Types of contract
How you use gas and electricity as a business will differ from the average household. So business energy contracts are different, with offers varying between business energy suppliers.
It’s important to understand your type of contract so you can check you are getting the best deal for your business usage. If you are a , certain rules apply which affect how you are billed too.
Deemed and out-of-contract
A deemed contract normally applies if you move into new business premises and don’t agree a contract. You could also be on a deemed or out-of-contract contract if your current contract ends but the supplier continues supplying energy that you use. This might happen if the original contract does not state what will happen at the end of a contract or does not have renewal provisions.
Deemed and out-of-contact contracts are usually among a supplier’s most expensive. It's best to shop around and agree on a contract as soon as you take on premises or near an end-date to avoid paying more.
You’re charged a set rate per unit of energy (measured in kWh) for the fixed term of the contract. This doesn’t fix your total bill, which will go up or down with your energy usage.
Where the rate charged per unit of energy (measured in kWh) is linked to market activity. So your rate per unit of energy could change throughout your contract.
This normally applies if you’ve not agreed a different contract before your current contract end date and there are no renewal provisions. If you are a , this contract can’t last more than 12 months.
How business energy contracts differ
They are usually longer
Business energy contracts often last up to five years or more in length with most one to three years. You’re usually tied into the contract until you enter a switching window in the contract. Normally this is near the contract end date. If you don’t give notice to your supplier about a planned switch in this period, you could roll over to an expensive default contract. It’s important to know your business contract end date and the notice periods required.
There’s not normally a cooling-off period
Household energy contracts offer 14 days to cancel from the date you agree a contract if you change your mind. Most business energy contracts don’t offer this, though it is worth asking about.
You don’t need to sign an energy contract for it to be binding
You could agree a contract on the phone. It’s best to ask for all terms to be sent in writing before you agree to an offer.
They are usually single-fuel
You’ll typically need to get separate quotes for gas and electricity contracts when shopping around, and will be billed separately for each too.
If you use a business energy broker the rate you pay could incorporate their fee, depending on your broker’s agreement with a supplier. It’s best to ask for all terms of a broker agreement and the energy contract offer to be sent in writing before you agree to it, so you are clear on the terms.
Check your business energy rights
Citizens Advice offers free, independent advice about business energy contracts and your rights.
- Call 0808 223 1133 or use their online web chat.
- For textphone, dial 18001 followed by the helpline number.
- Someone at their Extra Help Unit could take on your case if you are having difficulties with a supplier and are in a .
You can also contact the government’s free Business Support Helplines.
For energy efficiency advice, see our page Find business energy efficiency grants and schemes.