Against a backdrop of rising energy prices, knowing how to switch energy supplier could be a useful way of saving cash for other expenditure – from taxation to staffing. But how can you choose the right gas and electricity supplier and potentially help alleviate some of these cost pressures? Hopefully you may get some inspirational light bulb moments in this Tyl Talks guide to changing energy providers for your business.
Why switch your business energy supplier?
Here are a few reasons why you, as a business owner, might decide to switch your commercial energy supplier.
- Reduce your overheads. Paying over the odds for your gas and electricity could impact on your cash flow, especially if your competitors are paying less.
- Get a better service. Have you had a negative experience of an energy supplier’s customer service? Switching gas or electricity providers might be one way to get the communication and transparency you’re looking for.
- Promote sustainability. If going green matters to you and your business, you could look for renewable energy suppliers that harness the power of the wind, the sun or tide.
What to consider when changing business energy provider
Whether you’re switching energy providers or setting up a business energy tariff for the first time, here are some questions to consider before you get started.
What is your budget?
As your first port of call, you may want to assess which energy suppliers are within your budget. Ofgem, the UK energy regulator, has produced a list of Ofgem-accredited energy price comparison websites, which includes Money Supermarket, Uswitch and Energy Helpline. These websites enable you to compare energy tariffs and decide which deal is right for you and your business.
How many suppliers do you want to use?
You can decide whether you want to get your gas and electricity from the same company, or two separate energy suppliers. Bundling your gas and electricity together is known as a ‘dual fuel tariff’, and might be a way of saving money, though it’s always worth comparing deals on the market. A dual tariff may also be easier to manage, as you would only receive energy bills from one company.
What are your priorities?
Each energy supplier may be able to cater to different business needs. If you value customer service as the main priority, you could look at customer ratings online and in particular, how highly the supplier is rated for issues like handling complaints. Or you may wish to select an environmentally sustainable energy supplier, which we’ll cover in more detail later.
Should I choose a small or large energy provider?
Since the privatisation of British Gas in 1986, and parts of the electricity sector from 1990, many businesses and consumers have signed up to one of the so-called ‘Big Six’ energy companies. These large suppliers – among them British Gas, EDF and E.ON to name a few – have traditionally had the largest market share. In fact, as this Statista data shows, the ‘Bix Six’ had a 100% share in UK domestic electricity supply as recently as 2011, but by the end of 2020, this had fallen to 70%. In recent years, many smaller energy suppliers have emerged and have marketed their services based on everything from their price to their green credentials.
Perhaps one of the perceived advantages of using a large commercial energy supplier is the perceived reduced likelihood of the firm going bust, which has been the fate of many smaller UK energy companies in recent times; in fact, 25 UK energy firms went out of business between August and December 2021. However, as this Which? piece notes, if your energy supplier goes under, your gas and electricity won’t be cut off; ultimately, Ofgem will simply look to appoint a replacement supplier and your credit balance will be protected, so the financial risk to your business of choosing a smaller provider may be lower than you think.
On the other hand, some business customers may prefer the reassurance of choosing a large supplier as they’ll have a track record of delivering a service; British Gas, for example, can trace its heritage back for more than 200 years, (although there are a number of other providers out there so you should always do your research for the provider that best suits your needs). And of course, you may want to prioritise other factors, such as customer service or finding the cheapest deal, regardless of the supplier’s size.
How to switch your commercial energy supplier
If you’re thinking of switching energy provider, here are some of the steps you could decide to take.
1. Check your current tariff
Before you decide to switch your energy supplier, it’s important to understand any implications. Take a look at a recent bill, and your contract, to assess information like your monthly costs, the notice period, any exit fees and how much energy you use monthly or yearly.
2. Shop for a new energy deal
Could you pay less by changing to a different energy provider? You can use business energy comparison sites, a broker or an energy switching service to assess which deal is right for your business. And it’s not simply the price that you can put under the microscope. For example, if you value flexibility, a standard tariff may not offer the most attractive deal, but the lack of exit fees or a fixed contract end date may suit businesses that like to make last-minute plans.
3. Inform your current provider
Once you’re certain you wish to switch business energy suppliers, you will need to inform your current provider and give any required notice, sometimes referred to as a ‘switching window’. The notice period is often 30 days, but not does apply to every tariff so you should always do your research.
4. Check the new contract
When you’ve lined up your preferred supplier, it’s important to check the contract and ensure you’re aware of details such as the pricing and notice periods. It’s also a good idea that you get confirmation (ideally in writing) on the new supply date, and hopefully you will have given yourself enough time to coincide it with the end of your previous contract.
5. Pay any outstanding amounts
No one wants to receive a surprise bill in the post, so you should check with your old energy supplier that your outstanding balance has been paid, and settle any unpaid fees.
When is the best time to switch energy supplier?
The contractual details of each energy tariff are different, so choosing the best time to switch business energy supplier may depend on your current arrangement.
If you’re on a fixed energy tariff, for example, you may be charged a fee for leaving before the contract is due to end. Could you save money by switching energy suppliers when the contract is winding down?
Your timing may also depend on whether you need to pay any exit fees when switching. The cost of exit fees can vary, as it will depend on how long is left on your contract (if applicable).
And as we’ve covered, it’s worth checking the notice period of your contract, as otherwise you may be put onto a ‘rollover contract’ and be liable for costs even once you’ve switched providers.
How long does it take to switch energy suppliers?
Each energy supplier has a different estimated switching time, but generally, you can expect it to take between 3 and 6 weeks to change energy provider. While energy suppliers deliver gas through the same pipes, and electricity through the same wires, it nevertheless can take time for the logistics of the switchover to be completed.
Green energy tariffs explained
The UK government has a target of reaching ‘net zero’ emissions by 2050, meaning there is an aim to have less greenhouse gases produced than the amount removed from the atmosphere. And many businesses are switching to renewable energy providers to make a difference both to the environment, and to reduce the costs associated with energy wastage.
A green energy supplier will often match the electricity or gas you use with energy generation from renewable sources, such as wind farms. In some instances, these suppliers will support renewable energy developments, or have particular policies that preclude nuclear power, for example.
More from Tyl Talks
Switching energy suppliers is just one part of running a business, but there’s a whole lot more that we cover over at Tyl Talks. Get stuck into some of our latest business guides below, or read more about the rising cost of energy and tips for making your business more energy efficient in our special campaign: No Time To Waste.
This has been prepared by Tyl by NatWest for informational purposes only and should not be treated as advice or a recommendation. There may be other considerations relevant to you and your business so you should undertake your own independent research.
Tyl by NatWest makes no representation, warranty, undertaking or assurance (express or implied) with respect to the adequacy, accuracy, completeness, or reasonableness of the information provided.
Tyl by NatWest accepts no liability for any direct, indirect, or consequential losses (in contract, tort or otherwise) arising from the use of the information contained herein. However, this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.