Energy Prices, Switching and Exit Fees

In today’s complex energy market, understanding your rights surrounding energy prices, switching suppliers and exit fees is essential for every UK business. Navigating these complexities can help you avoid unnecessary costs and ensure your business is always on the best possible tariff.

Understanding Energy Prices

Energy prices in the UK have experienced significant fluctuations in recent years, impacting businesses of all sizes. Fixed-rate tariffs offer price certainty, while variable tariffs can expose your business to market changes. It is crucial to regularly review your energy contracts and compare available tariffs to ensure you are not overpaying for your energy supply.

The Process of Switching Energy Suppliers

Switching energy suppliers is a straightforward process, designed to be fair and transparent under UK law. Ofgem, the energy market regulator, ensures that businesses are protected throughout the switching process. 

Key points to consider include:

• No Disruption to Supply
  Your energy supply will not be interrupted during the switch.
  
  
• Cooling-Off Period
  After agreeing to a new contract, you have a 14-day cooling-off period to change your mind without penalty.
  
  
• Final Bill Accuracy
  Your previous supplier must provide an accurate final bill based on your last meter reading

Switching suppliers can often result in substantial savings, but it is important to understand the terms of your current contract before making a change.

Exit Fees: What Are They and When Do They Apply?

Exit fees, also known as cancellation fees, are charges imposed by energy suppliers if you terminate your contract before the agreed end date. These fees are most commonly associated with fixed-term contracts, which typically last between 12 and 36 months. The purpose of exit fees is to compensate suppliers for the energy they have purchased in advance on your behalf.

Energy exit fees usually range from £5 to £60 per fuel (gas or electricity), depending on your supplier and contract length. Dual-fuel contracts may incur separate exit fees for gas and electricity. However, variable rate tariffs generally do not have exit fees, offering greater flexibility.

How to Avoid Paying Exit Fees

There are several circumstances in which you can avoid paying exit fees:

• End of Contract Period
  Suppliers cannot charge exit fees if you switch within the last 49 days of your contract.
  
  
• Cooling-Off Period
  You can cancel a new contract within 14 days without penalty.
  
  
• Supplier-Initiated Changes
  If your supplier increases prices or changes contract terms, you may be able to switch without incurring exit fees.

Always review your contract terms carefully and consult with a legal expert if you are unsure about your obligations.

Why Legal Support Matters

Understanding the fine print of your energy contract can be challenging. At Energy Solicitors, we provide expert legal advice to help businesses:

• Review and negotiate energy contracts
• Identify and challenge unfair exit fees
• Ensure compliance with all regulatory requirements

Get in touch with us today to find out how Energy Solicitors can help.