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Ofgem: business energy supplier switches are on the rise, and what that means for UK firms
Ofgem’s latest research shows more UK businesses are changing who supplies their gas and electricity. One in three firms, 33%, said they switched supplier in the last year, up from 26% in 2023. Medium and larger businesses led the increase, though switching overall remains below pre-crisis levels [1] [2].
That matters if your organisation pays separate business energy bills. It shows businesses will move when deals improve, and that there are practical chances to cut costs or get better service. Below we run through the findings, why switching is rising, and a checklist to help you switch without losing time or money.
What Ofgem actually found
Ofgem published a detailed study of business experiences in the energy market. The headline is the rise in switching, from 26% in 2023 to 33% in 2024. The regulator also notes the market structure: dozens of suppliers serve business customers, but six large companies still hold most market share. Switching is higher among medium and large firms. Smaller businesses are less likely to move because of bespoke contracts, complex meters or credit requirements [1] [2].
The State of the Market report adds context. While switching has increased, other measures concern the regulator. Business and household arrears reached about £3.85 billion in the fourth quarter of 2024, and some switching rates remain below pre-crisis norms [2]. The result is a mixed picture: more businesses are prepared to switch, yet rising debt means moves need to be managed carefully.
Why switching is increasing now
Several practical reasons explain the rise.
- Price refreshes. Wholesale costs have stabilised, and suppliers began offering more competitive fixed and flexible tariffs. That prompts procurement teams to review options.
- Contract churn. Many firms were on emergency or temporary deals during the crisis. As those contracts expired, switching became possible.
- Greater awareness. Ofgem and industry outlets have been clearer about how to switch, which has nudged businesses into action.
- More supplier choice. With dozens of suppliers, including smaller specialists, there are additional options for firms that want renewable-only electricity or half-hourly settled tariffs.
Put together, these factors mean that when a contract ends or a better price appears, more firms are prepared to move [1].
What this means for your business
If you run a business that pays separately for gas and electricity, the Ofgem findings are a nudge to review your arrangements. You do not have to switch immediately, but checking your position once or twice a year makes sense. A routine check will flag whether you are on a competitive tariff or tied into a deal that now looks poor.
For medium and large businesses, higher switching activity translates into negotiating power. Suppliers expect churn, which creates room to push for better terms. For smaller firms, bespoke clauses, complex meters and credit checks slow the process. That is not insurmountable, it just requires preparation.
How to switch business energy supplier without pitfalls
Use this practical checklist before you commit to a new supplier. Follow these steps and you will avoid common mistakes that cost time or money.
- Check your contract end date and any exit fees. If you are in a fixed-term contract, read the early termination terms. If the exit fee is large, calculate whether savings from a new tariff cover that cost.
- Confirm your meter type and reads. Is the premises on a half-hourly meter or on a standard MPAN profile? Suppliers price half-hourly consumption differently. Errors here cause billing disputes.
- Gather consumption data and future demand estimates. Have 12 months of invoices or meter reads ready, plus any planned changes that will affect usage, such as new machinery or opening extra hours.
- Prepare documents for credit checks. Suppliers commonly ask for company accounts, bank details and director information. Smaller firms may be asked for a deposit or guarantee.
- Check VAT and business registration. Most commercial energy is standard-rated for VAT, but your tax position will affect the total cost.
- Ask about standing charges, unit rates and any pass-throughs, for example network charges or environmental levies.
- Confirm switching timeframes and who will handle meter reads and contact with your old supplier. A good supplier manages the switch end to end.
If you want a quick run-through of tariff types and how to compare unit rates and standing charges, see our articles on switching offers and sector-specific advice at Energy Switch:
Common pitfalls to watch for
Bespoke contracts. Small and medium firms may sit on negotiated deals with bespoke clauses, volume bands or bundled services. Read them carefully before you act.
Exit fees and rollovers. Contracts can auto-roll into higher out-of-contract rates. Note renewal terms and set calendar reminders.
Incomplete reads and disputed final bills. If you leave without a final accurate read, you may get estimated bills that take months to resolve. Do a meter read on the switch date and keep a copy.
Credit and deposit requests. New suppliers commonly ask for a deposit or parent company guarantee. Factor this into your cash-flow plans.
What regulators and suppliers are doing
Ofgem continues to monitor the retail market and publish data on switching, supplier numbers and arrears. The regulator has set out protections for business customers in areas such as clearer contract information and dispute handling [2]. Suppliers are offering more tailored products aimed at businesses, including renewable electricity options and half-hourly settled tariffs for sites with smart meters.
If you are unsure whether your business should move, start by asking your current supplier for a review and a renewal price. Many suppliers will offer a retention deal, and sometimes that is the best option. If you use a broker or comparison service, check what fee they charge and how they are paid.
Q: How long does a typical business energy switch take?
A: Most switches complete within 20 working days, though half-hourly meter moves and complex multi-site transitions can take longer. Your new supplier should confirm a timeframe.
Q: Will switching harm my credit rating?
A: Suppliers perform credit checks. A single check is unlikely to harm your rating materially, though frequent applications may have an effect. Prepare financial documents to speed approval.
Q: Are there protections for business customers like the domestic price cap?
A: The domestic energy price cap does not apply to businesses. Business customers must rely on contract terms and supplier competition, and Ofgem monitors the market for fairness and transparency [2].
Q: Do I need a broker to switch?
A: No. You can switch direct. A broker can help with complex sites or aggregated buying power, but they may charge a fee. Always ask how they are paid.
Sources
- Businesses’ Experiences of the Energy Market 2024, Ofgem research report, March 2025, https://www.ofgem.gov.uk/sites/default/files/2025-03/Businesses%27%20experiences%20of%20the%20energy%20marker%202024%20-%20main%20research%20report.pdf
- State of the Market Report, Ofgem, April 2025, https://www.ofgem.gov.uk/sites/default/files/2025-04/OFG2296_State%20of%20the%20Market%20Report.pdf
- “Ofgem research shows business energy supplier switches on the rise,” Solar Power Portal, March 2025, https://www.solarpowerportal.co.uk/solar-technology/ofgem-research-shows-business-energy-supplier-switches-on-the-rise
