Am I leaving it too late to renew my business energy?

Am I leaving it too late to renew my business energy?

So, you’ve scoured the market for the best energy deal possible for your business. You’ve dotted the I’s and crossed the T’s on the new contract and you’re all set for the next five years.

It’s only natural that once you’ve renewed your energy, you put it to the back of your mind and focus on the more immediate tasks at hand. Whilst this makes sense initially, failing to maintain a close eye on the sector over the duration of your contract could result in a big surprise as your renewal date approaches.

Future energy prices are volatile and likely to fluctuate over time. We need only look at the current climate, including the impending impact of Brexit and the recent rise in inflation rates, to realise how unstable the market is.

When discussing early renewals with businesses, the same three questions tend to arise. In the following piece, we’ll answer those queries and clear up any concerns you may have!

Q.) What happens if I don’t renew my energy contract in time?

To adhere to recent Ofgem regulations, your energy supplier should notify you of your contract end date at least 42 days prior to expiry. Despite this, numerous firms fail to renew in time and end up on the dreaded “out of contract” rates.

This is when a gas or electricity contract expires, and no suitable alternative has been found, so your current tariff will alter to a default charge. In the majority of cases, this will be a large increase compared to what you’re currently paying. Whilst action has recently been taken by the UK government to scrap these charges for consumers, businesses will continue to face charges for failing to renew in time.

These potentially expensive rates highlight the importance of renewing your energy early, especially considering how easily avoidable the whole situation is. Remember, it can sometimes take weeks to switch supplier. So, if you want to avoid those pesky charges, act fast!

Q.) I still have two years left on my current deal, surely there’s no point in looking yet?

That seems logical, but in this scenario, you’d be wrong.

Try asking yourself the following question:

If someone could guarantee me today’s petrol prices in two years’ time, would I accept their offer?

Like most, we imagine the answer would be yes. With energy, the exact same situation applies. Unbeknownst to many, UK businesses are entitled to renew their energy whenever they please, regardless of how long is left on their current deal. With energy costs forecast to rise, a 2018 rate in 2020 would be more than advantageous.

Surely a supplier wouldn’t want to do that?  Well, an energy supplier will build a risk factor into their current pricing if you’re looking to negotiate a future contract.  That’s why it’s worth having a trusted advisor to help you weigh up the best scenario for you.

Businesses looking to renew their energy early are advised to contact an energy consultant. They can work on your behalf to renew your contract regardless of the length of time remaining. Once you’ve agreed terms and signed the contract, your new tariff will go live immediately following the completion of your current term.

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Q.) I don’t have the time or resource to manage my energy internally, what help is available to me?

A common complaint amongst businesses is the lack of internal resource to manage their energy in-house. Finding and negotiating the best deal requires a specialist with a proven-track record of dealing with businesses such as yours and a knowledge of discounts, rebates and the market itself.

Consider using an energy consultant to overlook your account. A competent consultant will keep abreast of current market fluctuations, informing you of significant changes in prices. When you’re happy to renew, they’ll also use their buying power to negotiate the contract on your behalf, ensuring you get the best deal for your business.

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