What happens if your business energy supplier goes bust?

Energy suppliers do fail. Several collapsed during the 2021 to 2022 wholesale price crisis, and smaller suppliers have continued to exit the market since, including two in 2025 alone. If yours is one of them, the immediate practical point is the one Ofgem repeats every time: your gas and electricity keep flowing. What changes is who is billing you, and possibly what you are paying.

What is the Supplier of Last Resort process?

The Supplier of Last Resort (SoLR) process is how Ofgem keeps customers supplied when their energy company fails. Ofgem runs a competitive process to appoint another supplier to take over the failed company’s customers, choosing one that can absorb the extra accounts without putting its existing customers’ service at risk. You do not apply or opt in. It happens to your account automatically.

Two recent examples show how this works for business customers specifically:

• Rebel Energy, which failed in April 2025. Ofgem appointed British Gas to take over its 84,000 domestic customers and 6,000 non-domestic (business) customers from 6 April 2025.
• Tomato Energy, which ceased trading in November 2025. Ofgem again appointed British Gas, this time to take over 15,000 domestic customers and 8,000 non-domestic customers from 9 November 2025.

In both cases Ofgem said energy supplies would continue as normal and that the new supplier would contact customers to complete account setup in the days that followed.

Will your supply be cut off?

No. This is the point Ofgem is most consistent about: supply continuity is the priority, and physically disconnecting customers is not part of the process. If you use a prepayment meter, you can carry on topping up as normal while the transfer happens.

What happens to your money?

This is where business customers get a materially worse deal than households, and it is worth understanding before it happens to you.

For domestic customers, Ofgem’s press releases on both Rebel Energy and Tomato Energy stated plainly that funds paid in by current and former customers would be protected where they were in credit. Ofgem’s wider guidance confirms domestic credit balances are protected under its safety net rules.

For non-domestic (business) customers, neither press release made the same commitment. Ofgem’s own guidance is direct about this gap: in its best practice guide on security deposits, Ofgem notes that microbusinesses whose supplier fails can lose their credit balance and security deposit through no fault of their own. When a Supplier of Last Resort takes over, Ofgem will try to have the new supplier honour outstanding business credit, but this is not guaranteed in the way it is for households. Where the failure goes through a Special Administration Regime instead, any money you are owed becomes a claim against the failed company, handled by the appointed administrator alongside its other creditors, rather than something automatically returned.

Practically, this means:

• Check your balance before your supplier shows signs of trouble, where possible, rather than running a large credit balance with a supplier you are unsure about.
• Watch for contact from the administrator or the new supplier after a failure, since claiming any balance owed may need you to respond to their process rather than wait for an automatic refund.
• Keep records of payments and statements, which you may need if you have to pursue a balance through an insolvency process.

If you were asked to pay a security deposit, see our guide on business energy credit checks and deposits for how deposits are meant to be managed, and the same gap in protection if the supplier holding it fails.

What contract will you be on afterwards?

Ofgem’s guidance describes new customers being placed onto a competitive tariff with the appointed supplier once the transfer completes. In practice this is usually a form of deemed contract: you are being supplied without having signed a new agreement, on terms the new supplier sets. Deemed and out-of-contract rates are generally higher than a rate you would negotiate directly, because the supplier is taking you on without the usual sales process or credit assessment. Our guide to out-of-contract rates explains how these rates compare with a fixed deal.

You are not locked into this. Ofgem’s press releases on both recent cases confirmed that affected customers could move to another supplier once their account was set up, without an exit penalty for leaving the deemed arrangement early. There is no reason to stay on a deemed rate for longer than it takes you to compare and agree a proper contract.

What happens, step by step?

1. Your supplier stops trading. Sometimes this is announced in advance; often it is not. You may hear it from the supplier itself, from Ofgem, or simply notice your usual contact is no longer answering.
2. Ofgem runs a competitive process to choose a new supplier able to take on the customer numbers involved, or, for a very large failure, applies to place the supplier into special administration instead.
3. Ofgem announces the appointment, as it did for Rebel Energy and Tomato Energy, confirming that supply continues and giving a date the new supplier takes over.
4. The new supplier contacts you, usually within days, to set up your account and explain the tariff you have been placed on.
5. You decide whether to stay or switch, with no exit fee stopping you moving elsewhere once your account is active.

Who pays for a supplier failure?

The cost of moving customers to a new supplier does not simply disappear. Ofgem’s rules let an appointed Supplier of Last Resort claim back some of the costs it takes on through an industry-wide process, covering categories that include the wholesale cost of supplying the new customers, working capital, other operational costs, and, notably, credit balances it pays out to departing customers. This recovery mechanism is, in effect, funded across the market rather than by the failed supplier itself, which by definition no longer has the money. It is part of the reason Ofgem has since introduced financial resilience rules for suppliers, including a Minimum Capital Requirement and an Enhanced Financial Responsibility Principle from 2023, intended to make suppliers better able to withstand market shocks and reduce how often this process is needed.

Should you switch away straight away?

Generally yes, once your account with the new supplier is confirmed and working. A few points to check first:

1. Confirm your account is active with the new supplier before you switch again, so there is no gap or confusion during the handover.
2. Take a meter reading as close as possible to the point of transfer, so your final bill from the failed supplier and your opening position with the new one line up.
3. Compare your options properly rather than accepting the first offer, since you are starting from a deemed rate with no exit fee holding you back. Our quote comparison calculator can help you weigh unit rates, standing charges and contract length.
4. Check whether any old credit balance has been resolved before you finalise anything with your next supplier, so nothing is left outstanding with the administrator.

Our guide on how to switch business energy supplier covers the switching process itself in detail.

What if Ofgem cannot find a Supplier of Last Resort?

Not every failure can be handled through SoLR. Ofgem’s decision on its approach to supplier insolvency explains that where a SoLR appointment is not feasible, for example because no supplier can absorb the customer numbers involved, Ofgem can instead use its powers to have an energy supply company administrator appointed under the Special Administration Regime (SAR). The administrator runs the failed supplier on a temporary basis, keeping customers supplied, while a longer-term outcome is found, such as a sale of the business or an eventual move of customers to another supplier. Ofgem’s stated priority in either route is the same: continuity of supply first, with the practical financial questions, including any money owed to business customers, worked through afterwards.

What if the failed supplier is too big for a standard handover?

The SoLR process assumes another supplier can absorb the failed one’s customers without straining its own systems. When a supplier is very large, that is not always possible.

Bulb Energy is the example that shows what happens instead. It entered a Special Administration Regime in November 2021 rather than being handed to a single Supplier of Last Resort, because of its size. Ofgem’s guidance to affected customers at the time confirmed that credit balances were protected and that customers stayed on their existing tariff and terms while the administration ran, rather than being moved onto a deemed rate straight away. The administration continued for around a year while a longer-term buyer was found. Government confirmed in late 2022 that Octopus Energy had agreed to acquire Bulb’s 1.5 million customers, with the transfer completed through a court-approved Energy Transfer Scheme; customers did not need to do anything, and their direct debits and credit balances carried over automatically.

The table below summarises the two routes.

	Supplier of Last Resort (SoLR)	Special Administration Regime (SAR)
When used	Standard route, used for most supplier failures	Used where a supplier is too large or complex for another supplier to absorb straight away
Who runs the failed supplier	A new supplier takes over customers directly	An appointed energy administrator runs the failed supplier temporarily
What happens to your contract	Usually moved to a deemed contract with the new supplier	Can continue on existing terms while the administration runs
Typical timescale	Days	Can run for a year or more while a buyer or long-term solution is found
Recent example	Rebel Energy (2025), Tomato Energy (2025)	Bulb Energy (2021 to 2022)

Both routes share the same stated priority: keeping your supply running while the financial questions are resolved separately.

What to do if you are worried about your current supplier

There is rarely public warning before a supplier fails, and it is not something you can predict from your bill. Sensible precautions if you have concerns about a smaller or newer supplier:

• Avoid building up a large credit balance with a supplier you are unsure about, where your billing arrangement allows it.
• Keep your own meter readings and statements, so you have evidence of your position if things go wrong.
• Know your rights if you want to switch, covered in our guide on when to switch business energy, so you are not caught in a fixed term you cannot easily leave if you want to move to a larger, more established supplier.
• Raise concerns through the right channel if you are struggling to get information from your supplier. Our guide to business energy complaints explains when the Energy Ombudsman can help, and this sits alongside, not instead of, Ofgem’s own regulatory role.

Whatever happens to your current supplier, once you are ready to compare, you can compare business energy quotes with us.

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