Business energy contract renewal: how to avoid costly rollover rates

Renewing a business energy contract is not simply an administrative task. It is one of the few opportunities your company has to compare suppliers, negotiate new rates and change the way it buys gas or electricity.

Act too late and your business could move onto expensive out-of-contract rates or an unwanted rollover arrangement. Act too early without comparing the complete cost and contract terms, and you could lock the business into an unsuitable tariff for several years.

The safest approach is to start reviewing your options around six months before the contract end date, although some suppliers will provide business energy renewal quotes as much as 12 months in advance. You can then compare unit rates, standing charges, contract lengths, additional costs and supplier service before deciding whether to renew or switch.

If your business energy contract ends within the next 12 months, you can compare prices for business energy tariffs before accepting your supplier’s renewal offer.

Business energy renewal: the quick answer

A business energy contract renewal normally involves agreeing the gas or electricity prices that will apply after your existing fixed-term agreement ends.

You generally have three main options:

1. Renew with your current supplier.
2. Switch to a different business energy supplier.
3. Take no action and move onto the arrangement specified in your current contract.

The third option is usually the most dangerous. Depending on the contract, your business could be placed on rollover, evergreen, deemed or out-of-contract rates. These may be considerably more expensive than a newly negotiated fixed tariff.

For most businesses, the practical renewal process should begin three to six months before the current contract expires. Starting earlier gives you time to:

• Confirm the correct contract end date.
• Check whether notice is required.
• Collect accurate consumption figures.
• Resolve incorrect meter or account information.
• Compare several suppliers and contract lengths.
• Understand any broker commission.
• Prevent a transfer objection.
• Arrange the new contract to begin immediately after the old one ends.

What is a business energy contract renewal?

A business energy contract renewal is the process of arranging the tariff and contractual terms that will apply when an existing commercial gas or electricity agreement expires.

Business energy contracts differ from domestic tariffs. Prices are normally calculated individually using information about the premises, meter, annual consumption, location, payment history and contract requirements.

Business energy contracts can last for up to five years and most suppliers will not allow a customer to switch before the fixed term ends. This makes the renewal date particularly important.

A renewal does not have to mean staying with the same supplier. It can involve:

• Accepting a renewal offer from the existing supplier.
• Negotiating an improved offer with that supplier.
• Moving to another supplier when the current contract expires.
• Changing the length or structure of the contract.
• Moving from a fixed to a variable or flexible product.
• Choosing a renewable or low-carbon electricity tariff.
• Consolidating several meters or sites under a coordinated procurement arrangement.

Gas and electricity are normally covered by separate commercial contracts, even when both fuels are purchased from the same supplier. They can therefore have different renewal dates.

When should you renew a business energy contract?

Most businesses should begin reviewing their energy contract approximately six months before it ends.

This does not necessarily mean signing a new contract six months in advance. It means confirming the key dates, gathering information, requesting indicative prices and deciding when to enter the market.

Some suppliers will issue or accept a renewal quote up to 12 months before the existing contract expires. Other suppliers have shorter renewal windows, particularly for certain meters, products or customer types.

There is no single renewal window that applies to every UK business energy contract.

A sensible timetable is:

Time before contract ends	Recommended action
12 months	Record the end date, examine usage and identify any operational changes
9 months	Check whether suppliers will provide future-dated quotes
6 months	Begin comparing contract structures, suppliers and indicative prices
3–6 months	Obtain firm quotes and compare complete annual costs
1–3 months	Select a contract and resolve possible switching objections
Before the deadline	Give any required notice and obtain written acknowledgement
Contract end date	Existing tariff ends and the renewal or supplier transfer takes effect
First month afterwards	Check the opening reading, first invoice and agreed rates

Leaving everything until the final few days can result in rushed decisions. It also gives less time to correct an inaccurate MPAN, MPRN, estimated annual consumption figure or change-of-tenancy record.

How can I find my business energy contract end date?

Your contract end date may be shown on:

• Your latest business energy bill.
• The original contract or principal terms.
• A renewal letter or email.
• Your supplier’s online account.
• Correspondence from your energy broker.
• A contract schedule covering multiple sites or meters.

The contract end date is not necessarily the same as:

• The date on which the agreement was signed.
• The date of the latest bill.
• The date a direct debit is collected.
• The date on which a broker first contacted you.
• The anniversary of moving into the premises.

If the date is unclear, contact the supplier and request written confirmation of:

• The current contract end date.
• The applicable unit rate and standing charge.
• Whether the contract is fixed, variable, evergreen or already out of contract.
• The notice requirements, if any.
• What will happen if no replacement contract is arranged.
• Whether a termination notice has already been recorded.
• The earliest date on which a future contract can be agreed.

Do not rely solely on a telephone conversation. Ask for the information by email so that you have a record.

What happens when a business energy contract expires?

What happens after expiry depends on the wording of the existing agreement and whether the customer has arranged another contract.

The main possibilities are:

Position after expiry	What it means	Can you normally switch?
Renewed contract	A new agreement begins with the existing supplier	Usually not until the new fixed term ends
New supplier contract	The meter transfers to a different supplier	Usually not until the new fixed term ends
Rollover contract	The existing agreement automatically extends	Depends on the rollover terms
Evergreen contract	Supply continues without a fixed end date	Usually subject to a contractual notice period
Out-of-contract rates	The contract specifies default prices after expiry	Usually yes, subject to the supplier’s terms
Deemed contract	Supply continues where no express contract covers it	Usually yes, without a fixed-term exit fee

These descriptions are sometimes used inconsistently, so check the actual contractual position rather than relying entirely on the label shown on the bill.

Rollover contracts

A rollover contract automatically extends the customer’s agreement when no replacement arrangement has been made.

A rollover may introduce:

• A new fixed period.
• Different unit rates.
• A higher standing charge.
• New termination requirements.
• Restrictions on when the business can switch.

Microbusiness rollover contracts cannot last for more than 12 months. Different contractual arrangements can apply to larger organisations.

Out-of-contract rates

Out-of-contract rates apply when an expired contract states which prices will be charged afterwards.

They are usually variable and may be substantially more expensive than a negotiated tariff. However, a business on out-of-contract rates will normally be able to arrange a replacement supply contract without waiting for another long fixed term to expire.

Deemed contracts

A deemed contract exists where a business consumes energy without having expressly agreed a contract with the existing supplier. This commonly happens when a company takes possession of new premises.

A deemed contract can also apply after an agreement expires if the previous contract does not specify what should happen next.

You can learn more in our guide to business energy deemed contracts.

Should I renew with my existing supplier or switch?

There is nothing inherently wrong with renewing with the existing supplier. The mistake is accepting its first offer without comparing it with alternatives.

Remaining with the same supplier may offer:

• Less account administration.
• Continuity of billing arrangements.
• Familiar customer service.
• No change to online account systems.
• Fewer potential transfer complications.
• Easier management of existing meter arrangements.

Switching may offer:

• Lower unit rates.
• A lower standing charge.
• More suitable contract terms.
• Better customer service.
• Improved billing or reporting.
• Renewable electricity options.
• A more appropriate tariff for the business’s consumption profile.

The existing supplier’s renewal offer should be treated as one quote, not as the default choice.

Suppliers price customers differently according to consumption, credit risk, meter type, location and their own appetite for particular types of business. A supplier that was competitive three years ago might not offer the best renewal price today.

How to compare business energy renewal quotes

The cheapest unit rate does not necessarily produce the cheapest bill.

Compare the complete estimated annual cost, including:

• Electricity or gas unit rate.
• Daily standing charge.
• Contract length.
• Metering charges.
• Capacity charges.
• Pass-through charges.
• Broker commission.
• Payment method.
• Security deposit requirements.
• VAT and Climate Change Levy treatment.
• Early termination provisions.
• Additional service or administration charges.

A basic annual cost calculation is:

Annual unit cost = annual consumption × unit rate

Annual standing charge = daily standing charge × 365

Estimated annual contract cost = annual unit cost + annual standing charge + additional charges

Worked electricity renewal example

Consider a business using 30,000 kWh of electricity each year.

Quote	Unit rate	Standing charge	Annual unit cost	Annual standing charge	Total before tax
Supplier A	24.80p per kWh	125p per day	£7,440.00	£456.25	£7,896.25
Supplier B	25.60p per kWh	45p per day	£7,680.00	£164.25	£7,844.25

Supplier A has the lower unit rate, but Supplier B produces the lower estimated annual cost because its standing charge is substantially cheaper.

This is an illustrative example rather than a representation of currently available prices. Actual business energy quotes depend on the individual meter, consumption, location, contract date and supplier.

For more information about the different elements included in an invoice, see our complete business energy bill guide.

What information is needed for a renewal quote?

Accurate information helps suppliers produce more reliable prices and reduces the risk of problems after the contract has been agreed.

Try to provide:

• Business name and trading address.
• Registered company name and number, where applicable.
• Supply address and postcode.
• Current supplier.
• Contract end date.
• Current unit rate and standing charge.
• Annual gas and electricity consumption.
• A recent bill.
• MPAN for electricity.
• MPRN for gas.
• Electricity meter profile and type.
• Maximum Import Capacity for relevant supplies.
• Preferred payment method.
• Number of meters and sites.
• Expected changes in future consumption.

You can use our guides to locate your MPAN electricity supply number and MPRN gas supply number.

A supplier may use an estimated annual consumption figure held by the industry rather than the figure shown on your own records. If that estimate is inaccurate, raise the issue before signing the contract.

Should you choose a fixed or variable renewal?

A fixed-rate business energy contract normally fixes the agreed unit rate for a defined period. It can provide budget certainty, although the amount paid each month will still change with consumption.

It is also important to establish exactly what is fixed. Some contracts fix the wholesale energy element while allowing network, policy or other non-commodity charges to be passed through separately.

A variable contract can change in response to market conditions or the supplier’s pricing methodology. It offers more flexibility but less certainty.

Larger businesses may also consider flexible purchasing, baskets, pass-through products or corporate power purchase agreements.

Our guide to fixed and variable business energy tariffs explains the differences in more detail.

How long should a renewal contract last?

Business energy contracts commonly last for one, two, three, four or five years.

There is no universally correct length.

Contract length	Potential advantages	Potential disadvantages
One year	Short commitment and earlier opportunity to re-enter the market	More frequent renewals and less long-term price certainty
Two years	Balance between flexibility and stability	Business remains exposed if prices fall soon after signing
Three years	Longer budgeting certainty and fewer renewal exercises	Greater commitment to the selected supplier and price
Four or five years	Long-term price visibility	Significant risk of being locked into an unsuitable deal

Consider:

• Expectations for wholesale prices.
• The business’s tolerance of price risk.
• Whether it might move premises.
• Changes in production or opening hours.
• Planned electrification, solar panels or EV charging.
• The financial strength of the business.
• Whether gas demand is expected to decline.
• The likelihood of selling or closing the company.
• The quality of the supplier’s service.
• Early termination and change-of-tenancy provisions.

A longer contract is not automatically cheaper. Compare the prices and total cost for each available duration.

Should you renew now or wait?

No one can reliably identify the lowest point of the wholesale energy market in advance.

Waiting may produce a lower price if wholesale costs fall. It could also expose the business to higher rates if prices rise before the renewal is secured.

Instead of trying to predict the exact bottom of the market, consider:

• How the available quote compares with the current contract.
• How it compares with recent market levels.
• Whether the business values certainty.
• How much time remains before expiry.
• Whether different contract lengths reduce the risk.
• Whether the quote remains open for only a limited period.
• The cost of accidentally reaching rollover or out-of-contract rates.

Starting early allows you to monitor prices without being forced to accept immediately. As the end date approaches, the commercial risk of waiting generally increases.

Do microbusinesses have special renewal protections?

Some renewal rules apply specifically to microbusiness energy customers.

Ofgem defines a microbusiness using employment, financial or energy-consumption thresholds. A business can qualify if it:

• Uses no more than 100,000 kWh of electricity a year.
• Uses no more than 293,000 kWh of gas a year.
• Or has fewer than 10 employees and meets the applicable turnover or balance-sheet threshold.

Among the protections introduced for microbusinesses are requirements intended to make renewal information clearer. Ofgem states that suppliers must include current prices, proposed new prices and annual consumption details in renewal letters for fixed-term contracts.

The maximum contractual termination notice period for a microbusiness is generally 30 days, and suppliers must take reasonable steps to acknowledge a termination notice within five working days.

Microbusiness rollover contracts cannot last for more than 12 months.

Larger businesses should not assume that these particular limits apply to them. Their notice requirements and post-contract arrangements may be governed primarily by the contract they signed.

Is notice required to switch at renewal?

Notice requirements depend on the customer classification, contract date and contractual terms.

Do not assume that signing with another supplier automatically satisfies every obligation under the existing agreement.

Before arranging the switch:

1. Check the principal terms and renewal correspondence.
2. Ask the existing supplier whether notice is required.
3. Give any notice in writing.
4. State the account number, supply address, MPAN or MPRN and contract end date.
5. Make clear that termination should take effect when the fixed term ends.
6. Ask the supplier to acknowledge the notice in writing.
7. Retain the email, letter and acknowledgement.

For microbusinesses, the maximum applicable notice period is generally limited to 30 days. Other organisations can have different contractual notice arrangements.

Is there a cooling-off period?

Do not assume that a business energy contract includes a cooling-off period.

Ofgem warns that a commercial energy agreement can be binding when accepted over the telephone, even if the customer has not physically signed a document. Its business guidance states that there is no cooling-off period after agreeing a contract.

Some individual suppliers may voluntarily offer cancellation rights in particular circumstances, but this must be confirmed before acceptance.

Before agreeing a renewal:

• Request the principal terms in writing.
• Read the complete contract.
• Confirm the rates and contract duration.
• Check the start and end dates.
• Identify every additional charge.
• Check the broker’s authority and commission.
• Confirm what happens at the end of the new term.
• Make sure the person accepting has authority to bind the business.

If you have already accepted an unsuitable agreement, see our guide to getting out of a business energy contract.

Should you use a business energy broker?

A broker can obtain and compare offers from its panel of suppliers, assist with paperwork and help coordinate the transfer.

However, not every broker covers the whole market. Ask:

• How many suppliers are on the broker’s panel?
• Which suppliers are excluded?
• How is the broker paid?
• Is commission added to the unit rate or standing charge?
• What is the total expected commission?
• Does the broker charge a separate fee?
• What support is provided after the contract is signed?
• Can the broker submit termination notices?
• What authority does its letter of authority provide?
• Is the broker registered with an appropriate redress scheme?

For contracts signed from 1 October 2024, Ofgem extended the requirement for principal terms to display broker fees to all non-domestic customers. Suppliers must also make this information available on request.

A broker’s fee may be charged directly or incorporated into the energy price. Even a small addition per kWh can become substantial over a multi-year contract.

For example, a commission uplift of 1p per kWh on annual consumption of 100,000 kWh represents £1,000 a year and £3,000 over a three-year contract, assuming consumption remains constant.

Read any letter of authority carefully before signing it.

What if your business has several meters or premises?

Multi-site businesses should begin renewal planning earlier because they may have:

• Different suppliers.
• Different contract end dates.
• Several MPANs and MPRNs.
• Half-hourly and non-half-hourly meters.
• Separate invoices and payment arrangements.
• Different consumption profiles.
• Sites that are opening, moving or closing.

Possible strategies include:

• Renewing every meter separately.
• Aligning future end dates.
• Consolidating several sites with one supplier.
• Grouping similar electricity meters.
• Using a flexible procurement arrangement.
• Keeping gas and electricity with different suppliers.
• Combining billing while retaining site-level reporting.

Do not assume that one supplier and one contract will always be cheapest. Consolidation can reduce administration, but separate offers may sometimes produce a lower overall cost.

What should half-hourly electricity customers check?

Larger and more energy-intensive electricity supplies can include costs that are not captured by a simple comparison of the headline unit rate and standing charge.

Check:

• Maximum Import Capacity.
• Capacity charges.
• Excess capacity rates.
• Meter Operator charges.
• Data collection and aggregation charges.
• Distribution and transmission charges.
• Reactive power charges.
• Time-of-use periods.
• Whether non-commodity costs are fixed or passed through.
• Whether the price uses the correct consumption profile.

Our guide to MOP, data collector and data aggregator contracts explains the additional metering arrangements that can apply.

Common business energy renewal mistakes

Waiting for the renewal letter

Do not rely on the supplier contacting the right person at the right address. Staff changes, spam filters and outdated records can all cause renewal correspondence to be missed.

Record the end date independently.

Comparing only the unit rate

A low unit rate can be offset by a high standing charge, broker uplift, capacity charge or pass-through cost.

Compare the complete annual and full-contract cost.

Accepting the first renewal offer

The existing supplier has little incentive to improve its offer if the customer does not compare alternatives.

Failing to check consumption

An inaccurate estimated annual consumption figure can affect the quote and the suitability of the tariff.

Confusing gas and electricity dates

The two fuels normally have separate contracts and may require separate renewal decisions.

Ignoring broker commission

Request the commission in writing and include it in the total contract cost.

Agreeing over the telephone without checking

A verbal agreement can be binding. Do not accept until the rates, dates, charges and terms have been confirmed.

Choosing an unnecessarily long contract

A five-year agreement may provide certainty, but it can also outlast a tenancy, operational plan or expected pattern of consumption.

Assuming the switch is complete

Continue checking the transfer until the new supplier confirms that the meter has been registered successfully.

Business energy renewal checklist

Before accepting a contract, confirm that you have:

• Located the current contract.
• Verified the contract end date.
• Checked any notice requirements.
• Identified what happens after expiry.
• Collected at least one recent bill.
• Verified the MPAN or MPRN.
• Checked annual consumption.
• Corrected estimated readings where necessary.
• Considered future changes in demand.
• Compared several suppliers.
• Compared more than one contract length.
• Calculated the annual standing charge.
• Checked whether all charges are fixed.
• Identified broker commission.
• Checked the supplier’s customer service.
• Confirmed the payment method.
• Read the termination provisions.
• Confirmed the new start date.
• Retained the full principal terms in writing.

What happens after signing the renewal?

After agreeing the contract:

1. Save the principal terms and complete contract.
2. Confirm the supply start date.
3. Check that any termination notice has been accepted.
4. Monitor for a supplier objection.
5. Provide information requested by the new supplier.
6. Take an accurate meter reading on the transfer date.
7. Give the reading to the old and new suppliers.
8. Check the final bill from the previous contract.
9. Check the first bill under the new contract.
10. Confirm that the unit rate, standing charge and other fees match the agreement.

A supplier switch should normally complete within five working days once the supply is eligible to transfer and the switch has been requested. A contract agreed in advance will normally be scheduled to begin when the existing fixed term ends.

The physical gas pipes, electricity cables and local network do not change when you switch supplier. There should be no interruption to the energy supply.

What if you have already missed the renewal date?

First, establish exactly what contractual position now applies.

Ask the supplier whether you are on:

• A rollover contract.
• An evergreen contract.
• Out-of-contract rates.
• Deemed rates.
• A new fixed-term renewal.
• The previous contract temporarily continuing.

Request the applicable prices, notice requirements and earliest possible switching date in writing.

If you are on deemed or out-of-contract rates, you may be able to switch immediately. If the agreement has rolled into another fixed period, check whether the rollover complied with the contract and the rules that apply to your business.

Do not sign another contract until the existing position has been confirmed. Two suppliers attempting to register the same meter can cause a transfer objection.

Frequently asked questions

Compare business energy renewal prices

The end of a commercial energy contract is an opportunity to reduce costs, change suppliers and secure terms that better suit the way your organisation uses gas and electricity.

The most important steps are to act early, verify the contract end date, compare complete costs and understand what will happen if no action is taken.

If your electricity or gas agreement is approaching its renewal date, compare prices for business energy tariffs before accepting a renewal offer. Checking the wider market can show whether your current supplier is offering competitive rates or whether switching could reduce your next contract’s cost.