Time for a change: A Hotelier’s guide to switching energy suppliers

Running a small hotel or B&B requires juggling a multitude of tasks. You’re welcoming guests, maintaining high room standards, organising the breakfast buffet so it goes smoothly, all while trying to stay on top of rising costs. Energy? That’s one of the big ones.

Switching energy suppliers might not be at the top of your to-do list right now. Still, it’s one of the most effective ways to cut overheads, meet your guests’ expectations for sustainability, and make smarter use of what you generate or use. 

With summer months approaching, higher vacancies being filled usually result in higher energy usage; there’s no better time to switch. Here’s how to get started.

Why should small hotels consider switching energy suppliers?

1. Costs are rising, and fast  

It’s estimated that, on average, hotels in the UK consume between 10,000 and 15,000 kWh of electricity per room per year. 

Wholesale prices, industry non-power costs (the standing charges added on top of energy use to cover things like grid maintenance), and inflation all add up. When your fixed-term contract ends, or if you’re out of contract entirely, you could be paying more than you need to.

2. There’s value in renewable energy

Modern travellers care about more than thread counts. They’re looking for businesses that walk the talk on sustainability. But here’s the catch: that demand is real, and they can tell when it’s just lip service.

The term ‘greenwashing’ was first coined back in the 1980s, ironically, in hotels, when signs started popping up asking guests to reuse towels to "save the planet." Meanwhile, nothing else in the building had changed. It was a cheap PR trick, and guests caught on.

Today’s guests are asking tougher questions. Who’s supplying your energy? What kind of generation mix are you buying into? Switching to a supplier that can offer real access to low-carbon electrons from traceable sources isn’t just good marketing, it’s good business.

3. You might be sitting on missed opportunities

If your hotel generates energy (say, from solar panels), you might be entitled to trade your excess through schemes like the Smart Export Guarantee (SEG). But not all suppliers offer favourable terms, or even make that process easy. Switching can open the door to better export rates and clearer reporting.

When is the best time to switch?

Ideally, before your contract ends. That gives you time to weigh your options and avoid rolling into a pricey out-of-contract rate.

A good rule of thumb? 

Review your contract terms at least six months before renewal. Some energy contracts for businesses come with notice periods, so check yours early to avoid penalties or delays.

What are the common mistakes when switching energy suppliers?

1. Waiting too long

Leave it too late and you risk either auto-renewing into a worse deal or scrambling to make a fast decision.

2. Focusing only on the headline rate

Unit rate is just one piece of the puzzle. Look out for hidden charges, like standing charges or hefty exit fees.

3. Ignoring contract types

Not every energy tariff suits a small hotel. We’ll break that down in the next section.

4. Falling for “green” labels

If a supplier says their energy is "100% renewable", ask how. 

Is it backed by Renewable Energy Guarantees of Origin (REGOs)? Is it matched to real-time generation?

Which energy contract types are best for small hotels?

Every hotel runs differently. Some have busy seasonal peaks, whilst others have a steady flow of business travellers. 

So, what should your hotel be looking at when considering a new, different energy contract?

We’ve put together potential options below: 

Fixed-rate contracts

Fixed-rate contracts offer stability. You lock in your unit price, making budgeting easier and shielding your business from market spikes. This suits hotels with predictable costs or set pricing structures. 

The downside? If market rates fall, you're stuck paying more, so there’s less flexibility.

Variable-rate contracts

Variable-rate contracts follow market prices. If costs drop, so can your bills. But prices can rise too, making it harder to plan. For hotels with seasonal dips or flexibility in when energy is used, like running laundry off-peak, this option can sometimes work in your favour.

Pass-through contracts

These split out costs like transmission and distribution charges, which can be beneficial if you understand your usage pattern and can shift the load. But pass-through contracts can be complex, so they’re usually better suited to larger or multi-site operations with good support.

In simple speak: if you want predictability, go fixed. If you’ve got flexibility and a good handle on usage, variable-rate contracts might be worth exploring.

A step-by-step guide to switching suppliers as a small hotel business  

Step 1: Review your current deal

Dig out your latest bill. Check your end date, exit fees, and current rates.

Step 2: Know your usage

Look at your past 12 months of energy usage. How much do you use in peak season and off-peak? 

Step 3: Compare carefully

Not all quotes are like-for-like. Get a breakdown of charges, not just unit rates.

Step 4: Consider your sustainability goals

Do you want access to traceable low-carbon electrons? What about support for your on-site generation? 

Step 5: Lock in the switch

Once you’ve picked a new supplier, they’ll handle the switch. There’s no need for physical changes; it’s just an update to billing and supply registration. 

Step 6: Don’t stop there

Switching is step one. Monitoring and optimising your energy use is where long-term savings and benefits show up.

How can tem energy help hotels with switching their energy supplier?

tem isn’t your typical supplier. We don’t sell you what’s on the shelf; we go straight to the source. 

Our solution, RED, connects businesses directly with generators of clean, low-carbon power. You get access to competitively priced renewable energy, greater transparency, and a clearer story to tell your guests.

We also help hotel businesses:

• Understand and reduce industry non-power costs

• Maximise value from onsite generation (e.g., through export support)

• Plan long-term by cutting through the complexities involved in the energy market

And because we’re built differently, no call centre queues, no upselling, we keep things simple. 

Transparent contracts. No fluff. Just fair, direct access to cost-effective, renewable energy.

Talk to tem today…

The energy market can feel like one of those haunted hotel stories where the corridors go on forever. It’s easy to get lost. But switching suppliers doesn’t have to be overwhelming, and for hoteliers, it can unlock real savings, stronger guest relationships, and a better story to tell.

Ready to explore what a better energy deal could look like for your hotel? Let’s talk.