Close or Rescue My Energy or Utility Company

Rescue and Closure Options for Energy and Utility Businesses

When an energy or utility company becomes insolvent, the impact is far-reaching, affecting shareholders, utility and energy networks, and consumers. If you run an energy or utility business, whether a broker, installer, or network contractor, understand your company closure and rescue options. If you're an energy company with an Ofgem supply licence, you must take additional considerations into account as a licensed supplier.

What financial pressure looks like in energy and utilities right now

Energy suppliers are undergoing immense upheaval and market uncertainty, making cost forecasting challenging. They are juggling growing environmental responsibilities, sourcing adequate gas and electricity supplies at fair prices, while maintaining a profit for investors.

Our Business Distress Index recorded a 17.8% year-on-year rise in significant financial distress across the utilities sector in Q4 2025, one of the three steepest increases among the 22 sectors we monitor. For licensed suppliers, the pressure on margins is unprecedented, as average profit per domestic customer fell to £5.31 in 2025, down from £26 in 2024, according to Ofgem’s report. In our experience, even a single bad debt or a delayed payment can tip a company into insolvency when margins are already this thin.

Another major shift reshaping consumer needs is the rise in renewable energy. The number of certified renewable installations under the Microgeneration Certification Scheme (MCS) rose by 34% in 2025. Energy companies built around the older model are seeing demand decline, while those adapting to the changing market are growing faster. This puts pressure on businesses with limited working capital as installation work is costly upfront, and the wait for payment is long.

“Shaun really helped me for quick legal advice in a stressful situation where I needed advice QUICK. Called me back within 30 seconds and gave me the advice I needed. Thank you”

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Shaun Barton
Business Debt Expert

Which insolvency regime applies to my energy or utility business?

Licensed energy suppliers

If a licensed energy supplier becomes insolvent, special considerations must be made alongside the liquidation or administration process. Ofgem rules under the Energy Act 2011 are layered on top of ordinary insolvency law, such as the Supplier of Last Resort (SoLR), which is when an alternative provider steps in to continue supplying energy to your customers.

If your energy company is operating below target, this triggers operating restrictions until a formal rescue plan is in place. We find that this is the point at which most directors need urgent advice to protect their main asset - their client base.

Energy and utility businesses

Energy and utility businesses often absorb financial shocks due to the volatility of the energy market. As suppliers pay commission, and revenue rests on whether a customer fulfils their full contract term, profits can vary considerably. Most energy companies are profitable on paper, but as profit sits in future instalments, this changes if a customer switches mid-contract or if a supplier fails.

This practice is similar for solar, heat pump, battery, and EV charger installers, as well as contractors working for utility networks. The complications sit in the contracts: deposits against undelivered work, retentions held by main contractors, retention of title on fitted equipment, and MCS certification and guarantees outlasting the company.

One installer that recently came to us illustrates how quickly company finances can deteriorate.

Background: A solar and battery storage installer, co-owned by two directors, had stopped trading and gone five months without income. The company owed HMRC over £50,000 in PAYE and VAT, faced three County Court Judgments, and had built up trade debt with around a dozen suppliers, including a battery component manufacturer.

Outcome: With no assets, cash, or recoverable invoices left, the directors decided to enter a Creditors’ Voluntary Liquidation (CVL). We distributed funds to creditors and closed the business in an orderly and timely manner. While this resolved the company’s debts, the directors carried personal guarantees. We referred them to debt restructuring specialists to negotiate their personal guarantee exposure.

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Can my energy or utility company be rescued?

If the underlying business is viable, consider your rescue options, from selling company assets, negotiating debts with creditors, including the Environment Agency, Ofgem, and HMRC, to seeking a cash injection to increase your operating capacity.

Company rescue options for energy and utility businesses include:

• Company administration puts a licensed Insolvency Practitioner in control, protecting the company from creditor action while contracts, accreditations, and the workforce are stabilised or sold on.
• Pre-pack administration arranges a sale beforehand, completing on appointment of a licensed Insolvency Practitioner. It suits a broker or installer whose value sits in live contracts, MCS accreditation, or a skilled workforce that would be lost because of a longer process.
• A Company Voluntary Arrangement (CVA) lets you repay creditors over an agreed period while remaining in control. It suits a business with a solid order book that is fundamentally viable.
• A Time to Pay (TTP) arrangement with HMRC spreads tax liabilities over months, which is often the right fit to tackle arrears built up during a slow-payment period or a period of sharp wholesale price rises.
• Invoice finance and asset finance release cash tied up in a debtor book or in plant and vehicles, useful for businesses that pay for materials and labour upfront, with a long wait ahead for payment upon completion.

We find that the company sale route is popular with company directors operating a viable business they no longer wish to run. Securing a new owner often means protecting the jobs pipeline and live contracts.

Can I sell the business instead of closing it?

A sale of the company, the trade and assets, or a customer book can deliver a better outcome for creditors and a cleaner exit than closure. For installers, MCS certification does not transfer automatically, and outstanding guarantees and part-completed jobs affect what a buyer will take on. If the business is sold, employees may transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). If not, they become preferential creditors for wage and holiday pay arrears.

If you hold a supply licence, Ofgem must be notified. Domestic customers' credit balances are protected under the Supplier of Last Resort process, this is the same for business customers.

As a company director, check any overdrawn director's loan account and personal guarantees, as you remain liable if the company becomes insolvent. Many directors are employees too and can claim director redundancy.

How do I close an energy or utility company?

If the company is insolvent and cannot be rescued, a Creditors' Voluntary Liquidation is the route most energy and utility companies take. Appoint a licensed Insolvency Practitioner to realise assets, pay creditors, handle employee claims, and close the company.  If the company is solvent and you want to exit, a Members' Voluntary Liquidation (MVL) is usually more tax-efficient.

Case study: renewable energy business sold out of administration

Our team were appointed as administrators of a consumer-facing renewable energy business. As part of the business model, consumers co-invested in wind and solar generation projects, receiving bill savings in return. As the assets sat in separate legal entities and not the company, they were protected throughout the administration.

The company had run out of cash, but the platform and its contracts still held considerable value. We ran an accelerated sale process and completed a sale of selected assets immediately after being appointed. As the company was not a licensed supplier, the generation projects were unaffected by the insolvency process.

In our experience, the energy businesses that come out intact are the ones that come to us early, while they still have flexibility around timing. Once a regulator, a lender, or a supplier sets the pace, the options narrow quickly.

Shaun Barton CPI, Partner, Real Business Rescue

Licensed insolvency advice for energy and utility businesses

Our team of licensed Insolvency Practitioners are experienced across a range of sectors, including energy and utilities. To understand your closure and rescue options, get in touch with a member of our team, and we’ll arrange a free and no-obligation confidential consultation.