How to Read a Business Energy Contract
Your signature locks in how many pence you pay per kWh, what happens on the end date, and whether network or policy costs can move underneath you. This walk-through follows the order UK suppliers actually use—so you can cross-check against a quote from British Gas Business, E.ON Next or a broker without missing the pricey clauses.
Next step: If you use under about 50,000 kWh a year, you can get a quote in under 90 seconds online — fast, no obligation. Larger supply, half-hourly metering, or prefer chat? Use the contact page.
Key takeaways
- The contract schedule (sometimes called the “tariff matrix”) is the only place where your unit rate and standing charge are legally fixed for the term—ignore marketing PDFs.
- Pass-through wording means charges such as DUoS (local network use) or policy costs may rise even if your headline rate is “fixed”. Our pass-through guide decodes that layout.
- Notice windows are not polite suggestions: miss the date and you can roll into deemed rates—often 35–50% above a negotiated contract when volumes sit around 25,000 kWh/year.
- If a TPI has presented the deal, look for a letter of authority scope that matches what you think you signed; it should not blanket-authorise “all meters” unless you meant that.
Where to start when the PDF is 40 pages long
Flip first to the order form or contract schedule near the back. That chunk lists your MPAN or MPRN, supply address, start date, end date, unit rate in pence per kWh, and standing charge in pence per day. Everything else is conditions of service. Typical SME electricity quotes in 2026 cluster roughly 24–28p/kWh plus a standing charge around 65–140p/day depending on region and term—but your schedule is the only figure that matters legally.
Next, open the termination page. You are hunting for three numbers: how many days before the end you must notify; whether auto-rollover exists; and what fee applies if you leave early. Ofgem licence conditions require suppliers to communicate these rules for microbusinesses, but larger firms still need to self-police—if you are unsure which bucket you sit in, read microbusiness energy rules next.
Fixed price does not always mean “frozen bill”
Language matters. A “fully fixed” product should include commodity, environmental and network elements listed in the contract wording. A “pass-through fixed” (or hybrid) deal may freeze the wholesale slice only, while DUoS or BSUoS (balancing costs) tick up when National Grid publishes new tariffs. Ask the salesperson to circle the clause—bullets in the schedule often hide the distinction.
Picture a Midlands workshop on 18,000 kWh/year that signed a 24p/kWh “fixed” deal where DUoS was pass-through. Network charges moved after a local DNO price control review. Their kWh rate stayed flat but the bill still jumped £18/month because the contract allowed those p/kWh adders to float. That is legal if the wording says so—your defence is reading before signing, not complaining afterwards.
Fees, green add-ons and broker payment clauses
Scan for exit fees (sometimes expressed as £/MPAN or £/site), “deemed contract continuation” paragraphs, and renewable or REGO premiums. If REGOs are bundled, the schedule should say how many £/MWh you pay—compare that to standard market REGO forward prices before you treat the deal as good value.
Broker commission is rarely a line on your bill. It is baked into the unit rate or paid as an uplift from the supplier. Ofgem’s rules for suppliers and third-party intermediaries now push harder on declaring indirect payments than they did a decade ago, but you should still ask “how are you paid?” and capture the answer in email. If the answer is vague, pause.
Contract vs bill sanity check (print this table)
Use the invoice you received immediately after go-live; older bills may still reflect deemed rates.
| Clause / line item | Where it hides in the contract | What to verify on the bill |
|---|---|---|
| Unit rate | Schedule—electricity or gas rate box | Should match to two decimal places once CCL and VAT are stripped |
| Standing charge | Same schedule, “per day” row | Multiply by billing days; watch pro-rata if you mid-term switched |
| CCL | Usually referenced under “government levies” | Cross-check HMRC’s published main rate (currently about 0.78p/kWh for electricity—confirm each April) |
| DUoS / red bands | Pass-through appendix | Half-hourly meters show time bands A–D; ask the data collector if the code names confuse you |
| Meter operator | MOP/CD charges schedule | Should align with the MOP agreement number on your welcome pack |
Red flags that mean “get legal or broker advice now”
Personal guarantees for limited companies, uncapped “market tracking” after hedge windows, or cooling-off waivers for microbusinesses should trigger a second opinion. Likewise, any clause that lets the supplier vary the rate on “material change in law” without defining the remedy deserves a highlighted question to the counter-signer.
Dig deeper on flexible versus fixed contracts before you accept a tracker, and read what happens when your business energy contract expires so your calendar reminders line up with the notice clauses you just circled.
What do you want to do next?
Browse more independent guides on the SwitcherMate Business energy hub. If you would rather speak with us about procurement or a complex site, use the contact page. For fast online comparison under typical small-use thresholds, you can also use our business quote tool where it fits your situation.