The most common advice I hear is that you should start looking for a new energy supplier 6 months before your contract is set to end and unfortunately, this is poor advice. There is no specific time that is “best” to switch your business’ energy supplier. Each business has different needs and contract lengths. The best time for your business will depend on a number of factors.
Why it’s important to stay on top of your business’ energy contract
There are 2 main reasons to stay on top of your energy contract:
- The vast majority of energy contracts rollover onto market based rates after expiring if you do not sign a new contract or opt out. Rollover rates are used as an assurance for energy providers. Without a contract you get charged a premium to cover your usage.
- Recognizing advantageous times to renew or change energy suppliers. Things like severe weather, regulation changes, seasonality, and the price of fuel affect energy prices.
You never want to enter a new contract that interferes with an existing contract as you will incur cancellation fees. You can, however, sign a contract with a future start date. Let’s say you were in a 3 year contract and 2 years into it the market dips, you can take advantage of that dip and lock in the current cheaper rates for when your contract ends in a year.
Why do I need to switch energy suppliers?
Suppliers don’t offer better rates to existing customers, so loyalty won’t get you cheaper rates. Also, just because one supplier had better rates when you originally signed the contract, doesn’t mean they will be the best presently.
Supplier offers and pricing change regularly with the market and various other external factors. It is worth comparing suppliers every time you are looking for energy rates to see which supplier is best for your business at the time.
If you want help, you can get a free quote through us and we will use our 22+ years of experience and network of 25+ suppliers to get you the best price available.
When is the best time to switch your business’ energy supplier?
The best time to switch your energy supplier is going to depend on a couple factors:
- How much time is left in your contract.
- What is the current state of the energy market?
- Are there any global events affecting energy pricing?
Assuming you had 1+ years left in your contract, the energy market was stable and no global event was affecting energy prices you could take advantage of spring and fall months where energy prices are historically lower. Unfortunately, it’s almost never that simple.
Currently in 2022, the energy market is likely going to continue to rise due to increased energy regulations, the effects of the Keystone pipeline being closed in 2021, oil and natural gas leases not being renewed, and the war in Ukraine. So waiting will not be the best solution for many businesses.
How to find your new energy supplier
Businesses have 2 ways to find a new supplier and here are the pros and cons of each.
Direct to supplier
Working with an Energy Broker
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