10 common mistakes to avoid when renewing your energy contract
When it comes to renewing your energy contract, timing and attention to detail are everything. You’ve been running your business, keeping operations ticking along smoothly, but now it’s time to face the energy contract renewal. Done right, you’ll secure a deal that works for your needs and could even help save money as well as predict costs. Done wrong, you could end up on a costly default tariff or tied into an agreement that’s not the right fit.
We’ve seen it time and again – businesses falling into common pitfalls that turn what should be a straightforward process into a stressful scramble. Let’s take a closer look at these traps and, more importantly, how you can avoid them.
1. Delaying the renewal process
It’s easy to push energy contracts to the back of your mind, especially when you’ve got more pressing tasks at hand. But the truth is, waiting too long to start the renewal process can lead to problems like rushed decisions or being placed on expensive default rates.
How to avoid it: Give yourself plenty of time. Start the renewal process several months before your current contract ends. This gives you time to review your options, negotiate, and ensure you’re getting the best terms. At Troo, we can look into this for you 12 – 24 months in advance. If you are a customer, we will contact you to let you know when you can start the process, or alternatively if you want to check then you can reach out to us.
2. Overlooking your usage patterns
Energy contracts are not one-size-fits-all. Every business has different energy needs, and failing to take your usage patterns into account could lead to paying for energy you don’t use – or worse, facing penalties for underestimating consumption.
How to avoid it: Review your energy usage over the last year. Look at when your business uses the most energy, whether you have seasonal spikes or if you could benefit from off-peak rates. By understanding your patterns, you’ll be better placed to choose a contract that aligns with your business needs. Or if you need help with this, Troo will be able to assist.
3. Not comparing multiple offers
Loyalty is important in many areas of life, but when it comes to energy contracts, sticking with your current provider without shopping around could cost you.
How to avoid it: Ensure you get quotes from multiple suppliers. Compare not only the prices but also the terms and the level of service each provider offers. With Troo’s broad access to suppliers, we can do this work for you, making sure you’re getting the most competitive deal with minimal hassle.
4. Ignoring market trends
Energy prices are always moving. Whether driven by supply and demand or regulatory changes, these fluctuations can make a big difference to the cost of your contract.
How to avoid it: Keep an eye on the market. Pay attention to seasonal trends, regulatory updates, and other factors that can impact energy costs. If you’re unsure where to start, Troo’s expertise and constant market monitoring can help you navigate these trends and find the best timing for your renewal. Our quarterly newsletter will also include a market report to keep you updated.
5. Misunderstanding contract terms
Energy contracts are full of small print that can be easy to overlook. But buried within those pages are crucial details about pricing mechanisms, fees, and other conditions that could affect your business.
How to avoid it: Don’t be afraid to ask questions. If you’re unsure about something, speak with your provider or consult an expert. Clarify anything that doesn’t make sense, and make sure you understand exactly what you’re signing up for before committing.
6. Neglecting to negotiate
The first offer on the table might not be the best one. Yet, many businesses accept it without considering whether there’s room for negotiation.
How to avoid it: View the renewal as an opportunity to improve your deal. Can you secure a lower rate? Is there a chance to add extra services or gain more flexible contract terms? With Troo’s knowledge of the market, we can help you negotiate with confidence, ensuring you get the best terms available.
7. Failing to consider long-term business changes
Your business may not look the same in a year as it does today. Expanding your operations, cutting back, or moving to more energy efficient processes are just some of the factors that could impact your future energy needs.
How to avoid it: Think long term. Are there changes coming that will affect how much energy you use? Choose a contract with the flexibility to adapt to your business as it grows or shifts. This way, you’ll avoid being locked into a deal that no longer makes sense.
8. Overlooking service quality
While price is an important factor, it’s not the only thing to consider. Poor customer service or unreliable support can lead to frustration and operational issues throughout your contract. If problems arise and you’re stuck dealing with a supplier that doesn’t respond well, it could cost you more than just time.
How to avoid it: Take the time to evaluate the supplier’s reputation for customer service and ongoing support. This could involve checking reviews, asking for recommendations, or using a broker that can do this research on your behalf. For example, Troo’s Troo Assure team, rated 5 stars on Trustpilot, is available to handle queries and support throughout the contract, offering peace of mind by managing these concerns so you don’t have to.
9. Not factoring in renewable energy options
As sustainability becomes more of a priority for businesses, there’s an increasing opportunity to incorporate renewable energy into your contract. It’s not just about being green – it could also reduce costs in the long run.
How to avoid it: Check whether renewable options are available in your contract. More businesses are choosing renewables to align with sustainability goals, and doing so could benefit both your bottom line and the environment.
10. Overlooking exit or change clauses
Circumstances change and being locked into a contract that doesn’t suit your evolving needs can be frustrating and costly. Hidden exit fees or restrictive change clauses can leave you stuck.
How to avoid it: Before signing, carefully review the contract’s exit conditions and amendment clauses. Make sure you’re comfortable with any fees or conditions and choose a contract that gives you the flexibility to make changes if your business needs shift.
Energy contract renewals don’t need to be stressful. By keeping these common pitfalls in mind, you can take control of the process, make informed decisions, and secure a deal that works for your business. Taking the time to review your options, negotiate where necessary, and factor in both your current and future needs will help ensure a smooth transition when it’s time to renew. And if you need any guidance, feel free to reach out to Troo at hello@troocost.com – we’re here to help.