Getting a good price on your electricity is a straightforward way to save your business a lot of money.
There are other important things to think about, however, including the electricity tariff you choose and the energy supplier you decide to partner with.
Compare like-for-like quotes from as many electricity providers as possible to find the best deal for your business’ needs.
All businesses need electricity to operate: coffee shops need electricity to brew warm, delicious drinks, manufacturing plants need electricity to power their machines and offices need electricity to avoid going back to the dark days of a pen and paper. No matter what your business is, there is no denying that electricity is essential for your day-to-day functioning.
Because of this, electricity is also one of the biggest overhead costs that companies face. So it’s not hard to see why you’d be interested in reducing the amount you spend on your electricity – after all, you don’t want to be paying more than you need to be. This guide will help you to compare electricity rates, the different tariffs and leading suppliers for your business, so that you can get the best deal on your electricity.
In This Guide to Business Electricity
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Compare Business Electricity Rates
The way that business electricity rates are calculated is quite complex. If you look at your latest energy bill, you’ll notice that it is broken down into lots of smaller costs and it can be difficult to understand what they all are. What is the Climate Change Levy (CCL) tax? And why have you been charged VAT? Luckily, there are only two costs that you need to pay close attention to. These are the unit cost and the standing charge.
• The unit cost is how much you are charged (in pence) for each kWh of electricity that your business uses.
• The standing charge is a daily fee (in pence) that your energy supplier charges you for providing your business with electricity.
Unfortunately, business electricity rates are completely bespoke for each business, so it’s difficult to know whether you’re getting a good deal on your electricity without comparing quotes from a handful of energy companies. However, as a guide, if your unit cost and standing charge are lower than the industry averages, you’re probably getting a good deal.
Av. Unit Cost (p/kWh)
Av. Standing Charge (p/day)
To give you an idea of how much you should be paying for your electricity, we’ve calculated the average annual electricity bill for different sized businesses based on how much power they use.
Annual Electricity Usage (kWh)
Annual Electricity Bill
5,000 to 10,000
£848 to £1,598
15,000 to 25,000
£2,348 to £3,848
30,000 to 50,000
£4,598 to £7,598
*Calculations based on a unit cost of 15p and a standing charge of 27p.
For the full lowdown on the cost of electricity for businesses and a comparison of the rates charged by different energy suppliers, check out our business electricity prices page.
Compare Business Electricity Tariffs
A tariff determines how much you’ll pay for your electricity. It’s essentially the pricing structure of your electricity contract with your energy supplier. There are several different electricity tariffs available, so make sure you take a look at all of them to ensure that you choose the right one for your business needs.
Also known as a variable or standard tariff, a flexible tariff is often an energy company’s ‘default’ tariff that you’ll be put onto unless you state otherwise. Flexible tariffs are influenced by the wholesale market price of electricity. So if something happens that causes electricity prices to rise, you’ll be charged more for the electricity that you use (i.e. your unit cost will increase). The opposite applies if there is a sudden fall in the market price of electricity.
✔ If you’re a risk taker, flexible tariffs are a great option because you can benefit from cheap electricity when market prices fall. This could save your business a lot of money.
✔ Flexible tariffs are a smart option if you don’t want to be tied down to a contract as they often don’t have a fixed length. This means that you’re free to leave your energy supplier at any time and won’t be hit with expensive penalties.
✘ If market prices for electricity suddenly spike, you’ll end up paying unnecessarily high prices for your electricity on a flexible tariff. Your business could therefore be spending a lot of money just to power its premises.
With a fixed tariff, the amount you’ll pay for your business electricity stays the same for the entire duration of your contract. This doesn’t mean that you’ll pay a fixed amount for your electricity each month; it simply means that the cost per kWh of electricity will not change, regardless of variations in the market price of electricity.
✔ Fixed tariffs provide you with protection from sudden price increases in the market price of electricity. This means that they are often the most affordable type of tariff as you won’t be paying unreasonably high prices for your electricity.
✔ If you want to better manage your cash flow, fixed tariffs are a good choice as you’ll know exactly what you’re being charged each month for every kWh of electricity your business uses.
✘ When the market price of electricity falls, you won’t be able to benefit from cheap rates for your electricity. This could mean your business is missing out on an opportunity to save money.
✘ Fixed tariffs often have an end date, meaning that you are tied into a contract with your energy supplier for a predetermined amount of time (typically between 1 and 5 years). If you want to leave your energy company before your contract expires, it’s likely you’ll be hit with expensive exit fees.
As its name suggests, a green tariff is the most eco-friendly of all tariffs. Opting for a green tariff means that some (or all) of the electricity supplied to your business premises is generated from renewable sources, such as hydropower and wind. In some cases, a green tariff can also mean that your energy supplier will contribute towards environmental schemes on your behalf with the money you used to purchase electricity from them.
✔ Green tariffs provide a great opportunity for your business to improve its brand reputation by showing your clients and customers that you’re taking steps to reduce your carbon footprint.
✔ Green tariffs can be both fixed and flexible in nature – so whatever type of tariff you want, your business can still invest in renewable electricity and sustainability projects.
✘ Although the renewable energy market is growing, it can still be difficult to find energy suppliers that offer green electricity tariffs.
Dual Fuel Tariffs
Like with domestic energy tariffs, a dual fuel tariff for your business means that you get both your electricity and gas from the same energy supplier, rather than having separate contracts for your electricity and gas from different suppliers. Essentially, all the energy that your business uses is combined into 1 contract with a dual fuel tariff. To find out more about gas for your business, visit our guide to business gas.
✔ If you want to manage your energy account better, going for a dual fuel tariff is a good choice as all the information you need can be found in one place, whether it’s on your bills or on your energy supplier’s website.
✔ Some energy companies offer special discounts to businesses who enter into an electricity and gas contract with them. This could end up saving you a lot of money on your energy.
✔ Dual fuel tariffs can be fixed, flexible or green in nature, meaning you can still enter into one regardless of the specific type of tariff you want.
✘ Very few energy suppliers actually offer dual fuel tariffs for business customers, so you might find it difficult to find one.
Which Business Electricity Tariff Is Right for Your Business?
When choosing which tariff to go for, it’s all about figuring out what’s right for your business. For example, there’s no point getting tied into a fixed tariff if you’re not intending to stay at your current business premises for very long because you’ll be stung with exit fees if you try to leave the contract early.
Here are some things to think about when deciding which electricity tariff is right for your business:
• Do you want to benefit from potential falls in the market price of electricity?
•How important is it for your business to be powered using green electricity?
• Do you want to combine both your electricity and gas supply into one contract?
•How much electricity does your business use and does this amount change often?
Compare Business Electricity Suppliers
In recent years there has been a huge growth in the number of energy companies operating in the UK. Many small, independent suppliers have started to penetrate the energy market, creating more competition with the long-established, larger suppliers such as E.ON and SSE. Obviously this means that businesses now have much more choice when it comes to choosing who to use for their electricity, but it can make the task more difficult.
This is where we can help. By carrying out an independent review of more than 25 business electricity suppliers on factors that are important to customers – tariffs, prices, reputation – we’ve been able to identify which suppliers we believe offer the most value to businesses.
Here is our rundown of the 5 best business electricity suppliers.
Online account management and via the Bulb app
★ ★ ★ ★ ★
Aim to beat prices offered by larger suppliers
★ ★ ★ ★ ★
Fair prices with no exit fees or penalties
★ ★ ★ ★ ★
UK call centre with an average wait time of 21 seconds
★ ★ ★ ★ ★
Offer free smart meter installation for accurate billing
★ ★ ★ ★ ★
Supplier Score: ★ ★ ★ ★ ★
Bulb is one of the newest green energy suppliers in the UK. Founded in just 2015, the company’s mission is to solve the issues that plague the large energy companies: inefficiency, poor customer service, unfair prices and confusing tariffs. And it seems that Bulb is doing a good job, achieving an excellent Trustpilot score of 9.8 from over 4,500 customers.
Bulb offer just one simple flexible tariff for business electricity, made up of 100% renewable energy from hydropower and anaerobic digestion. This tariff has no end date, meaning you are free to leave at any time and won’t be hit with any expensive penalties. Bulb’s electricity prices are the lowest of any renewable energy supplier in the UK. Other benefits to its business customers includes online account management and a UK-based customer service team.
Supplier Score: ★ ★ ★ ★ ★
D-ENERGi is an award-winning energy supplier that provides electricity to a wide range of business sectors including retail, manufacturing, hospitality and education. It offers a fixed electricity tariff to its business customers, with a length of between 1 and 5 years depending on your business’ circumstances. The company also pledges to offer all of its customers (existing and new) the most competitive prices in the energy market.
D-ENERGi has received very positive reviews from its customers, who are particularly impressed with the company’s helpful, polite and efficient customer support team. This has earned it a Trustpilot rating of 8.9. By using D-ENERGi for your business electricity, you can also benefit from a range of additional energy services including meter installation and repairs.
Supplier Score: ★ ★ ★ ★ ★
Founded in 1996, Ecotricity claims to be the world’s first green energy supplier. The company prides itself on offering fair and ethical pricing, and provides just one simple fixed electricity tariff to all it’s business customers. This ranges in length from 1 to 2 years. Of course its electricity is 100% green, and generated from wind and solar power.
Ecotricity now works with over 10,000 small, medium and large businesses across the UK, including the RSPB. One of the company’s biggest selling points is its customer service – Ecotricity claims to have the lowest number of customer complaints of any energy company in the UK. When looking at the reviews it has received from customers, Ecotricity has achieved a good Trustpilot score of 7.3/10, placing it in the top 10 energy suppliers for reputation.
Supplier Score: ★ ★ ★ ★ ★
OVO Energy was established in 2009 and since then, it has attracted over 800,000 domestic and business customers, making it the largest independent energy supplier in the UK. The company’s aim is to make energy simpler, greener and cheaper. OVO Energy currently only provides electricity to businesses, and offers a range of fixed tariffs of up to 2 years in length.
The company has a real focus on its relationship with customers, and its reviews certainly seem to suggest that it does put the customer first – many have praised OVO Energy’s helpful and friendly support team, and the speediness at which problems get dealt with. This has earned the company a great Trustpilot score of 8.8/10.
United Gas and Power (UGP)
Supplier Score: ★ ★ ★ ★ ★
Based in Leeds, UGP is a business-only energy supplier that offers 1, 2 and 3 year fixed electricity tariffs to small, medium and large businesses across the UK. A select number of its tariffs come with zero standing charges, which could save you a lot of money on your electricity! UGP also offers their business customers the option of updating to a smart meter for more accurate billing and closer monitoring of energy usage.
The company has received excellent reviews from its customers, which has earned it an impressive Trustpilot score of 9.2. One particular benefit for your business is UGP’s team of UK-based dedicated account managers who efficiently deal with customer queries and complaints.
Which Business Electricity Supplier Should You Choose?
When choosing a business electricity supplier, you should compare like-for-like quotes from as many different companies as possible. This will ensure that you find a supplier that’s right for your business and offers you a range of services that you can benefit from. When comparing business electricity companies, there are a number of things that you should think about to help you make your decision. These include:
•How do they generate their electricity? Is it from renewable sources?
•Do they offer the type of tariff you want?
•What price have they quoted you? Could you get a cheaper price elsewhere?
•Do they enforce harsh penalties if you terminate your contract early?
•What is their customer service like? Have they received a lot of complaints?
•Do they provide useful additional services such as online account management?
For more information about business energy suppliers and how to switch, visit our best business gas and electricity providers page.
How to Compare Business Electricity Quotes
Electricity quotes are bespoke for every business. Without carrying out a full assessment of your business needs, it’s impossible to supply you with an accurate quote. The problem is that comparing quotes from a number of energy companies can take a lot of time – and we appreciate that time isn’t something business owners have a lot of.
Luckily, we can help you. Our expert comparison service allows you to compare business electricity quotes quickly and easily – and it’s completely free of charge! By filling in this form, we’ll put you in touch with our carefully selected partners who’ll find you the best deals on electricity for your business by comparing quotes from over 20 suppliers. You then just have to pick the deal you want, and our partners will take care of the rest.
When filling in the form, you’ll need to have your most recent electricity bill to hand, as well as have the details of your current electricity supplier and know the end date of your contract. Remember that once you sign a contract and choose a new energy supplier, you will be tied into that agreement – so make sure you read the terms and conditions in full before signing on the dotted line!