In the UK, many households benefit from the Ofgem energy price cap, which limits the maximum unit rate suppliers can charge. But what about businesses? Understanding how the energy cap applies — or doesn’t — is important for managing your company’s bills.
Does the energy price cap apply to businesses?
No. The Ofgem price cap only applies to domestic customers. Businesses do not benefit from a standardised energy price limit. Instead, business energy prices are set through contracts with suppliers, based on usage, location, and market conditions.
What protections do businesses have?
Although there is no official cap, there are other mechanisms that affect business energy costs:
- Government support schemes – In response to the energy crisis, the government introduced temporary schemes such as the Energy Bill Relief Scheme (EBRS) and later the Energy Bills Discount Scheme (EBDS) to help businesses. These schemes ended in March 2024, but similar measures may be introduced if prices spike again.
- Contract regulation – Business energy contracts are legally binding, but Ofgem requires suppliers to treat microbusinesses fairly, including clear contract terms and billing transparency.
- Market competition – With no cap, the main way businesses can manage costs is by comparing tariffs and negotiating with suppliers.
What is a microbusiness?
Some smaller companies qualify as microbusinesses, which benefit from extra protections. You are a microbusiness if you meet one of the following:
- Fewer than 10 employees and annual turnover under €2 million (around £1.7 million).
- Annual electricity consumption of less than 100,000 kWh.
- Annual gas consumption of less than 293,000 kWh.
Microbusinesses must receive clear information on contract terms, and suppliers must make it easier for them to switch.
How to keep costs under control without a cap
- Compare suppliers regularly – using a site like EnergyCosts.co.uk helps ensure you don’t overpay.
- Negotiate better terms – contract length and timing can make a big difference to rates.
- Improve efficiency – reducing consumption lowers exposure to market volatility.
- Consider renewable tariffs – green tariffs can sometimes be cheaper and provide long-term stability.
Final verdict – What is the energy cap for business?
There is no official energy price cap for businesses in the UK. Instead, companies must manage costs through careful contract choices, regular supplier comparisons, and energy efficiency measures. While government schemes may provide temporary relief during crises, long-term savings depend on being proactive.
FAQ – The business energy cap
No. The Ofgem price cap only applies to households. Businesses must negotiate contracts directly with suppliers, so rates vary depending on usage, size, and location.
Yes, but only temporarily. The Energy Bill Relief Scheme (EBRS) and later the Energy Bills Discount Scheme (EBDS)provided discounts for businesses until March 2024. These are no longer in place.
Yes. Microbusinesses benefit from clearer contract terms, easier switching, and greater billing transparency. However, they are not covered by an energy price cap.
The best strategies are to compare suppliers, fix rates at the right time, improve efficiency, and consider renewable tariffs. Energy comparison services like EnergyCosts.co.uk make this process easier.
At present, there are no plans for a permanent cap on business energy. Instead, government support tends to come in the form of temporary schemes during periods of extreme market volatility.