Energy contracts explained
There are different types of contracts for the supply of electricity and gas. These are also called energy tariffs. If you want to change to another gas or electricity supplier you will need to agree a new tariff with them.
This page explains the different kinds of energy supply tariffs that are available.
Most energy suppliers use rolling contracts, where the energy supplier will continue to supply you with gas or electricity until you decide to cancel.
Suppliers have different tariffs for metering types that vary the unit cost depending on the time of day e.g. Economy 7 or Economy 10 meters. These tariffs are known as ‘Time of Use’ (TOU) tariffs.
Your energy supplier can increase the rate charged per unit of electricity or gas, provided it meets certain conditions when it informs you. If your supplier does inform you of a price increase, you can look at switching suppliers to get a better deal elsewhere.
Suppliers can offer discounts if you:
- get both gas and electricity from the same supplier
- manage your account online
- choose a particular payment method
These discounts will be explained as a yearly amount in pounds and pence.
Fixed term tariffs
Some of the tariffs suppliers offer will last for a fixed time, such as one or two years and prices will be fixed, capped or discounted during that time. You may want to take on a fixed term contract if you want to protect yourself against the possibility of energy prices rising in the future.
Bear in mind that it’s the rate charged per unit of energy that’s fixed. If you use more energy than anticipated, your bill will go up. So for example, if you pay a fixed amount by direct debit each month, this amount could be increased if you use more energy.
If you’re on a fixed term tariff, you will be notified before your contract ends so you can decide if you want to stay with your supplier or switch. You’ll get details of the tariff you’ll move onto if you stay with the same supplier and don’t agree to a different one.
You’ll be able to switch without having to pay any termination fees and you can’t be moved onto another fixed term tariff without your consent.
If you don’t get notice about the end of your fixed term tariff, are charged a termination fee to switch or get moved onto another fixed term tariff without agreeing to this, you should first complain to your energy supplier. If you're still not happy with the outcome, contact the Consumer Council, who can investigate your complaint on your behalf.
Green energy tariffs may not be the cheapest but if you’re concerned about the environment, a green tariff can be a good way to reduce the impact of your energy use. With green tariffs the supplier must buy or generate as much electricity from renewable sources as you use.
Before you agree to an energy supply tariff, read the terms and conditions carefully or ask the supplier to explain it to you. If there's anything you don't understand or don't agree with, discuss it with the supplier before you decide to change.
Generating your own energy
If you generate your own energy, for example through solar panels or a ground source heat pump, you may have a different contract with your energy supplier. This is because in addition to creating all the energy you need yourself, you may have an agreement to sell any extra to a supplier.
You can find more information about generating your own energy from Energy Wise.