Rollover contracts for business energy

A rollover (also called an automatic renewal) happens when your fixed-term contract ends and the supplier moves you straight onto a new fixed term, usually at its renewal rates. Many owners only discover it when a higher bill arrives. This guide explains the rules, how an evergreen contract differs and how to avoid being caught out.

Rollover vs evergreen vs out-of-contract

Arrangement	What happens at the end of the fixed term	Can you leave?
Rollover	New fixed term begins automatically	Check the renewal terms; any exit fee during the new term depends on your contract
Evergreen	Contract carries on with no fixed end date	Yes, on notice of up to 30 days for a microbusiness
Out-of-contract	You are on the supplier's standard rates	Yes, no termination fee, and a microbusiness cannot be made to give notice

The microbusiness rules

Ofgem's licence rules for microbusinesses, strengthened by its March 2022 decision, say:

• A supplier may roll a fixed-term contract over only if it has given the required renewal information (a Statement of Renewal Terms and the Principal Terms), you have not served notice that stops the renewal, and the new term is 12 months or less.
• From 1 October 2022, a supplier cannot require a microbusiness to give notice before switching or terminating, except under an evergreen contract, where notice can be up to 30 days.
• If you are out of contract, no termination fee may be charged.

If you are not a microbusiness, these protections may not apply, so your contract terms matter more. Check where you stand in what is a microbusiness for energy.

This page does not state a fixed number of days for blocking a rollover, because the deadline that matters is the one in your own renewal letter and contract. They should tell you what you need to do and by when. If they do not, ask in writing, and act as early as you can.

How to stop a rollover

1. Find your end date. See how to find your contract end date.
2. Read the renewal letter. It should explain how to decline.
3. Serve notice in writing. Email your supplier, say you do not want the contract to renew, quote your account and meter numbers (MPAN or MPRN) and keep a copy. Ask for written acknowledgement.
4. Arrange replacement supply. Agree a new contract with a start date after your end date, so you avoid out-of-contract rates. Our how to stop your contract rolling over guide has a quick checklist.
5. Check the final bill. Make sure no renewal charges appear.

What if you've already been rolled over?

• Ask the supplier for proof that it sent the required renewal information and when. If it did not meet the rules, the rollover may not be valid for a microbusiness. Put this in writing.
• Check the new term length. For a microbusiness, a rollover longer than 12 months should not be possible.
• If the supplier will not agree, follow the complaints and Ombudsman route. You must complain to the supplier first.
• If you moved premises or closed the business, see closing a business energy account.

Worked example

A florist's fixed contract ends on 31 March. The supplier's renewal letter offers 12 more months at 31p/kWh. The florist uses 15,000 kWh a year. A new supplier offers 27p/kWh for 12 months starting 1 April.

• Rollover cost: 15,000 x £0.31 = £4,650
• New supplier cost: 15,000 x £0.27 = £4,050
• Saving: £600 on unit charges (before standing charges, VAT and CCL), if the florist acts in time.

Rates are illustrative. Use the business energy cost calculator for your own numbers.

Evergreen contracts: the notice exception

An evergreen contract has no fixed end date. Ofgem allowed an exception to the no-notice rule for these because they let suppliers offer non-fixed-term deals at lower cost than deemed or out-of-contract rates. If you are on one, check what notice it demands (up to 30 days for a microbusiness) and whether any exit fee applies. See the glossary entries for evergreen contract and rollover contract.

Practical tips

• Open every letter from your supplier marked "renewal" or "your contract". Do not treat it as marketing.
• Keep a log of contract end dates for every meter, especially if you run several sites. See switching multiple sites.
• If a broker manages your account, ask them to confirm in writing when they will alert you.
• Set diary reminders at six months, three months and one month before the end.

What the supplier must tell you

Ofgem's decision requires suppliers to give microbusinesses a Statement of Renewal Terms and the Principal Terms before they can renew you. Check three things when you get them: the date the new term would start, the rates and the length. If any is missing, treat it as a reason to ask questions in writing. A supplier that cannot show it sent compliant information may find it harder to enforce a rollover against a microbusiness.

Common questions

Can a rollover be longer than a year?

For a microbusiness the rule is no more than 12 months. If your contract says otherwise, query it. Bigger businesses are not covered by the same rules, so read the terms.

Is an evergreen contract better than a rollover?

It is more flexible because you can leave on notice, but you are usually on rates the supplier can change. Compare the rate against the alternatives each year.

Does moving premises end a rollover?

Not automatically. Check whether the contract can transfer, and tell the supplier early. See taking a contract to new premises.

Keep proof of everything

If you tell the supplier you do not want to renew, send it by email or recorded post, keep the sent copy and note the date. If a dispute later arises about whether notice was given, that record is what the Energy Ombudsman will ask to see. Note also the name of anyone you speak to by phone and what they said.

Next steps

• Check the end date and read your terms.
• Get replacement quotes early: renewal guide.
• Learn how long a rollover can last.

This is general information, not legal advice.