How Does Being A Microbusiness Affect Your Energy Contract?

Did you know, microbusinesses make up 95% of all UK businesses? It’s more than just their size that sets them apart from other types of business – when it comes to finding an energy contract, the rules for microbusinesses are a little different too. 

In this guide, we take you through everything you need to know about your microbusiness energy contract, so you can find the best fit for your business. 

The criteria for a microbusiness can vary, but when it comes to energy, microbusinesses are defined as: 

• Having fewer than 10 employees 
•  Having an annual turnover or balance sheet of €2 million or less 
• Using no more than 100,000 kWh of electricity per year or no more than 293,000 kWh of gas per year 

All businesses, including microbusinesses, are required to set up a business energy contract. Most suppliers will offer different types of contracts and tariffs for their customers to choose from such as fixed, prepay and freedom, as well as renewable energy plans for businesses looking to go green.  

You can find out more about the types of microbusiness electricity and microbusiness gas tariffs here.  

When you sign a new microbusiness energy contract, you will be provided with the key points of your new contract, including your contract period/end date and terms and conditions. 

When your contract is due for renewal, you will be sent a renewal reminder. This is usually around 60 days before the current contract end date and will contain your current energy prices, energy consumption, and new renewal rates.  

Although microbusiness energy contracts are different from domestic contracts, there are also a few key differences from other business contracts too. Due to their smaller size and lower turnover, there are more rules and regulations surrounding microbusiness energy contracts, providing greater protection for business owners.  

In 2021, Ofgem’s Microbusiness Strategic Review stated that energy suppliers can no longer insist that microbusinesses give a 30-day notice to end their contracts, unless they are on an ‘evergreen’ or ‘rollover’ tariff. 

Some microbusiness owners who run their businesses from home may choose to get a business energy plan, rather than a domestic energy plan, due to the elevated energy consumption that comes with running a business. 

In order to qualify for a microbusiness energy tariff whilst working from home, you must be a registered business and be able to prove 50% or more of your energy use is for business purposes. 

The Alternative Dispute Resolution Scheme (ADR) affects microbusinesses that get their energy via a third-party broker, rather than directly through an energy supplier. The scheme was introduced in December 2022 and required all brokers and third-party intermediaries to register, with the aim of providing greater protection for microbusiness energy customers. 

The key points of the ADR scheme mean that microbusinesses no longer had to submit termination notices and there is greater visibility and disclosure of broker/TPI costs. 

To find out more about how the ADR scheme affects your microbusiness energy, read our full guide. 

When it comes to running a microbusiness, energy costs can be a lot to manage and reducing your consumption can help bring down your bills, as well as your carbon footprint.  

Although it may be a difficult to know where to begin, there are lots of simple ways you can start making changes to the way your business uses energy: 

• Complete a business energy audit – this is a great way to start your energy saving journey, giving yourself a holistic view of your energy usage and gaining a better understanding of where you can start making changes.  
• Get your team involved – for microbusinesses, this will be a small team, so it is important that everyone is working together to make positive changes. 
• Get a smart meter – smart meters are a great way to monitor your energy usage and encourage you to be more mindful of what you’re using, whilst also saving you the hassle of having to take manual meter readings.  
• Make simple swaps for efficient alternatives – you may be surprised by how much your appliances and equipment are impacting your microbusiness energy bills. By switching florescent light bulbs for LED alternatives and investing in better building insulation and ventilation, you can make significant reductions in the amount of energy you use.  
• Check out our free guides – we have a range of useful guides to help you manage your energy consumption and make changes that benefit your business and the planet, from calculating your carbon footprint, to understanding renewable energy. 

At Yü Energy, we work with businesses of all sizes and industries to help them manage their energy bills and provide a seamless service, alongside tailored support from our dedicated team of experts.  

Use our fast business energy quote tool to find out how much you could save and choose from a range of bespoke plans designed to suit your business.