Business contracts typically last for at least 12 months, and you cannot cancel them before the renewal window opens. Moreover, business energy contracts do not include a cooling-off period. However where there is a will there is a way and we can help assist you to getting out of your business energy contract early!
Exiting a business energy contract can be difficult, but it is feasible depending on your contract’s terms and your particular situation. We can help you to exit your business energy contract early and we run through your options in this post.
How To Terminate Your Business Energy Contract Early
Typically a business energy contract can run from between 1 – 5 years. Bespoke contracts are available for other durations.
The un-written rule is that energy business contracts can not be terminated early, you can not wake up one day and just call your energy provided and they will allow you to cancel, especially if you are fixed at a high unit rate (pence per kWh).
However where there is a will there is a way. One way of cancelling your business energy contract early is if your business circumstances change. For example: If you need to cancel a business energy contract early because you have stopped trading or are moving premises, the process is straightforward.
If you circumstances change and you are not longer residing at that address and let’s say a family member, or new business owner is now responsible then it is likely that you can provide the details on the new tenant and your business energy supplier will close down the current account and will re-open a new account in the new occupiers details. In turn this will terminate the existing contract and allow the new owner / occupier to switch to a new business energy deal either with the same supplier or a new company.
It’s rare an energy supplier will ask for proof of the change in name or occupier, but questions will be asked if there is a large outstanding balance on the account, so we would recommended paying the balance in full or not cancelling a direct debit.
Terminate Your Business Energy Contract
In the autumn of 2022, the wholesale cost of business energy reached unprecedented levels, causing fixed-rate business energy tariffs to become extremely expensive. At this time a lot of businesses made bad decisions and fixed their energy when the wholesale price was at it highest.
During the peak of the energy crisis, the best available fixed unit rates were:
Fixed business electricity rate – 94.25p/kWh
Fixed business gas rate – 38.06p/kWh
Fortunately, business energy prices have since dropped significantly, and much better deals are now available through our business energy comparison service.
However, this offers little consolation if your business is currently locked into high-priced electricity or gas contracts. The federation of Small Businesses estimates that 21% of small businesses are burdened with these costly fixed tariffs.
It is frowned upon to terminate a business energy contract early, but let’s face it these energy companies turn over billions and they do not need to make any more money than they already do. We can’t promise anything, but we can explore your options of ending your contract early and looking to enter you with a new energy company on considerably cheaper rates for both business gas and electricity.
Business Energy Contract Early Termination
By reviewing the contract terms, identifying valid grounds for termination, providing notice, documenting all communications, seeking legal advice, mitigating damages, negotiating or mediating, and considering the consequences, parties can ensure an effective and smooth contract termination process.
We recommend rejecting the renewal offer by sending a termination letter to your supplier. Your renewal letter normally arrives via email or post around 60-90 days prior to your contract expiring. This prevents you from being locked into the renewal prices, allowing you to shop around for a better deal.
In some rare cases if you don’t reject the renewal offer within the required termination window, your supplier will consider it an implicit and unconditional acceptance of another contract term, or you will automatically roll on high our of contract prices, but you are free to leave your current supplier and move to a better energy deal.
If you do nothing, you will be placed onto variable business rates, which are higher prices whether you like it or not. To avoid variable business rates or being renewed by your current supplier, you must provide a contract termination notice or indicate your intention to cancel your current contract when it ends. This must be done in accordance with the contract’s terms and conditions and they normally need 30 days notice.
A contract termination letter is the best way to give this cancellation notice. We strongly advise referring to your original contract terms and conditions or contacting your supplier to determine where to send this letter. This will also confirm the minimum notice period required, typically between 30 – 120 days.
Change of Tenancy For Business Energy Contracts
One way to terminate and exit your business energy contract early is for your current business energy supplier to action a change of tenancy.
If your business relocates from its current property during the term of your business energy contract, you can terminate the contract without incurring any penalties.
To end your business gas or electricity tariff when moving, you must request a “change of tenancy” form from your supplier and provide them with as much notice as possible.
Not many people know this and it’s an industry secret, but by having a change of tenancy taken place this will automatically cancel your existing energy contract and then you are free to leave.
We know of cases where customers may sub let their property, change the name, lend it to a relative or friend. By doing this and making your supplier know this will cancel your energy contract and then you have exited your contract early.
Energy suppliers do not like to admit this and it is not well known, but this defiantly works and has been tried and tested by us!
Blend and Extend Contract
To help small businesses on costly contracts, some business energy suppliers now offer a “blend and extend” option. This allows businesses to benefit from partially lower wholesale energy costs, reducing their energy bills in the short term.
The “blend and extend” option will:
- Extend the length of your fixed tariff by several years.
- Lower the fixed unit price you pay over the remaining tariff period.
Not a lot of energy suppliers offer the option to Blend and Extend, however one energy supplier we partner with who offers a blend and extend is Poztive Energy now known as PE Solutions.
Financially, this option spreads the high rates of your existing fixed tariff over a longer term, effectively delaying the impact. Despite this, it’s an excellent solution for businesses facing short-term cash flow issues.
Compare Energy Deals
After sending your termination letter to your current supplier, you can start comparing energy deals to find better options for your business gas and electricity.
Comparing energy tariffs can be time-consuming and confusing. However, at British Business Energy, we can quickly help you find the cheapest deals on the market!
Getting out of a business energy contract early is indeed possible, and at The Best Energy Rates we are dedicated to assisting you every step of the way to ensure you find the most cost-effective and seamless solution for your business energy needs.