept a quote, the supplier sends a contract to sign. For new suppliers, the switch is processed once your current contract ends and typically completes within five working days under Ofgem’s faster switching rules. For renewals with your existing supplier, the new rates begin the day after your current contract ends.
After your renewal is complete
Check your first bill carefully. Confirm the unit rates and standing charges match what you signed up for, the contract end date is recorded correctly. Mistakes are rare but do happen, and catching them early avoids problems later.
What to check before accepting a renewal quote
A renewal quote can look straightforward on the surface, but the details are where businesses can get caught out. Before signing, run through these five checks:
| Check | What to look for |
|---|---|
| Unit rate | The cost per kWh of gas or electricity you use. This is the main charge that scales with your consumption. |
| Standing charge | A daily fixed fee you pay regardless of usage. Low usage sites are most exposed to expensive standing charges. See our guides business electricity standing charges and business gas standing charges for more information. |
| Contract length | Most renewals offer one to three years. Longer terms give certainty but lock you in if rates fall. |
| Additional charges | Capacity charges or pass-through costs on half-hourly meters, and any broker commission. Since October 2024, Ofgem rules require all non-domestic suppliers to disclose broker fees in contract terms. |
| Renewal terms | The new contract end date, any notice period, and what happens if you do nothing at the end. |
Business energy renewal options
When you renew, you are not just choosing a supplier; you are choosing a business energy contract type. The three main options suit different businesses seeking a supply renewal:
| Contract type | How it works | Best for |
|---|---|---|
| Fixed rate | Unit rates and standing charges locked in for one to three years. Predictable and protects you from market rises. | Most small to medium businesses seeking budget certainty. |
| Pass through | Unit rate covers wholesale energy only, with non-commodity costs passed through at actual cost. | Businesses seeking transparency and willing to accept variability on some charges. |
| Flexible energy contracts | Buy energy in tranches across the contract term, taking advantage of market dips. More complex to manage. | Larger users above 1 GWh annual consumption with the right risk appetite. |
How business energy renewal rates are set
Your renewal rate is built from four things: the wholesale cost of gas and electricity, network and policy costs, your usage profile, and the supplier’s margin. While these underlying costs are the same for every supplier, the margin built into the contract is where quotes vary most.
Suppliers know businesses that do not check the market tend to accept whatever lands in front of them, so renewal quotes are often priced higher than what the same supplier would offer a new customer.
What happens if you miss your renewal deadline?
If your contract ends without a new tariff in place, your supplier will move you onto a default arrangement. These rates are set by the supplier rather than negotiated, and they are typically more expensive than a fixed contract.
There are two types of default contracts, and the one that applies depends on the wording in your current contract.
Out-of-contract rates
Out-of-contract rates apply when your fixed term ends, but you stay with the same supplier without signing a new contract. The rates are published on each supplier’s website and are typically significantly more expensive than negotiated fixed rates.
The upside is that you are not tied in. You can move to a new contract with your existing supplier, or switch to a new one, as soon as you have a quote agreed. The longer you sit on out-of-contract rates, the more it costs, so the priority is to get a new contract signed and the switch underway.
If you are already on out-of-contract rates, our experts can help you compare business electricity prices and move you onto a fixed deal within weeks.
Rollover contracts
Rollover contracts are less common than they used to be. Following Ofgem pressure, major suppliers largely moved away from rollovers from 2014 onwards, and any rollover for microbusinesses is capped at 12 months. They still exist on some larger business contracts and older agreements.
If you are rolled over, you are placed onto a new fixed-term contract with your existing supplier, typically for another 12 months, at rates set by them rather than negotiated by you. Ofgem analysis has shown rollover rates are typically around 80% higher than negotiated tariffs. You are locked in for the full term, meaning you cannot switch suppliers or sign a new contract until the rollover ends, unless you move premises.
Situations that can delay or block a renewal
Renewals are usually quick, but a handful of issues can hold things up or, in worst cases, see a supplier decline to offer terms. The most common are:
- Unpaid bills or arrears. Suppliers will not renew or accept a switch while there is an outstanding balance
- Failed credit check. Suppliers can run a credit check before offering a new contract, particularly for larger businesses. A poor credit profile can lead to higher rates, a security deposit being requested, or the quote being declined.
- Change of tenancy or business details. If your company name, address, or registered details have changed since the original contract, suppliers may need updated paperwork.
- Objections from your current supplier. A switch can be blocked if your current supplier objects, usually due to an outstanding balance. In rare cases, an erroneous transfer can also disrupt the process.
- Half-hourly or complex meter setups. Larger sites take longer to quote because suppliers need to model your specific consumption pattern.
Most of these are fixable with a phone call or a corrected document, but they all take time.
Sourcing quotes early in your renewal window gives you the headroom to deal with anything that comes up. If you cannot resolve an issue directly with your supplier, our guide to business energy supplier complaints explains your options.
Business energy renewals – FAQs
Below, our experts answer your most commonly asked questions about business energy renewals.
Can I renew business energy contracts for multiple sites at different times?
Yes. Each site is typically on its own contract with its own end date, though many suppliers will align dates if you ask, which makes future renewals easier.
Read our guide to multi-site business energy contracts for more information.
Will my renewal options change if my usage has increased or decreased significantly?
Yes. A material change in consumption affects the rates available and may change the meter classification, for example, moving from a non-half-hourly to a half-hourly meter if you cross the threshold.
Accurate estimated consumption figures should be reflected in the renewal quote.
Can I lock in a renewal rate now but delay the contract start date?
Yes, this is standard practice within your renewal window. You agree the rate today and the new contract starts the day after your current one ends, up to 12 months ahead with some suppliers.
Can a supplier withdraw or change a renewal offer after it has been issued?
A renewal quote is only an offer until it is signed and accepted. If wholesale prices move before you sign, the supplier can withdraw the quote or reissue it at a different rate, up or down.
Rates are only locked in once the contract is signed by you and accepted by the supplier.
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