Business Electricity Prices

On average you'll be charged 15p per kWh of electricity that your business uses, but this varies between energy suppliers.

The amount you pay for your electricity is determined by a number of factors such as how big your business is and its location.

Compare prices from as many energy suppliers as possible to make sure that you get a great deal on your business’ electricity.



All businesses need electricity to operate, so it won’t come as a surprise that electricity is one of an organisation’s biggest overhead costs. As a business owner it can be easy to forget to review how much you’re paying for your business electricity when there are so many other things to think about.

But finding out what price you are being charged is so important - after all, you could find out that you are paying over the odds and wasting valuable money that could be saved or spent elsewhere. So securing a good deal on your business electricity is a must.

This guide will tell you everything you need to know about business electricity prices, including how they are calculated, what the energy suppliers charge and how to get the best deal.

business electricity prices

What's in This Guide to Business Electricity Prices?



How Are Business Electricity Prices Calculated?

When you receive your business electricity bill, you’ll notice that it is mostly made up of two important charges: the unit cost and the standing charge. The unit cost is the amount you pay per unit (or kWh) of electricity that your business uses, while the standing charge is a fixed daily fee that you pay to your energy supplier for providing your business premises with electricity.

While you’ll find other charges on your bill, the unit cost and the standing charge have the biggest impact on the amount that you’ll pay for your business electricity. In fact, they make up over 50% of your total bill. The lower these charges are, the less you will pay meaning the more money your business will save.

If you’re paying over 15p per kWh for your business electricity, then it’s worth shopping around to find a cheaper deal

But what does value for money look like? Below is the average unit cost and standing charge for businesses in the UK. If you find prices cheaper than these, you’ll know you’ve got a good deal on your business electricity.

• Average unit cost for business electricity: 15p

• Average standing charge for business electricity: 27p

Some energy suppliers have begun to scrap daily standing charges altogether. This means that you won’t owe a single penny to your provider when your business doesn’t use electricity - great for companies that only operate Monday to Friday! But be warned, zero standing charge deals often mean a lot higher unit costs for the electricity you do use, which could actually end up costing you more.


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Compare Business Electricity Prices

So what do the UK’s energy suppliers charge for business electricity? We’ve put together the handy table below which shows you the unit cost and standing charge for commercial electricity* quoted by energy providers. To get more accurate prices for your specific business, fill in this form to compare quotes from our carefully selected partners.

Supplier

Unit Cost (p/kWh)

Standing Charge (p/day)

British Gas
21.69p
57.44p
Bulb
10.10p
27.4p
Corona Energy
22.50p
90p
Ecotricity
14.50p
£3
EDF Energy
20.20p
50p
ENGIE
14.90p
51.6p
E.ON
17.66p
83p
Gazprom Energy
22.31p
£1.45
Hudson Energy
19.25p
45p
npower
29.17p
57.18p
Opus Energy
24p
75p
Ørsted
16.22p
£1.30
Scottish Power
17.50p
46p
SSE
19.14p
23.98p

*Costs are based on deemed rates and so are likely to be the highest prices you’ll be quoted. Deemed rates are charged to businesses who have no formal contract with an energy supplier.


But how much should your annual electricity bill be given that prices are bespoke for each business? The table below gives you an idea of the typical electricity expenditure for a company of your size.

Business Size

Examples of Businesses

Annual Electricity Usage (kWh)

Annual Electricity Cost

Micro
Startup, Florist
5,000 to 10,000
£848 to £1,598
Small
B&B, Newsagent
15,000 to 25,000
£2,348 to £3,848
Medium
Takeaway, Coffee Shop
30,000 to 50,000
£4,598 to £7,598
Large
Hotel, Manufacturer
55,000+
£8,348+

*Calculations based on a unit cost of 15p and a standing charge of 27p.


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What Affects How Much You Pay for Your Business Electricity?

A number of factors can affect how much you’ll pay for your electricity. Your energy provider will take these into account when coming up with a bespoke quote for your business.

Electricity consumption. Different businesses will use different amounts of electricity. A food manufacturing company that is open 24/7 will use significantly more electricity than a small office that is only open Monday to Friday. The more electricity you use, the lower your unit cost but the higher your standing charge.

Business size. Large, industrial companies have more bargaining power when it comes to securing low prices for their electricity. Smaller businesses are often at a disadvantage as they lack the same influence over energy suppliers, meaning they are often stuck with higher prices. But fear not! There are brokers that work on behalf of SME businesses to get them better deals on business electricity.

Contract length. The length of your contract can have an impact on the unit cost and standing charge your energy supplier charges you. On average, 6% is added to the unit cost and 2 to 6% is deducted from the standing charge for every year that you extend your contract.

Energy supplier. The energy supplier you use for your business electricity will have a big impact on how much you pay. While an explosion in the number of energy suppliers operating in the UK has caused prices to become more competitive, some suppliers still charge more than others. This is why it is so important to compare quotes from multiple suppliers - do this quickly and easily by completing this short form!

Business location. Electricity prices vary around the country, so your postcode has some influence on how much you’ll pay. This is due to factors such as how much electricity your energy company supplies in the area and how much electricity they buy from generation companies. Electricity prices tend to be the most expensive in north east England and south Wales, while the cheapest prices are found in north Scotland and the east Midlands - lucky for you if your business is located here!


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Are There Any Other Charges?

Lots of smaller costs are added to your business electricity bill on top of the unit cost and standing charge. These include: VAT, the Climate Change Levy, meter costs and transmission and distribution charges.


VAT

Most businesses will have to pay 20% VAT on their electricity bills. You’ll only need to pay 5% VAT if your business uses on average 33 kWh of electricity per day, or 12,045 kWh of electricity per year. For businesses that are domestic or residential in nature (e.g. a campsite or a B&B), you won’t need to pay any VAT on your electricity.


Climate Change Levy (CCL)

The CCL is an environmental tax charged on the electricity used by non-domestic consumers. It is designed to incentivize businesses to be more energy efficient and reduce the amount of greenhouse gases that they produce from day-to-day operations. The table below shows you how much CCL tax is charged per kWh of electricity that a business uses:

Taxable Commodity

Rate from 1 April 2018

Rate from 1 April 2019

Electricity (p per kWh)
0.56p
0.85p


Your business will be exempt from the CCL if you use a very small amount of electricity.


Meter Costs

Electricity meters may seem like simple little devices, but they are in fact advanced pieces of technology that monitor your business’ electricity usage in real time. So obviously they come at a price, and your energy supplier will recuperate the cost of installing, maintaining and repairing your electricity meter in your energy bill. Some generous energy suppliers do provide free meters to their customers, however!


Transmission and Distribution Charges

Your energy supplier has to purchase electricity from generation companies. They are then charged by the National Transmission Network and Distribution Network Operators for delivering this electricity to your business premises. Your energy supplier will pass these charges onto you and they are shown as Distribution Use of System (DUoS) charges and Transmission Network Use of System (TNUoS) charges on your bill.

• DUoS charges cover the cost of installing and maintaining local distribution networks. The more electricity that your business uses, the higher this charge will be.

• TNUoS charges cover the cost of installing and maintaining the transmission network across the UK (i.e. the National Grid). This charge is based on your share of demand on the transmission network during busy times.


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Will Business Electricity Prices Rise in the Future?

Electricity prices seems to rise every year, with some energy suppliers increasing their prices for businesses by as much as 15% year-on-year. It’s likely that this trend will continue into the future and business’ electricity bills will keep going up.

UK SMEs are overcharged almost 15% for their electricity*

*According to a report by the Competition and Markets Authority (CMA).

But why is this? It’s largely due to the wholesale price of electricity rising as demand increases, along with the upgrading of the National Grid and the UK government demanding more investment in renewable energy. This is why it is so important to shop around for a good deal on your business electricity in order to minimize the effect of price rises on your business’ overhead costs.


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6 Tips to Get Cheap Business Electricity

Finding ways to save money and improve cash flow is a top priority for many businesses. With a good supply of electricity being so important to the day-to-day running of an organisation, getting a great deal on your electricity is a surefire way to considerably cut your expenditure. Here are our top tips on how to get cheap business electricity.

1. Consider your tariff options. While tariffs aren’t very interesting, they can be very important for saving you money. There are lots of different tariffs available for business electricity, from fixed to flexible. The type you choose will depend on your business needs, but in general fixed tariffs are the cheaper option. This is because the amount you pay for your electricity won’t be affected by fluctuations in the market price of electricity. To find out more about the different business electricity tariffs, visit our business electricity comparison page.

2. Know your contract end date. This is really important if you want to avoid being put onto a rollover contract. This is when your energy provider signs you up to a new 12-month contract - and you’ll be stuck with them for the entire period! Electricity prices on rollover contracts are often 75 to 85% more expensive than other prices in the market, so make sure that you end your current contract (within the termination period) and enter into a new one before the contract end date. Don’t know when your contract end date is? It can be found on your electricity bills.

3. Look out for discounts. It’s said that a penny saved is a penny earned, so always look out for special offers. Some energy providers (e.g. E.ON and npower) offer discounts of between 2 and 5% on your business electricity if you pay your bills via direct debit. Other providers (e.g. UGP) take money off your bill if you get your gas and electricity from them.

4. Get a smart meter. This new generation of electricity meter records your business’ exact electricity usage and relays it to your energy supplier. This cuts out the need for inaccurate meter readings and estimated bills, meaning you won’t overpay for your electricity. Smart meters also enable you to better track your business’ electricity consumption, helping you to identify areas where you can improve your energy efficiency. This could help you to cut the amount of electricity you use, thereby cutting your electricity bills.

5. Generate your own electricity. One way for your business to avoid rising electricity bills is to invest in renewable energy. Installing a wind turbine or solar panels on your business premises means that you can generate your own electricity (completely free of charge!) and earn money from the UK government Feed-in Tariff (FiT).

6. Compare quotes. Comparing quotes from lots of different energy suppliers will allow you to find the best deal on your business electricity. Although it can be tempting, don’t just stay with your current supplier - many businesses are stuck with expensive deals on their business electricity simply because they haven’t looked at all the options available. You could save hundreds (or even thousands) on your business electricity by switching suppliers.


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How to Get Business Electricity Quotes

The thought of getting electricity quotes can fill business owners with dread, not least because it can take a long time and be a pretty tedious task. So we thought we’d save you the job - by using our expert comparison service, we’ll do the work for you.

All you have to do is answer some straightforward questions about your business in this form. Our carefully selected partners will then find you the best deals on electricity from various energy suppliers in the UK. You can then choose a deal that suits you, and we’ll take care of the rest - it’s as simple as that, and completely free of charge!

Before entering your details, please make sure you have your most recent electricity bill to hand and know your contract end date. This will ensure that our partners can get you the most accurate electricity quotes for your business.


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