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Is Renewing Your Energy Contract The Best Idea?

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In this evolving business era, the value of energy costs is always increasing or decreasing at a rapid rate, which is why you should always know when to switch to a new energy provider, as it could have a huge impact on your rates.

Many people fail to realize that you cannot change energy suppliers until your existing contract comes to an end due to the restrictions of commercial energy contracts.

However, you should not worry, as this does not mean that you should base your decision to switch on the expiration date of your contract. Instead, you should compare energy prices as soon as your window for switching opens.

In this article, we will be helping you understand when exactly the time to change your energy provider so that in the future, you do not run the risk of overspending.

Understanding the best time to change a business’s energy provider?

Many businesses out there fail to realize that switching energy providers is generally a good idea as it could help their business grow in the long run.

It must be mentioned that you only have a certain time frame to compare prices and make the switch when it relates to both business gas as well as electricity.

Now you might be wondering what the first step that needs to be taken when switching business energy providers is. The answer to that might be a complicated one, but with proper understanding and knowledge, you’ll easily know when to take the move.

You should switch the contract every 12 to 18 months

Many people out there fail to realize that the need to switch needs to be done every 12 to 18 months, but the real question is, why exactly? The main reason why you need to do this is that if you do not do this, your supplier will automatically move it to another tariff. This tariff that your supplier is moving to is one of the most expensive packages.

That is why you need to avoid involving yourself in such a situation. There have been many cases where people have ignored their business suppliers and had to end up paying a tremendous amount of money. 

Now that you have understood when to change it, you might want to know where you could change it. Well, the answer to that is simple you could easily get in touch with professionals that are working at Business Energy Comparison.

After relocating to a new place of work

Changing to a better business energy contract certainly won’t be at the top of your list of priorities when shifting your company into a new location that you are not familiar with; however, for your own safety, you should consider taking care of it right away without any hesitation.

This is mainly due to the fact that whenever a company moves into a new location that is unfamiliar, it is automatically placed on a contract term “deemed rates,” which are often more costly than any prices found in a negotiated agreement.

The great news is that if you’re on deemed rates, you may change commercial energy providers whenever you choose, without having to give any notice and without having to pay any termination penalties.

Understanding your contract type

When it comes to changing business suppliers, many people fail to realize that there are many contract types with their own distinctive characteristics. For instance, a fixed-term contract is a type of contract that is set on a price per unit.

It is worth mentioning that this does not mean that the amount you are going to pay at the end of each month will be fixed. Rather the price per unit will not change under any circumstances.

Another type is the variable rate which is a contract that aims to charge on a unit rate. In this case, the variable rate is solely dependent on market price. The difference between this type of contract and the fixed term is that, in this case, the bill will either go high or low depending on price fluctuations.

The earliest opportunity

Even though we experienced a decline in costs throughout the lockdown, this leveled out around the end of July, and rates have been rising since.

Energy prices are constantly fluctuating but very seldom drop. Because you won’t start to profit from your new rates until your existing contract expires and your new one takes effect, you could believe that it is not worthwhile to compare prices as soon as your switching window starts.

However, that couldn’t be farther from the truth; by committing to a new term as soon as possible, you can lock in current rates and prevent any price increases. This is crucial if you have a lengthy switching window because rates might rise considerably over a six-month period.

Basics of business energy transfer and contract

It is extremely crucial to review some business energy transfer fundamentals, such as your contract’s terms and your obligations as a business energy customer, before comparing business energy bids.

Avoid paying before the time

Just like we have mentioned above, there have been many instances where individuals ignore the time when they should change business energy suppliers, only to end up paying such a high fee.

That is why it is always the best idea to switch in your contract only when you no longer need to pay early exit fees. Perhaps one of the best advantages of doing this is that it could help you keep track, instead of relying on your suppliers.

What is the turnaround time for switching business energy?

There is a misconception that converting your company’s energy is a lengthy procedure and that no savings will be sufficient to justify the bother. 

Only five working days should be needed for the actual transfer. With the help of Ofgem’s Faster Switching program, switching time has been reduced from 6 weeks to only one working week.

But keep in mind that you won’t be converted to your new commercial energy contract until your current one expires. Consequently, if you acquire new rates with six months remaining on your current contract, the transition won’t really occur for another six months.

A new agreement should be set up as soon as possible, notwithstanding this. Customers can save up to 20% when they renew their contracts six months in advance of the contract’s expiration date as opposed to those who do so around the deadline.

Conclusion

So there you go, folks! Hopefully, now you know when is the perfect time for you to switch your business energy supplier. Although at first, it may seem like a difficult thing to do, with proper effort and understanding, you could easily change it.

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