How do business electricity contracts work?

Your business electricity contract sets the pricing method, term, extra charges and what happens at expiry. A fixed unit rate does not fix consumption or every separately charged item. Ofgem limits evergreen termination notice periods for microbusinesses to 30 days [S1]. Identify the contract type and renewal conditions before approving changes to your site's supply. Checked October 2026.

Last checked 17 October 2026

What does a fixed, variable or pass-through contract mean?

Your contract determines which prices are fixed and which can change. Start with the pricing schedule, then read the definitions and exceptions attached to it. Ofgem’s research distinguishes fixed, variable, flexible and pass-through arrangements [S3]. Treat the label on an introductory email as a starting point for checking the terms.

Flexible purchasing and pass-through charges describe different aspects of an arrangement. The former concerns when energy is bought; the latter concerns recovery of costs such as network charges and levies [S3]. Ask whether both apply. Request a marked schedule of included, excluded and variable items.

A kilowatt-hour (kWh) measures energy. Kilowatts (kW) measure power. Request annual consumption and interval data separately from the capacity rating of your supply. Start at the business electricity prices hub for consumption-band context, then use your actual schedule to assess expenditure. We explain supply terms and refer installation enquiries; we do not procure energy contracts for you.

Ofgem’s household price cap excludes business energy contracts [S5]. Keep household capped prices out of your commercial contract assumptions.

How do you know whether you are on deemed or out-of-contract rates?

Moving into premises and using electricity without arranging a supply agreement can place you on a deemed contract. Out-of-contract rates can follow expiry of a fixed arrangement [S1]. Ask the supplier to identify your current status in writing if you cannot find an agreement covering the period.

Keep the move-in meter reading, tenancy start date and the date you assumed responsibility together. Request the applicable rate schedule and an explanation of any mismatch between those records and the bill. If a landlord handles the supply, establish whether you hold a retail energy contract or receive a recharge before relying on retail-contract guidance.

Do not treat silence at expiry as an agreed extension of the old price. Read the expiry clause and put its outcome on your renewal sheet. Keep an unresolved historic bill separate from the decision about future supply, with an identified person responsible for each.

How long are contracts and when must you give notice?

Use the term written in your agreement. Record the start date, end date, earliest permitted termination date, notice deadline, required notice method and acknowledgement. Ofgem’s switching guidance says to check contract dates, notice requirements and early termination fees before arranging a change [S2].

There is no useful universal renewal window for every business. Your process should begin early enough to check the contract and authorise any action before its actual deadline. Set reminders from that deadline rather than from an assumed industry convention.

For example, suppose an agreement states an illustrative end date of 31 December and requires notice received 30 days beforehand. Your worksheet must work backwards from that receipt requirement and allow time to resolve delivery questions. This is an assumed contract example, not a statement that your contract has those terms.

Before signing, ask your solicitor to review early exit, closure, assignment and change-of-occupier clauses. A contract term should also fit your premises plans: identify any unresolved mismatch between the supply term and the remaining tenancy before authorising acceptance.

What extra protections apply to a microbusiness?

Ofgem includes an electricity-use qualification of up to 100,000 kWh a year. Its separate size test uses fewer than 10 employees and turnover or balance-sheet total no greater than £2 million [S1]. Ask the supplier to confirm the classification applied to your account.

For qualifying evergreen contracts, Ofgem specifies a maximum 30-day termination notice period and acknowledgement within 5 working days. It also requires clear contract and renewal information [S1]. These evergreen provisions should not be turned into a claim that any fixed-term contract can be cancelled on that notice.

File the classification confirmation with your renewal records. If the supplier disputes it, send the relevant consumption or business-size evidence and request a written explanation. This guide’s Ofgem protections concern Great Britain; do not assume they establish the applicable rights for a Northern Ireland supply.

Does half-hourly metering change your contract or bill?

Half-hourly settlement uses interval consumption to allocate electricity purchases and costs. Ofgem’s business guide explains the requirements for the relevant advanced-meter customers [S4]. Ask for your current status rather than assuming that a familiar meter display means the account is unchanged.

Check who provides metering and data services and whether those fees sit inside the supply price. Ofgem advises checking agent agreement terms alongside the supply contract [S4]. Your renewal file should show the parties, charges, end dates and responsibilities for both.

For proposed chargers, request a demand profile showing when vehicles need electricity. For solar and batteries, request an import forecast after generation and storage. Give those forecasts to the person reviewing volume or profile conditions in the supply agreement. Read half-hourly metering and DUoS and standing charges before allocating project costs.

What should you check before renewing?

Prepare a review sheet covering energy rates, daily charges, pass-through items, levy treatment, volume conditions, renewal and termination. Read CCL explained with your accountant and test any proposed installation in the solar and battery bill guide.

Use the site check to prepare your energy project, then get matched with an installer that covers your area.

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