# What is a business energy contract?

> Quick answer · Last updated 5 July 2026

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## In short

A business energy contract supplies gas and electricity to non-domestic premises — shops, offices, warehouses and home offices with business use — under commercial terms distinct from household price caps. Contracts specify unit rates, standing charges, contract length, renewal windows and whether prices are fixed or variable.

Business contracts are not covered by Ofgem's domestic price cap — suppliers negotiate rates based on consumption, creditworthiness and market wholesale prices.

Micro-businesses — under 10 employees and low turnover thresholds — receive enhanced protections under Ofgem rules: clearer contract information, cooling-off periods on some switches and ban on rollover to punitive out-of-contract rates without notice.

Deemed and out-of-contract rates apply when contracts expire without renewal — often far above negotiated fixed rates. Set diary alerts 60 days before end date.

Half-hourly metering and pass-through charges affect larger users differently from small shops on standard business meters. See business energy explained guide.

## Related

- [Business energy explained](https://moneyguide.org.uk/bills-utilities/business-energy-explained/)
- [Business energy VAT rate](https://moneyguide.org.uk/answers/business-energy-vat-rate-uk/)

## Primary source

ofgem.gov.uk/information-consumers/energy-advice-businesses

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.