What are business energy deals, and how do they differ from home deals?
Business energy deals are the contracts firms sign to buy gas and electricity, and they work differently from the tariffs you see for your house. Ofgem says the terms, pricing and regulations differ from standard home energy contracts. If you run your business from home, Ofgem says you are probably still on a domestic contract, so check with your supplier.
The Do-Nothing Default bites harder at work. Contracts that roll over quietly, or rates you drift onto when a deal ends, are how businesses end up paying more than they need to. A little attention before you sign, and again before the end date, goes a long way.
Ofgem lists five things to know before you agree to any of the business energy deals on offer.
- What type of contract it is.
- How long the term is.
- Whether there are any fees, including those in special clauses.
- What protections you have.
- Whether broker fees or commissions are included in the price.
Key takeaways
- Business energy deals come in several types, and suppliers may not offer all of them.
- Deemed and out of contract rates are usually more expensive than a negotiated deal, according to Ofgem.
- Microbusinesses get extra protections, including on renewal information and notice periods.
- There is no cooling off period after you agree a business contract, so check before you sign.
Which types of business energy deals are there?
Ofgem describes six main types. Which business energy deals you can get usually depends on the size of your business and how much energy you use.
- Fixed rate: unit rates and standing charges stay the same for the length of the contract, whatever happens to wholesale prices.
- Variable rate: the price can go up or down during the contract, for example when wholesale prices change.
- Deemed rate: you are put on this automatically when you move into premises without arranging a contract, or if your supplier goes out of business. Ofgem says deemed rates are usually higher than negotiated contract rates.
- Out of contract: some suppliers move you onto these rates if your fixed term ends and you have not agreed a new deal. Ofgem says they are usually more expensive than fixed term contracts.
- Rollover or evergreen: the contract renews automatically at the end of a fixed term. Ofgem says the new term is usually 12 months and may be on a higher rate.
- Flexible: sometimes called structured contracts, these let large businesses buy energy in smaller portions when market conditions are better.
For most small firms the real choice is between a fixed deal and a variable one. Our guides on fixed price business energy and flexible against fixed contracts go into the trade offs.
What protections do microbusinesses get on business energy deals?
Ofgem says a microbusiness has fewer than 10 employees and an annual turnover or balance sheet total of no more than £2 million. You can also qualify on energy use alone, if you use up to 100,000 kWh of electricity or up to 293,000 kWh of gas a year. That second test matters, because a firm of three people running energy hungry equipment can fall outside the microbusiness bracket on usage even though it looks like a microbusiness in every other way.
If you are a microbusiness, Ofgem says your supplier must provide clear information about your contract, and provide information about renewal prices before your contract ends. For evergreen contracts it must also limit termination notice periods to 30 days and acknowledge a request to end the contract within 5 working days.
Ofgem sets a small business at 11 to 50 employees, with an annual turnover of up to £6.5 million or a balance sheet total of no more than £5 million, or energy use of up to 200,000 kWh of electricity or 500,000 kWh of gas a year. Microbusinesses and small businesses can get support with energy contracts from Citizens Advice, and help with unresolved supplier complaints from the Energy Ombudsman.
Some suppliers may use either your business size or your energy use to decide which protections apply, so ask which test they use. Business energy deals look different once you know which category you are in.
Should you use a broker or a comparison site for business energy deals?
You can arrange business energy deals yourself, or use a broker, a consultant or a price comparison service. Ofgem says to check which suppliers a comparison website includes, whether it covers the whole market or only a selection, and whether it receives commission from suppliers. That is sensible advice for any comparison service, including ours.
Brokers charge for their services. Ofgem says some charge an upfront fee, but most are paid a commission by the supplier you choose. If a supplier pays the broker, Ofgem says the broker must belong to an approved redress scheme. It suggests checking the Energy Ombudsman broker register or the Utilities Intermediaries Association accredited member list.
Ofgem also warns that there is no cooling off period after you agree to your contract, so it matters that you use a trusted route. That is the single most important line on this page: once you have agreed, you are in. Read the whole contract, including special clauses and what happens at the end. Our guide to the best business energy plan covers what to weigh up.
When you are ready to look at business energy deals, comparing takes a few minutes.
Frequently asked questions about business energy deals
- What is the difference between fixed and variable business energy deals?
- A fixed rate contract keeps unit rates and standing charges the same for the whole term. With a variable rate contract the price can rise or fall during the term.
- What is a deemed rate?
- It is the rate you are put on automatically if you move into premises without arranging a contract, or if your supplier goes out of business. Ofgem says deemed rates are usually higher than negotiated contract rates.
- Am I a microbusiness?
- Ofgem says yes if you have fewer than 10 employees and an annual turnover or balance sheet total of no more than £2 million, or if you use up to 100,000 kWh of electricity or 293,000 kWh of gas a year.
- Is there a cooling off period on business energy deals?
- Ofgem says there is no cooling off period after you agree your contract, so check the terms carefully before you sign.
- Do I need a broker to find business energy deals?
- No. Ofgem says you can arrange a contract yourself, or use a broker, consultant or comparison service. If a supplier pays the broker, check that it belongs to an approved redress scheme.
Sources
- Ofgem, Get a business energy contract supports the five things to know, the six contract types, the point that deemed and out of contract rates are usually more expensive, the microbusiness and small business definitions and kWh thresholds, the microbusiness protections including the 30 day notice cap and the 5 working day acknowledgement, the absence of a cooling off period, and the guidance on brokers, commission and approved redress schemes.
Checked 4 November 2026.
