Business Energy

Gas and electricity for microbusinesses

If you run one of the UK’s many microbusinesses, then you’ll be glad to know you now have more freedom when it comes to arranging a better business gas or electricity contract, than other SMEs and larger businesses.

two men shaking hands

All you need to do is ensure you arrange a new deal while you still have more than 30 days remaining on your current business energy contract.

Don’t worry if you’re unsure when your current deal ends as, around 60 days before your energy contract is due to expire, your supplier is required to get in touch with you to let you how much energy you use each year, and provide details on how the price of your current deal compares with any new deal on offer.

Ofgem, the energy regulator, says having this information puts businesses in the ideal position to negotiate a new deal when their current contract is close to expiring, enabling them to either agree prices either with their existing supplier or sign up to a new one.

If you’re on a fixed-term contract, you can find the end-date and notice period on any bill. And you can tell your current supplier that you want to switch at any time before the notice period begins.

What is a microbusiness?

Your business is classed as a microbusiness if:

  • It uses less than 100,000 kWh of electricity a year OR
  • It uses less than 293,000 kWh of gas a year OR
  • If has have fewer than 10 employees (or their full-time equivalent) and its yearly turnover, or yearly balance sheet, is not more than €2 million.

What does this mean for firms who want to switch?

The net effect of the Ofgem changes is that microbusinesses are no longer restricted by short, rigid timeframes when it comes to arranging a new energy deal.

Before the changes took effect, businesses that wanted to switch to a better deal had to do so in a specific timeframe, known as a switching ‘window’, which was defined by their existing supplier.

A business would have to use the window to arrange a new gas or electricity contract that they would switch to when their current deal expired.

The issue with this window was that it varied from supplier to supplier – consistency was lacking, and windows typically lasted anywhere between 60 and 120 days. To make matters more complicated, different suppliers opened their respective switching windows at various points in the life of the existing contract.

If a business missed this window, it was rolled onto – and tied into – a more expensive energy contract, which would normally last a minimum of 12 months. In short, missing the window could prove to be particularly costly.

If your business doesn’t meet the requirements of a microbusiness, and is classed as an SME or large business, these new switching rules will not apply, and you’ll still be bound by a switching window. To find out more, check out our complete guide to business energy.

What are the latest microbusiness energy rates?

All business energy deals are designed to meet the exact needs of your business. The rates you're offered by business energy suppliers will depend upon a number of things, including the amount of gas and electricity you use each year, as well as how and when you use it. Suppliers will also look at the location of your business and its size.

To give you an idea of the rates you could be offered, here are the latest microbusiness energy rates.

Fuel Annual usage (kWh) Average price (per kWh) Standing charge (daily)
Electricity 5,000 - 15,000 44.9p 95.0p
Gas 5,000 - 15,000 18.6p 66.6p

Note: Rates offered may vary according to your meter type and business location. Figures don't include the Energy Bill Relied Scheme discount. Current market volatility may also mean that the prices you’re quoted are different from the averages shown. The figures shown are the average unit rates and standing charges quoted by Bionic per business size from January 3 to January 6, 2023. Rates do not include any Energy Bill Relief Scheme discount.

How to switch microbusiness energy supplier

If you're a microbusiness owner looking to take advantage of this new found freedom, it's recommended that you contact a broker a couple of months before your existing contract expires – as a rule of thumb, start comparing as soon as your current supplier gets in touch with a renewal offer.

This will enable brokers to compare prices and present you with an accurate quote for a new contract that you can switch to when your current deal expires – and a good broker will set this up on your behalf.

If you're not currently in a contract – or an old one recently expired – then you should arrange a new deal as soon as possible in order to secure cheaper rates and minimise your bills.

If you’re currently on a deal that doesn’t suit your business, or you think you’re paying too much for your gas and electricity, give our experts a call now on 0800 088 6986, or request a call back by leaving a few details in the box at the top of the page.