Business energy renewal too early? It might cost more than you think
In the UK’s business-energy market, locking in a new contract months before your existing one expires may appear savvy — but experts warn it can be a costly mistake. At the same time, the role of energy brokers in steering early renewals is under growing scrutiny, with concerns that their own interests may not always align with those of the businesses they serve.
The problem with early renewals
When a business rushes into a renewal deal for its electricity or gas supply, several risks emerge:
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Missing better market rates: Energy markets fluctuate. Committing too early means you may lock in a price that looks good now but becomes unfavourable if wholesale costs fall. While many energy suppliers encourage businesses to renew … these seemingly helpful prompts often serve supplier interests rather than customer benefits.
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Reduced negotiating leverage: Closer to the contract end date, suppliers may offer more competitive deals because they know you’re shopping. An early decision robs you of that leverage.
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Hidden costs and clauses: Renewals often come with less obvious charges — standing charges, capacity fees, or termination penalties — which businesses may not review thoroughly.
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Auto-rollover risk: If you trigger a renewal too early (or miss a notice window), you may slip into a rollover contract at much higher rates. One guide explains that rollover deals may cost up to 80% more than standard fixed-term deals.
The message: timing matters. Starting the review process 6–12 months ahead is wise — but signing up too far ahead may be counter-productive.
Brokers: helpful advisors or conflicted salespeople?
Brokers can add value, particularly for complex multi-site businesses. But there are growing concerns about how some act when it comes to renewals.
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Commission conflicts: Some brokers receive higher commissions from certain suppliers or contract types — creating a potential incentive to push deals that favour the broker’s income more than the client’s value.
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Early renewal pressure: Some brokers (and suppliers) push for sign-up well ahead of expiry. The reason? They secure their commission earlier, and may avoid the competing offers that appear closer to a contract’s end. Advisers warn of pressure sales tactics and false urgency from brokers.
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Lack of transparency: Hidden fees, opaque commissions and unclear contract terms remain a problem. One claim estimates that undisclosed broker fees may add around 10 % to business energy bills.
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Auto-renewal clauses: Some brokers include or exploit “do it for you” clauses that allow them to renew contracts automatically without explicit client approval — locking businesses in before they’ve had a chance to shop around.
Why the incentives line up this way
For brokers and suppliers:
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Securing a renewal deal early gives them greater certainty of commission and less risk of competition undercutting the offer.
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Long contracts lock in revenue streams (for both supplier and broker) and reduce the churn and cost of renegotiation.
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Busy business clients may welcome “one-and-done” renewal processes — less admin — but might sacrifice flexibility and savings.
For businesses:
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The appeal of “done for you” renewal is obvious: less hassle, fewer decisions.
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But the cost is typically less control and less transparency of the deal’s true value.
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If market rates fall or usage changes, a poorly timed renewal can lock you in at high cost when you could have done better.
What businesses should watch out for
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Check your contract end date and notice window — and set reminders. Many rollover traps come from missing termination dates.
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Don’t rush into renewal just because you’re approached early. Allow time to compare, benchmark and negotiate.
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Ask your broker (or supply consultant) for full transparency — What commission do you receive? Are there extra fees built into the rate? Which suppliers are on your panel?
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Read renewal and rollover clauses carefully — Avoid hidden clauses that let your contract be renewed without your express opt-in.
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Compare the market first — Even if you have a trusted broker, get independent quotes. Circumstances change, and what made sense six months ago may not now.
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Consider the length of contract — Locking in for a longer term when market prices may be falling could be a risk.
The takeaway
Renewing your business energy contract earlier than necessary isn’t always a sign of foresight — it can be a sign of missed opportunity. When brokers push early renewals, the risk is that they’re acting in their own interest rather than yours. Businesses should treat early renewal approaches with caution, demand full transparency, and make sure they retain control of the timing and terms of the deal.
The energy market today is too volatile and too competitive to lock-in without due care. If you’re in a business with a contract coming up, it may be wise to step back, pause, compare, and avoid being rushed into a renewal that ends up costing far more in the long run.
