Are you unhappy with your current business energy contract? Would you like to cancel it and find a better deal elsewhere? If so, you’ll find all the information you need about cancelling contracts in this informative guide, and you’ll also get advice on how to find an energy tariff that is better suited to your business’ needs.
Why Might A Business Want To Get Out Of Their Energy Contract?
There are several reasons why a business may want to get out of its energy contract. For example:
- Their current tariff isn’t suitable for their needs – Certain changes in your business can also require a change in your energy tariff. For example, a business that changes their hours and stays running through the night or in the early hours of the morning may be better suited to an Economy 7 Meter or Economy 10 Meter. Likewise, you may consider switching to a dual fuel tariff, where both your gas and electricity is supplied by the same energy provider. Also, businesses looking to become more eco-friendly may switch over to a green energy tariff.
Even if there hasn’t been a recent change in your business, you should always review your business energy as you may be better suited to a different tariff.
- Their tariff rates are high – High unit rates can lead to high energy bills, which isn’t ideal if you’re looking to reduce overheads. For instance, variable rate tariffs are notoriously expensive, meanwhile, fixed rate tariffs tend to be a more popular choice due to their cheaper and more secured rates. A business that is looking to reduce their energy bills may find it useful to switch from a variable rate tariff to a fixed rate energy contract.
- They’re not satisfied with their supplier’s customer service – Having a good energy tariff is not just about the rates and the price of your energy bills. You should also aim to select a supplier that has good customer service so that any issues that may arise are dealt with properly. Bad customer service can cause businesses to want to switch suppliers.
Terminating A Business Energy Contract Vs. Cancelling A Domestic Energy Contract
Terminating a business energy contract is not as simple as cancelling a domestic energy contract. Your business’ gas and electricity contracts will be set for a fixed period, typically between 1-3 years, and you are bound into this contract until it expires. Only then can you terminate it and switch over to a new deal.
You should take a look at your business energy contract to find out exactly when you are permitted to cancel.
Microbusinesses & Renewal Letters
A renewal letter is a document that your energy provider sends you to let you know that your contract is coming to an end. They will give you an insight into the options available to you should you choose to stay with them. They may also inform you of the process for contract termination.
If your business is considered a microbusiness, your energy supplier is obligated to provide you with a renewal letter three months before the end of your contract; as instructed by Ofgem. This gives you a heads up on when you can switch business energy suppliers and helps to prevent you from being rolled over to a new, and possibly more expensive, contract.
Unfortunately, if your business is not a microbusiness, your supplier is not required to send you a renewal letter and the onus is on you to remember key dates and arrange a contract termination and supplier switch.
How Do I Know If My Business Is A Microbusiness?
If your business has any of the following features, it is likely to be considered a microbusiness:
- Consumes less than 100,000 kWh of electricity per year
- Consumes less than 293,000 kWh of gas annually
- Has fewer than 10 employees
- An annual turnover or balance sheet that doesn’t exceed £2 million
What’s The Best Way To Get Out Of An Energy Contract?
The most effective way of terminating your business energy contract is to send your supplier a termination letter. You should do this in advance of the renewal date and send the letter via recorded delivery so that you have evidence that it has been received. Alternatively, you could set a read-receipt function on your mail account if you choose to send the letter by email.
Always ensure that you send the letter prior to the contract end date. There’s likely to be a minimum notice period for termination; this should be outlined in your contract. Generally, the notice period can range between 30-120 days depending on your supplier.
What To Include In Your Termination Letter:
- Your business’ energy account number
- A signature from a person within the business whom the energy company will recognise
- It should be written on company letterhead or sent from a company email address
- Simply state within the letter: “Please terminate our electricity contract when it ends on [contract end date].”
What Happens If I Don’t Terminate My Existing Business Energy Contract?
If you fail to terminate your business energy agreement in due time, your supplier may extend your contract and place you on a tariff that has more expensive rates. This is a common occurrence when businesses fail to stay on top of their business’ energy. In this instance, businesses are placed onto variable rate tariffs with high unit rates, which then lead to unnecessarily high bills.
Consequently, it is always recommended for you to record your contract end date and either organise a switch or arrange a new deal with your current supplier. When you switch suppliers with Love Energy Savings, we’ll remind you of your contract renewal date to ensure that you are never blindsided by expensive default tariffs and to keep you in the loop on the best energy deals available on the market.
What If I Want To Cancel My Business Contract Before Its End Date?
Unfortunately, you cannot cancel your business energy contract before its termination date. This is why it’s so important for you to compare energy prices and select a suitable tariff.
Some suppliers may allow business energy customers to cancel early, but not without hitting them with a penalty charge fee. On the other hand, reasons such as moving business premises or business foreclosure may be deemed as valid grounds for cancellation.
How Do I Switch Business Energy Suppliers?
Once your contract termination has been finalised, you can then move on with switching energy suppliers and finding a new deal. The best way to find a cheaper and more suitable business energy tariff is by comparing energy prices. Due to the plethora of suppliers and tariffs available on the market, finding a suitable deal for your business can be difficult and time-consuming. However, not to worry as that’s where our expertise comes in.
We’re a team of energy comparison specialists who have access to some of the best deals available on the market from both leading and independent suppliers. All we need is your business’ postcode, contact information and a few details about your current energy contract, and in just a few moments we’ll provide you with a range of options from various suppliers.
Our services don’t end there, one of our energy experts will guide you through the switching process and ensure that you are kept up to date with the progress of your switch; they’ll also answer any questions you may have.
Simply try our free online comparison tool to kickstart your switch to a new business energy contract.
Our Top Tips
- Always make a note of your energy contract end date
- Always compare energy prices to minimise the likeliness of you having to cancel your contract
- Remember, you cannot cancel your energy contract before its renewal window if you do you may face a penalty charge
- You should go through your original energy contract and read the terms and conditions to find out where you should send your termination letter. Alternatively, you could contact your energy supplier and ask for this information
- Remember, if you fail to terminate your contract before its cancellation period, your contract could be rolled over for at least 12 months with expensive out of contract rates.