Yes, you can compare business energy offers before your current contract ends. The harder question is whether the supply should transfer early. That depends on the contract wording, the exit cost and whether the saving from a new deal is large enough to cover it.
Most of the time, the smart move is to quote early and set the new contract to start at expiry. Leaving immediately only makes sense when the written cost of leaving is lower than the amount you expect to save over the same period.
I’m Joe from Smarta Switch in Brisbane. If you send me the bill and the contract, I’ll put three numbers side by side: the cost of staying, the cost of leaving now, and the cost of starting a new deal at expiry.
We’re paid by the energy retailer when you switch, never by you.
The short answer depends on the contract type
Business owners often say they are “locked in” without knowing what the lock actually is. There are a few different positions hiding behind that phrase.
Standing or default contract
A standing contract is the fallback arrangement that applies when a customer has not chosen a market offer, or when an expired offer rolls onto standing terms. It is usually not where you want to stay. The Australian Energy Regulator says standing offers can cost more than market offers and are designed as a safety net, not a best-price deal.
The important point is that standing terms are different from a fixed-term market deal. Ask the retailer what notice is required, but do not assume a long fixed commitment just because the same retailer has billed you for years.
Small-business market contract
This is a plan you chose or negotiated with a retailer. It may have a fixed contract length, a benefit period, a rate guarantee, an exit fee, or some combination of those things.
The AER lists an early termination fee as one of the extra fees an energy contract can include. That does not mean every contract has one. It means the answer lives in your particular terms and energy plan.
Negotiated C&I contract
Larger commercial and industrial contracts are more bespoke. The exit clause may go beyond a simple fixed fee. It can refer to the remaining contracted volume, wholesale market movement, losses the retailer says it will incur, or a formula in the agreement.
If your site or portfolio is in C&I territory, do not sign a replacement contract until someone has read the current termination and volume clauses properly. A good headline rate can be wiped out by one poorly understood exit calculation.
If you are not sure which category you sit in, start with our guide to business electricity contract types and the large versus small market threshold guide.
Find these four facts before you compare anything
You do not need a law degree. You need four written answers.
- What is the contract end date? Look for “contract end date”, “plan end date”, “benefit end date” or “expiry” on the bill and agreement.
- What notice must you give? Some contracts require notice even when you plan to leave at the end of the term.
- What happens after expiry? The account might move to a standing offer, continue on revised rates, or roll under another clause.
- What does it cost to leave on a specific date? Ask the retailer for a written termination figure, including GST, for the date you are considering.
Do not settle for “there may be a fee” over the phone. Ask for the number and the clause that creates it. If the retailer cannot give a final figure until a termination request is lodged, ask for the calculation method and a worked estimate.
For small customers in the National Energy Customer Framework states, retailers have rules around contract information and end-of-term notices. Large customers rely much more heavily on what the negotiated agreement says. That is one reason the annual usage threshold matters.
The maths for deciding whether to leave early
The decision is not “old rate versus new rate”. It is total remaining cost versus total replacement cost.
Use this simple test:
Expected saving before the old contract expires, minus the exit cost, minus any new fees, equals the net benefit of leaving early.
Here is a worked example.
- Four months remain on the current contract.
- The business expects to use 80,000 kWh during those four months.
- The new offer is 2.5 cents per kWh lower on the contestable energy rate.
- That creates a headline usage saving of $2,000.
- The old retailer confirms a $1,200 exit cost.
- The new offer adds $180 in metering or account fees over the same period.
The net benefit is about $620 before checking demand rates, supply charges and GST treatment. That may still be worthwhile, but it is nowhere near the $2,000 suggested by comparing one line on the quote.
Now change the exit cost to $3,000. Leaving early loses money even though the new usage rate is lower. The better move is to secure the replacement deal for the expiry date and avoid the exit cost completely.
This is why we use the full nine-point business electricity quote checklist, not just cents per kWh.
When leaving early can make sense
There are situations where an early switch is commercially sensible.
You are already out of contract
If the fixed term has ended and the account is sitting on standing or rollover rates, there may be no remaining fixed term to break. Confirm the notice requirement, then compare the market quickly. Every extra billing cycle on a high default rate can be expensive.
The exit fee is small and the price gap is large
A fixed fee can be recovered quickly when the current rate is far above market and the site uses a lot of energy. The calculation should still use the whole bill, including demand, supply, environmental and metering lines.
The retailer agrees to waive or reduce the fee
This sometimes happens when a business is moving, restructuring, closing a site, or signing another account with the same retailer. It is a negotiation, not an entitlement. Get any waiver in writing before relying on it.
The contract has a specific termination right
The agreement may allow termination after a material breach, a defined change, insolvency, sale, closure or another named event. This is contract-specific and can become a legal question. If the amount is material or the clause is disputed, get legal advice rather than treating a broker’s commercial read as legal advice.
When waiting for expiry is usually better
Waiting is normally cleaner when:
- the current deal is still reasonably sharp
- the exit cost is higher than the remaining saving
- the contract has only a few months left
- the business expects its usage or site portfolio to change
- the new offer cannot hold its price until the existing term ends
- a C&I termination formula is uncertain or exposed to wholesale movement
Waiting does not mean doing nothing. Start the renewal process 60–90 days out, gather the bills and interval data, compare the panel, and set the replacement contract to start when the old one finishes.
That approach avoids the last-minute rollover trap while preserving the value of the contract you already signed. Use the 90-day energy contract renewal checklist to work backwards from the expiry date.
Moving premises is not a free cancellation button
Energy supply is linked to the site and its National Metering Identifier. Moving means closing the old account and arranging supply at the new site, but the old contract’s notice and exit terms can still apply.
Some retailers may offer to move the commercial arrangement to the new address or waive a fee if the business stays with them. That depends on whether the retailer serves the new location, whether the new load fits the offer and what the contract allows.
An interstate move adds another layer because the distribution network, thresholds and available retailers can change. Read the full guide on moving business premises with an energy contract before the lease or move date is locked.
Selling the business needs its own contract plan
A share sale and an asset sale are not the same.
In a share sale, the legal entity on the account may remain unchanged. In an asset sale, the buyer usually needs a new account, a novation, or another written arrangement accepted by the retailer. The contract does not disappear just because keys and stock change hands.
Bring the energy account into the sale conversation early. If it is left until settlement week, the seller can face an exit claim and the buyer can land on a poor temporary rate. Our guide to energy contracts when selling or buying a business explains the difference.
Cooling-off is not the same as breaking the old contract
Eligible small customers generally have a 10-business-day cooling-off period after entering a new market contract. That gives you time to cancel the new agreement in the circumstances covered by the rules.
It does not automatically cancel the existing retailer contract or erase an old exit fee. Treat the two contracts as separate checks:
- Can I cancel the new agreement during its cooling-off period?
- What do I owe under the old agreement if I leave before expiry?
Confusing those questions is how businesses end up signing twice and assuming the new retailer will sort out the old commercial liability.
What to do this week
- Find the latest bill and the current contract or energy plan summary.
- Ask the retailer to confirm the end date, notice period, rollover position and exit cost in writing.
- Add up 12 months of usage so the next quote is based on your real load.
- Compare leaving now with starting a replacement contract at expiry.
- Do not sign until both timelines have a clear total cost.
If you want me to run the numbers, send the bill and contract. I’ll tell you plainly whether leaving now stacks up, whether to book the next deal for expiry, or whether the current rate is already good enough.
Official sources
- Australian Energy Regulator: understanding your energy bill and contract fees
- Australian Energy Regulator: energy services, cooling-off and moving
- Energy Made Easy: small energy customer rights and comparison options
Joe Lawrence, Co-founder, Smarta Switch Australia