Business energy contracts are legally binding agreements between your company and your supplier. Unlike domestic energy deals, business contracts tend to be less flexible, with strict terms around switching and cancellation. Still, there are certain circumstances where you may be able to exit early — or at least reduce the financial impact.
Why business energy contracts are different
- Fixed terms – most business contracts run for 1–5 years, locking in rates for the full period.
- No cooling-off period – unlike domestic energy, business contracts don’t usually include a 14-day cancellation window.
- Exit fees – cancelling early often means paying hefty penalties to cover the supplier’s costs.
When can you exit a business energy contract?
1. Within the renewal window
Most suppliers allow you to arrange a switch during a renewal or notice period — usually 6 months before the contract end date. This is the safest and cheapest time to leave.
2. If your supplier breaches the contract
If your supplier fails to meet obligations, such as consistently incorrect billing or poor service, you may have grounds to terminate the contract early.
3. Business closure or relocation
If your business closes or moves premises, some suppliers allow contract termination. Others may transfer the contract to the new location or charge a penalty.
4. Switching due to price changes
While rare, if your supplier changes prices or terms mid-contract, you may be able to reject the new terms and switch.
What happens if you break a contract early?
If you leave outside the permitted circumstances, you’ll likely face:
- Exit fees – can range from hundreds to thousands of pounds depending on contract size and length.
- Payment of remaining contract value – some suppliers charge for all outstanding energy you would have used.
Tips to avoid costly exits
- Always check contract terms before signing.
- Set reminders for your renewal window to avoid rolling onto expensive “out-of-contract” rates.
- Compare suppliers well in advance to lock in a new deal before the current one ends.
- Consider shorter contracts if flexibility is important for your business.
Final verdict – Can I get out of a business energy contract?
Getting out of a business energy contract early is rarely straightforward and often expensive. The best strategy is to plan ahead, know your renewal window, and negotiate contracts carefully at the outset. For businesses in uncertain circumstances, opting for shorter-term contracts can provide much-needed flexibility.
FAQ – Getting out of business energy contracts
No. Unlike domestic energy contracts, business energy agreements usually have no 14-day cooling-off period. Once signed, you’re committed to the contract unless your supplier makes an exception.
Exit fees vary by supplier and contract length. They can range from a few hundred pounds for small businesses to several thousand pounds for larger companies with high energy usage.
If your business closes, some suppliers will allow termination without penalty, while others may still charge fees. It’s important to provide evidence of closure, such as final accounts or deregistration.
If you don’t arrange a new deal, your supplier may roll you onto an “out-of-contract” tariff. These rates are often 30–50% higher than negotiated tariffs.
Short-term contracts provide more flexibility if your circumstances change, while long-term deals can lock in stability. The best choice depends on your risk tolerance and business plans.