If your business pays for gas or electricity, you have an energy contract — whether you know it or not. Understanding how these contracts work is the single most effective way to stop overpaying.
How business energy contracts work
Unlike domestic energy, business energy is not covered by the Ofgem price cap. That means your supplier can charge whatever the market will bear — and they do. Business energy contracts are negotiated individually, and the rate you pay depends on your usage, your location, your credit history, and critically, when you sign.
A typical business energy contract locks in a unit rate (the price per kWh of gas or electricity) and a standing charge (a daily fee regardless of usage) for a fixed period — usually 12, 24 or 36 months.
What happens when your contract ends
This is where most businesses lose money. When your fixed-term contract expires, your supplier doesn't just stop charging you. They roll you onto what's called an "out-of-contract rate" or "deemed rate" — and it is almost always significantly more expensive than your contracted rate.
Out-of-contract rates can be 40–80% higher than negotiated tariffs. Many businesses don't even realise they're on one until they check their bill. If you haven't actively renewed your contract, there's a good chance you're overpaying right now.
When to start looking for a new deal
The ideal time to start comparing energy deals is 6 months before your contract ends. This gives you enough time to:
- Get quotes from multiple suppliers
- Compare rates properly without time pressure
- Complete the switching process before your contract expires
- Avoid rolling onto expensive out-of-contract rates
Most suppliers will let you lock in a rate up to 6 months in advance, so you can secure a good deal early and have it start the day your current contract ends.
Fixed vs variable rates
Fixed-rate contracts lock your unit rate for the duration of the contract. You know exactly what you'll pay per kWh, which makes budgeting predictable. In a volatile market, this protects you from price spikes.
Variable-rate contracts (also called "flex" or "pass-through") move with the wholesale market. When wholesale prices drop, you pay less. When they rise, you pay more. These suit larger businesses with dedicated energy buyers who can manage the risk.
For most SMEs, a fixed-rate contract is the safer choice.
Multi-site contracts
If your business operates from multiple premises, you can often negotiate a single contract covering all sites. This gives you volume leverage — the more energy you buy, the better your rate. It also simplifies your administration: one contract, one renewal date, one bill.
Does switching affect my supply?
No. Switching energy supplier does not affect your physical supply in any way. The same pipes deliver your gas and the same wires deliver your electricity regardless of which company bills you. The switch is purely administrative — there is zero disruption to your business.
How we can help
At Bee Compared, we compare business energy rates across all major UK suppliers. We handle the comparison, the paperwork and the switch — you just approve the deal. We track your renewal dates and contact you before your contract expires so you never roll onto expensive out-of-contract rates.
Want us to check your rates?
Call us on 020 3326 2626 or get a free comparison.