In short
The cheapest business energy contract depends on your usage and terms, not on a single supplier or unit rate. Compare the total cost (unit rate times your consumption plus standing charges over the term), check exit fees, commission and what happens at renewal, and compare in your switching window. No one can honestly promise the cheapest price.
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No one can promise the cheapest price
Searches for the cheapest business energy supplier are understandable, but there is no honest single answer. Business energy is priced individually: a supplier that is keen on one kind of customer, region or contract length can be expensive for another. Prices also move with the wholesale market, so the most competitive quote this month may not be next month.
What you can do is make sure you are comparing like-for-like and judging the whole contract. That is the approach this guide sets out, and it is how we work: Forever Communications works as an agent of Fidelity Energy, which prices your supplies across its panel of 24+ suppliers (Fidelity Energy's figure). We help you weigh the quotes; you choose.
Why the lowest unit rate is not always the cheapest contract
| Factor | How it changes the real cost |
|---|---|
| Standing charge | A daily charge you pay whatever you use. A low unit rate with a high standing charge can cost more for a low-use site. |
| Your consumption | The same two quotes can rank differently for a high user and a low user. Work the cost out on your own annual use. |
| Contract length | A longer fix can price differently from a shorter one. Compare quotes of the same length, or compare the cost per year. |
| Commission in the rates | Broker commission is usually included in the unit rate and/or standing charge. Check the principal terms. |
| Exit terms | Exit fees or a lack of termination clauses can make a cheap contract expensive if your plans change. |
| Green add-ons | A REGO-backed or green gas option may carry a premium. Compare like with like. |
| What happens at the end | Rollover to a new fixed term or out-of-contract rates can cost more than the contract itself if you miss the renewal window. |
| VAT and Climate Change Levy | These follow government and HMRC rules, not the supplier's pricing, but check they are treated correctly for your use. |
For explanations of unit rates, standing charges and tariffs themselves, see our sister site Business Gas and Electric.
Not sure which option suits you? Ask us
Tell us about your premises and usage and we will explain the options that fit.
How to compare quotes like-for-like
- Use your real consumption. Take your annual kWh for each supply from recent bills, not an estimate from a different year or site.
- Work out the total cost per year. Multiply each unit rate by your annual consumption, then add the standing charge for 365 days. Do this for every supply.
- Match the contract lengths. Compare a one-year quote with a one-year quote, or convert longer contracts to a cost per year.
- Match the start dates. A quote that starts on a different date may reflect a different market period.
- Read the terms. Exit fees, termination clauses, notice periods and what happens at the end of the term.
- Check the commission. The principal terms show the broker costs included. See energy broker fees.
We lay quotes out in this way when we go through them with you, so the comparison is about the same thing in each column.
Timing your renewal
When you compare can matter as much as who you compare. Ofgem says fixed-rate business contracts include a switching window that opens a few months before the end of the contract, and that you can sometimes switch during it without paying a fee. Comparing then means:
- Quotes can be priced to start the day after your current contract ends, without a gap
- You can accept a new contract before you drift onto a rollover or out-of-contract rates, which Ofgem says are usually more expensive than fixed-term contracts
- If you are a microbusiness, you can compare your current supplier's renewal price information with other quotes
Ofgem also notes that the best option may be your current supplier. A renewal offer is worth comparing, not ignoring. Our business energy contract renewal guide covers the timing in detail.
Want this looked at for your premises?
Tell us your sites, meters and renewal dates and we will reply by email with options.
The expensive defaults to avoid
Two situations often cost businesses more than any contract they would have chosen:
- Deemed rates: Ofgem says you are put on a deemed contract when you move into premises without arranging a contract, or if your supplier goes out of business, and that deemed rates are usually higher than negotiated contract rates. See deemed rates
- Out-of-contract rates: some suppliers apply them when a fixed term ends and no new contract has been agreed. Ofgem says they are usually more expensive than fixed-term contracts
Ofgem says that without an agreed fixed-rate contract you can switch to a new supplier at any time. If you have just moved premises, our change of tenancy guide explains what to do first.
Fixed or flexible: which costs less?
There is no general answer. Ofgem says a fixed-rate contract fixes your unit rates and standing charges for the length of the contract, whatever happens to wholesale prices, which suits businesses that want budget certainty. Flexible (or structured) contracts let you buy energy in smaller portions over time instead of locking in one price, which leaves you more exposed to market movements; Ofgem says they suit large businesses that use a lot of energy. Which works out cheaper depends on what the market does after you sign, which no one can know. Our page on fixed vs flexible business energy sets out who each suits.
Questions to ask about any low quote
When one quote looks much lower than the rest, it is worth asking why before you accept it. Useful questions:
- Is it for the same contract length and start date as the others?
- Does it include every site and meter, and the same consumption figures?
- What is the standing charge, and how does the total compare on my annual use?
- Is it a fixed price for the whole term, or can any part of it change?
- What are the exit fees and termination terms if my business moves or closes?
- What happens at the end of the term, and when will I hear about renewal prices?
- How much broker commission is included, according to the principal terms?
- Is any green element (such as REGO-backed electricity) the same as in the other quotes?
None of these questions means a low quote is wrong. They make sure the lowest price on paper is also the lowest cost in practice.
Multi-site businesses
For groups with several premises, the cheapest overall position is often about structure as much as price. Contracts that end on different dates mean several separate renewals each year, each with its own window to miss. Lining up end dates can make it easier to compare the whole estate at once and to spot sites that have drifted onto out-of-contract rates or deemed rates.
Larger sites may also be half-hourly settled, where the price depends on when you use electricity as well as how much. A site with heavy daytime use and one with overnight use can price very differently. See half-hourly business electricity for what to share for those quotes.
Getting quotes to compare
The fairest comparison is several quotes priced on the same day, on the same basis, for the same term. Fidelity Energy requests quotes from its panel for you, and we go through them with you so you can see total cost, terms and commission side by side.
See what to have ready on our business energy quotes page, or contact us with your bills and contract end date.
How Forever Communications helps with business energy
Forever Communications is part of Forever Group, which looks after phone systems, business mobiles and connectivity for UK organisations. For business electricity and gas, we work as an agent of Fidelity Energy, an independent business energy broker that prices your requirements across its panel of suppliers. We are not an energy supplier, and neither is Fidelity Energy.
- Like-for-like quotes: we help you gather your bills, meter details and contract end dates so suppliers quote on the same basis
- Plain-English terms: we can talk you through unit rates, standing charges, contract length, renewal and the broker commission included in the price before you decide
- Better timing: we help you plan a renewal ahead of your contract end date, or move off deemed and out-of-contract rates
- More than the basics: Fidelity Energy also offers green (REGO-backed) electricity, flexible procurement, half-hourly supplies, multi-site contracts and bill validation
- Your choice: you decide which quote, if any, to accept; prices are set by the suppliers and confirmed at quote
We work with businesses, charities, hospitality, farms and multi-site organisations. Send us a recent bill and we can take it from there.
Frequently asked questions
Who is the cheapest business energy supplier?
There is no single cheapest supplier for every business. Suppliers price each business individually, based on consumption, meters, location, credit position, contract length and the market on the day. The only reliable way to find the lowest cost for you is to compare quotes priced on the same basis.
Is the lowest unit rate the cheapest business energy deal?
Not always. A low unit rate can come with a high standing charge, a longer term, exit fees or costly end-of-term arrangements. Work out the total cost on your own annual consumption and read the terms.
When is the cheapest time to renew business energy?
No one can predict market movements, but comparing during your switching window (usually a few months before your contract ends) helps you avoid rollover and out-of-contract rates and gives you time to compare properly.
Are energy brokers more expensive than going direct?
Ofgem says most brokers are paid commission by the supplier you choose, which is included in your rates, so it is worth checking. Suppliers must show broker fees in the principal terms of your contract. Weigh that against the time saved and the number of suppliers a broker can compare.
Can I get the cheapest business energy if I have bad credit?
Your credit position can affect which suppliers will offer you a contract and on what terms. Suppliers (and Fidelity Energy) may apply credit criteria, and any supplier can decline. Comparing across a panel of suppliers gives you more than one supplier to ask.
Still have a question about business energy contract comparison?
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