Business electricity
Business electricity, explained and reviewed
Business electricity is bought on a contract between your business and a supplier, usually for a fixed term. You pay a unit rate for each kWh you use and a daily standing charge. There is no price cap for business energy, so the terms you agree matter.
What you pay for
| Charge | What it is |
|---|---|
| Unit rate | Pence per kWh used. Some meters have separate day, night or weekend rates. |
| Standing charge | A fixed daily amount per supply point, whatever you use. |
| Capacity charge | For many half-hourly supplies, a charge based on the agreed supply capacity (kVA). |
| Climate Change Levy | An environmental tax on business energy, unless your use is low enough to be exempt. |
| VAT | Usually 20%. Supplies averaging no more than 33 kWh a day qualify for 5%. |
Which type of supply you have
Most small and medium sites have a standard meter read monthly or quarterly, or a smart or advanced meter. Larger sites have half-hourly metering, which records use every 30 minutes and is priced on that detailed profile. The industry is moving all meters to half-hourly settlement, which may change how some smaller supplies are priced over time.
Fixed or flexible
Most smaller businesses choose a fixed-price contract, which fixes the unit rate and standing charge for the term. Some fixed contracts pass through certain network or policy costs, so check what is and isn't fixed. Larger users sometimes buy energy flexibly in stages instead. See fixed vs flexible.
When to review
The best time is before your current contract ends. Many suppliers will price a new contract months ahead of your end date. If you've moved premises or your contract has already ended, you may be on deemed or out-of-contract rates, which are usually higher.
Questions
Is there a price cap for business electricity?
No. The Ofgem price cap applies to household energy only.
What do I need for a review?
A recent bill is ideal. It shows your MPAN, current rates, standing charge and usually your end date.
Can I get electricity and gas on one contract?
Many suppliers offer both, but they are often separate contracts with their own end dates.
We introduce enquiries to an energy broker partner and may receive a fee. We're not a supplier and don't give whole-of-market advice. How we're paid
Your next energy contract deserves a closer look.
About two minutes. No obligation.