Compare business electricity prices

Find the cheapest business electricity rates per kWh in January 2026

Running a business involves managing several expenses, and one of the largest ongoing costs is electricity. Whether you operate a small start-up or a large enterprise, finding the best business electricity rates can significantly impact your bottom line. With energy prices fluctuating and suppliers offering different rates, how do you ensure you’re getting the best deal? That’s where our business electricity price comparison tool comes in.

At EnergyCosts.co.uk, we provide a quick and simple way for businesses to compare commercial electricity rates from a wide range of trusted suppliers. Our easy-to-use comparison tool allows you to find competitive prices tailored to your business needs, helping you save time, money, and hassle.

---

Average business electricity tariff prices – commercial rates per kWh

Electricity prices for businesses can vary widely based on factors such as region, industry, and size. The table below shows the average commercial electricity cost per kWh for different business sizes in the UK:

Supplier	Unit rate PC 01–04 (p/kWh)	Standing charge PC 01–04 (p/day)	Unit rate PC 05–08 (p/kWh)	Standing charge PC 05–08 (p/day)	Estimated monthly cost (3,000 kWh)	Estimated annual cost (36,000 kWh)	Standing charge share (%)	Renewable electricity (%)	Best suited business type
Octopus Energy	32.0	85	30.5	180	1,215	14,619	21%	100	Microbusinesses, offices
British Gas	31.5	95	29.8	210	1,222	14,787	23%	0	Retail, hospitality
EDF Energy	34.2	105	32.0	240	1,341	16,104	24%	0	SMEs, manufacturers
E.ON Next	36.5	110	34.0	260	1,426	17,163	24%	0	Growing SMEs
SSE	33.8	100	31.5	230	1,314	15,828	23%	0	Multi-site SMEs
Scottish Power	34.5	115	32.2	250	1,378	16,575	25%	0	Shops, offices
Utilita	31.0	90	29.0	200	1,200	14,424	23%	0	Small retail
OVO Energy	33.0	95	31.0	220	1,275	15,354	23%	0	Offices, services
Opus Energy	32.5	120	30.8	280	1,335	16,158	27%	0	Medium SMEs
TotalEnergies	33.5	100	31.5	240	1,305	15,684	23%	0	Industrial SMEs
Yü Energy	39.6	300	38.0	1,100	1,878	22,644	48%	0	High-risk / OOC sites
Drax	35.9	200	33.5	450	1,677	20,214	36%	0	Larger SMEs
Crown Gas & Power	34.0	130	32.0	300	1,409	16,980	28%	0	SMEs
Good Energy	52.0	210	49.5	420	2,061	24,879	37%	100	ESG-focused businesses
Ecotricity	34.0	70	34.0	350	1,230	14,885	17%	100	Sustainable SMEs
Utility Warehouse	30.5	65	28.5	140	1,115	13,398	18%	0	Microbusinesses
United Gas & Power	29.8	600	29.8	4,000	1,794	21,684	55%	0	OOC / legacy contracts
Ruby Energy	46.2	300	42.7	500	1,926	23,256	47%	0	Distressed / OOC sites
SEFE Energy	28.5	220	27.5	450	1,389	16,782	35%	0	Energy-intensive SMEs

It’s important to note that these are average figures, and actual rates can vary based on your specific location, energy supplier, and contract terms. That’s why using our comparison tool is so important—it helps you get the most accurate and competitive rates for your business.

Methodology used

• Profile class 01–04 (small business) used for cost calculations
• Electricity usage:
  • Monthly: 3,000 kWh
  • Annual: 36,000 kWh
• Costs shown exclude VAT and CCL
• Estimated monthly cost = (unit rate × 3,000 ÷ 100) + (standing charge × 30)
• Estimated annual cost = (unit rate × 36,000 ÷ 100) + (standing charge × 365)

---

---

Understanding business electricity tariffs pricing

Business electricity tariffs are typically more complex than domestic rates, as they vary based on the size of the business, location, and electricity consumption. Here are some factors that influence business electricity prices:

• Consumption volume: Businesses with higher electricity usage often benefit from lower rates per kilowatt-hour (kWh). However, smaller businesses may still find competitive tariffs if they compare carefully.
• Contract length: Business energy contracts can range from one to five years. Longer contracts may offer stability in terms of price, while shorter contracts provide flexibility.
• Fixed vs. variable rates: Fixed-rate tariffs lock in a price for the duration of the contract, offering protection from market fluctuations. Variable-rate tariffs, on the other hand, can change in response to market conditions, which may offer opportunities for savings but also poses risks if prices rise.
• Peak and off-peak rates: Some suppliers offer tariffs with different rates for peak and off-peak usage. This can be particularly useful for businesses that operate outside traditional working hours.

---

How business electricity pricing is actually calculated

Business electricity prices are made up of several separate cost components, not just the headline unit rate shown in quotes. Understanding how pricing works can help businesses spot better deals and avoid misleading comparisons.

The largest element of a business electricity quote is the wholesale cost of electricity, which fluctuates daily based on supply, demand, global energy markets and forward purchasing strategies used by suppliers. On top of this sit network charges, including Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) fees, which cover the cost of maintaining the UK electricity grid.

Suppliers also include operational costs and margins, such as customer service, billing, metering, data collection and risk management. Additional charges may apply depending on meter type, data frequency and whether the supply is half-hourly.

Finally, VAT is applied, usually at 20% for most businesses, although some may qualify for the reduced 5% rate depending on usage and eligibility. When comparing quotes, it is important to look at the total cost rather than focusing on unit rates alone.

---

Business electricity contract types explained

Business electricity contracts differ significantly from domestic energy deals, and choosing the right contract type can have a major impact on long-term costs and flexibility.

• Fixed-rate contracts are the most common option for small and medium-sized businesses. These lock in a unit rate and standing charge for an agreed period, typically between one and five years, offering price certainty and protection against market volatility.
• Variable and deemed contracts apply when a business is not actively on a fixed deal. These tariffs are usually much more expensive and can change at short notice, making them one of the costliest ways to buy electricity.
• Flexible or basket purchasing contracts are generally used by larger, high-consumption businesses. Prices are bought in stages over time, spreading market risk and potentially reducing exposure to price spikes, but they require careful management and expertise.

Contract pricing is also affected by whether the supply is half-hourly or non-half-hourly, which determines how consumption data is recorded and billed.

---

Who this comparison works best for

Our business electricity comparison service is designed to support a wide range of UK businesses, from sole traders to multi-site operations.

It is particularly well suited to small businesses, such as offices, shops, cafés and professional services, that want straightforward pricing and clear cost savings. High-usage businesses, including warehouses, manufacturing sites and hospitality venues, can also benefit from tailored quotes that reflect their larger consumption levels.

Businesses with multiple premises or expanding operations can use comparisons to review contract alignment across sites and identify opportunities to reduce overall energy spend.

Even businesses currently tied into a contract can benefit by comparing prices in advance of renewal, helping them avoid rolling onto expensive deemed or out-of-contract rates.

---

When is the best time to compare business electricity?

Timing plays a crucial role in securing competitive business electricity prices. Most suppliers allow businesses to agree a new contract up to six months before the end of an existing deal, and this is often the best time to compare options.

If a contract expires without a new agreement in place, the business will usually be placed on a deemed or out-of-contract tariff, which can be significantly more expensive. Comparing early helps avoid this scenario.

Wholesale electricity prices also change throughout the year, influenced by seasonal demand, weather patterns and global markets. While it is impossible to perfectly time the market, comparing regularly ensures businesses are not paying more than necessary.

---

Typical business electricity costs by usage level

Business electricity costs vary widely depending on annual consumption, meter type, location and contract length. However, usage-based benchmarks can provide helpful context.

Low-usage businesses such as small offices or retail units may consume between 5,000 and 15,000 kWh per year, while medium-sized businesses often fall between 20,000 and 50,000 kWh. Larger operations, including manufacturing or distribution sites, can exceed 100,000 kWh annually.

As usage increases, unit rates often fall, but standing charges and network costs still play a role in total spend. Comparing quotes based on actual consumption rather than assumptions is the most reliable way to understand true costs.

---

Green and renewable business electricity options

Many UK businesses now consider renewable electricity as part of their sustainability strategy. Green business electricity tariffs are typically backed by Renewable Energy Guarantees of Origin (REGOs), which certify that electricity has been generated from renewable sources.

While some green tariffs cost slightly more than standard options, the price gap has narrowed significantly in recent years. In some cases, renewable tariffs are competitively priced with non-green alternatives.

---

What information do I need before comparing?

Having the right information to hand makes business electricity comparison quicker and more accurate.

Ideally, businesses should have a recent electricity bill, which shows annual consumption in kilowatt-hours, the MPAN number, current unit rates and standing charges. Knowing the contract end date is also important, as it affects which deals are available.

For larger or multi-site businesses, details of each meter and site will help ensure quotes reflect actual usage patterns rather than estimates.

---

Common mistakes businesses make when comparing electricity

• One of the most common mistakes is focusing solely on the unit rate while overlooking standing charges and contract terms. A lower unit price does not always mean a cheaper overall deal.
• Another frequent issue is allowing contracts to auto-renew without reviewing the market, which can lock businesses into above-average rates. Some businesses also remain on deemed tariffs without realising how costly they are.
• Choosing an inappropriate contract length can also be costly. Short contracts may offer flexibility but less price protection, while long contracts can limit the ability to benefit from falling prices.

---

What happens after you choose a tariff?

Once a business chooses a new electricity tariff, the switching process is usually straightforward. The new supplier handles the transfer, including liaising with the existing supplier and managing administrative steps.

There is no interruption to electricity supply, as the physical infrastructure remains the same. The switch typically completes within a few weeks, depending on meter type and contract start date.

The business will receive a final bill from the old supplier and begin billing with the new supplier once the contract goes live.

---

Related guides and next steps

Businesses comparing electricity often benefit from understanding the wider energy landscape. Related guides cover topics such as deemed contracts, half-hourly meters, VAT on business energy bills and ways to reduce electricity usage.

For businesses that also use gas, comparing both fuels together can provide a clearer picture of overall energy costs and potential savings.

---

FAQ – Business electricity costs

What is the average business electricity price per kWh?
The average price for business electricity in the UK is approximately 16-19 pence per kWh, depending on your business size and consumption. For example, a micro business might pay around 18.5 pence per kWh, while larger businesses may secure rates as low as 15.5 pence per kWh.

How can my business reduce electricity costs?
You can reduce costs by switching to a cheaper tariff, improving energy efficiency, or installing energy-saving equipment. For example, energy-efficient lighting can reduce electricity consumption by up to 25%. Comparing tariffs using a price comparison tool can lead to savings of up to 30%.

Are business energy rates higher than domestic rates?
Yes, business energy rates tend to be higher than domestic rates. While domestic users pay around 15-18 pence per kWh, business rates range from 16 to 19 pence per kWh, depending on the contract and consumption level.

What is a standing charge in business energy?
The standing charge is a fixed daily fee that covers the cost of supplying electricity to your business. It typically ranges between 20-80 pence per day, depending on the supplier and the size of your business.

How does contract length affect business energy prices?
Longer contracts (3-5 years) often provide price stability, locking in rates to protect against market fluctuations. Shorter contracts (1-2 years) offer flexibility but might result in higher per-kWh prices. For example, a 5-year fixed contract might be 16 pence per kWh, while a 1-year deal could be 18 pence.

What are peak and off-peak energy rates?
Peak rates apply during high-demand hours, while off-peak rates are lower and apply during periods of low demand, such as nights and weekends. Off-peak rates can be up to 50% cheaper, allowing businesses to save by shifting operations to off-peak hours where possible.

How much can I save by switching suppliers?
Switching suppliers can save businesses up to 30% on their electricity bills. For example, a small business consuming 20,000 kWh per year could save up to £1,000 annually by moving to a more competitive tariff.

Are there green energy tariffs for businesses?
Yes, many suppliers now offer 100% renewable energy tariffs. These tariffs typically cost around the same as conventional rates—around 17-19 pence per kWh—but allow businesses to reduce their carbon footprint and support sustainability goals without incurring extra costs.

Can I switch energy suppliers during my contract?
You can switch, but early termination fees may apply, typically ranging from £100 to £500 depending on your contract size. It’s best to check the terms of your existing contract before switching to avoid penalties.

How does VAT affect business energy costs?
Businesses typically pay 20% VAT on their energy bills. However, small businesses and non-profit organisations may qualify for a reduced rate of 5%, potentially lowering their overall energy expenses significantly.

Will my business experience any disruption during the switch?
No, there won’t be any disruption to your electricity supply. The only thing that changes is your billing provider. The process is seamless, and your new supplier will handle the entire switch on your behalf.

How long does it take to switch business electricity suppliers?
The switching process typically takes 2-4 weeks, depending on your current contract’s terms and your new supplier. You’ll be notified at every stage to ensure everything goes smoothly.

Can I switch if I’m currently locked into a contract?
If you’re locked into a contract, you’ll need to check the terms for any early termination fees. However, you can still use our tool to find a better deal and set up a switch for when your current contract ends.

Are there any hidden fees or costs associated with switching?
Our comparison tool is completely free to use. There are no hidden fees, and we’re transparent about all costs associated with switching energy suppliers.

What if my business grows or changes location?
If your business expands or moves to a new location, it’s important to review your electricity needs. You can use our tool to find a tariff that better suits your new requirements.