When signing up to business energy contracts, it’s really important to understand the type of contract that you are getting in to. This not only impacts the price you pay, but also the flexibility you have to change requirements or supplier further down the track.
- Rollover or Evergreen contract
This type of contract is automatically renewed until it's cancelled.
Many gas and electricity for business contracts are evergreen, meaning if you don't terminate them with a letter of notice they’ll automatically roll over. Some suppliers renew over 90% of their customers in this way and while it might be convenient, these customers are more than likely to be paying more than they need.
While suppliers have their own rules when it comes to rollover contracts, most write to you before letting you know about their intentions to roll you over. After this, you’ll have a window in which to cancel or your contract will be renewed.
It might be a good idea to make your own note of when the contract is due to end so that you can shop around at that point and try to save some money.
A fixed-term contract fixes the unit rates of your gas and/or your electricity for a certain period of time. While the prices are fixed, your consumption obviously isn’t, so fixed price doesn’t mean fixed monthly cost! This is a good way to protect yourself from energy price increases for a set amount of time.
Also known as out-of-contract rates, these are tariffs that usually apply to a business that have just moved into a new property, or have cancelled their current supply but haven't yet switched to a new supplier.