Business Energy
Business Energy Bills
Average business gas and electricity bills explained
If you want to cut the cost of your business gas bills, or make savings on your annual electricity bills, it helps to know how and when you’re using energy, and what exactly you’re being charged for
Which information is shown on my business energy bill?
A business energy bill can appear complicated, but you should be able to find the necessary information – we’ve split it into categories to make it easier to understand:
General information
The account information on your energy bill includes:
- Bill date: When you receive your bill
- Bill number: A reference number for your supplier to identify your bill
- VAT number: Your registered VAT number
- Account number: Your unique account identifier
- Contract details: A summary of the details of the contract you have with your supplier
- Billing period: The time period over which you’re being charged for energy
- Type of charge: Whether your bill is based on an accurate or estimated usage figure
- MPAN/MPRN: A number used by suppliers to identify the energy meters on your property
Charges
These are the charges on your bill, which include:
- Billing period charges: The amount you’re being charged overall during the billing period
- Outstanding charges: The amount you owe, if any, from previous bills
- VAT charges: The amount added to your bill for value-added tax (VAT)
- Total amount due: The amount you owe after adding up all the above
- Cost breakdown: A breakdown of charges that allows you to see exactly where your money’s going
What are the individual costs on my business energy bill for?
Your business gas and electricity bills can look complicated at first glance, because they include several different types of charges. These are the charges you might see on your bill:
- Wholesale energy costs: The costs your energy company pays to buy your gas and electricity from wholesale suppliers. They buy the energy they expect you to use in advance, to make sure they don’t run out during your contract
- Transmission Use of System (TNUoS) charge: This covers the cost of transporting and distributing your energy, while some of it goes towards maintaining the National Grid
- Distribution Use of System (DUoS) charge: Costs applied by companies that are licensed to distribute electricity in the UK, known as the Distribution Network Operators (DNO)
- Climate Change Levy (CCL): A tax designed to encourage businesses to improve their energy efficiency and reduce their carbon emissions. Some companies are exempt from paying this, depending on how much renewable energy they use
- Metering costs: The cost of buying and maintaining your gas and electricity meters
- VAT: This is usually charged at 20% on business gas and electricity bills, but if you use less than 33 kWh of electricity or less than 145 kWh of gas per day, you may be charged a lower rate of 5%
- Supplier margins: The amount your supplier makes from your custom, which includes marketing, acquisition and admin costs as well as profit
Which business energy rates should you be paying?
Your business energy costs depend on a number of factors. While cheap rates help keep your costs down, the number of employees, the size of your premises and how energy efficient your business is all have an effect on your overall gas bill.
These tables will give you an idea of how suppliers class your business size in relation to your energy usage.
Average business gas use
| Business size | Low end usage (kWh) | High end usage (kWh) |
|---|---|---|
| Microbusiness | 5,000 | 15,000 |
| Small business | 15,000 | 30,000 |
| Medium business | 30,000 | 65,000 |
| Large business | 65,000 + | - |
Latest business gas rates per kWh
| Business size | Average annual usage (kWh) | Price (per kWh) | Standing charge (daily) |
|---|---|---|---|
| Micro business | 5,000 - 15,000 | 7.7p | 42.1p |
| Small business | 15,000 - 30,000 | 7.6p | 40.3p |
| Medium business | 30,000 - 65,000 | 7.6p | 48.3p |
| Large business | 65,000 + | 7.4p | 41.3p |
Average business electricity use
| Business size | Low end usage (kWh) | High end usage (kWh) |
|---|---|---|
| Microbusiness | 5,000 | 15,000 |
| Small business | 15,000 | 25,000 |
| Medium business | 25,000 | 50,000 |
| Large business | 50,000 + | - |
Latest business electricity rates per kWh
| Business size | Average annual usage (kWh) | Price (per kWh) | Standing charge (daily) |
|---|---|---|---|
| Micro business | 5,000 - 15,000 | 25.4p | 57.1p |
| Small business | 15,000 - 25,000 | 24.9p | 75.8p |
| Medium business | 25,000 - 50,000 | 25.4p | 88.2p |
| Large business | 50,000 + | 23.0p | 78.4p |
Note: Prices are correct as of May 2024. Rates and bill size may vary according to your meter type and business location. The prices you’re quoted may be different from the averages shown. The figures shown are the average unit rates and standing charges quoted by Bionic per business size from May 1 to May 7, 2024.
How can I pay my business energy bill?
While some providers have certain rules about how you can pay your business energy bill, in general you’ll be able to pay it in several ways:
Direct debit
This sets up an automatic payment from your business bank account to your supplier, and some suppliers offer discounts for customers who pay using direct debit. However as your monthly bill will change depending on your usage – for example, it’s likely to be higher during winter – it’s up to you to make sure you pay the right amount.
Online bank transfer
Making an online bank transfer or BACS can help you pay your bill more accurately, as you’ll be able to choose the amount based off the energy you use. However unlike direct debits, the payments won’t be automated, and you have to remember to pay each.
Post Office
Some business energy bills come with a bank giro slip at the bottom. All you need to do is fill out the details and take it to your local Post Office to make the payment.
Cheque
You can also pay your business energy bill by cheque, which lets you pay exactly how much you need. It usually takes up to five working days for post to arrive and cheques to clearclear – however, if the cheque doesn’t arrive on time, you may have to pay late fees.
How are business energy bills calculated?
Business energy bills consist of more than just the amount of energy you use per month. Your monthly bill will comprise the following:
- Amount of energy used – This is the number of kWh of energy used multiplied by the unit rate you pay on your current tariff
- Standing charge – This is a flat daily charge you have to pay, regardless of how much energy used
- Taxes and levies – Finally, any additional charges such as VAT and the Climate Change Levy are added to your bill
New Energy bills support scheme for businesses
The UK government runs an Energy Bill Relief Scheme (EBRS) for non-domestic customers in Great Britain and Northern Ireland. It provides support to business and public sector organisations by giving a discount on wholesale energy prices.
If you’re eligible, you’ll receive a discount on your gas and electricity unit price. This is applied automatically to your bill in pence per kilowatt hour (p/kWh) – you won’t have to provide any bank details.
For more information about the scheme, visit the GOV.UK website.
New Do businesses pay more for electricity?
Businesses sometimes pay a lower price per energy unit compared with domestic customers. However, there are a few other things to take into consideration.
For example, businesses have to pay more VAT on their tariffs. This is usually 20%, compared with 5% for domestic energy tariffs. If your businesses is VAT registered, you can claim this back. Find out more in our guide to VAT and business energy.
Businesses are also subject to the Climate Change Levy (CCL), which is an extra charge added to every kWh of electricity or gas.
As a result, these additional charges that businesses face can push up the cost of business energy. So, if you’re comparing it to domestic energy tariffs, bear in mind that the unit price won’t tell you the full story.
There are some exceptions on both VAT and CCL, though. For example, a business doesn’t have to pay CCL and only pays 5% VAT if it uses less than an average of 33 kWh or electricity and 145 kWh of gas per day (which is much higher than the average domestic usage).
How to cut your business energy bills
The current energy market volatility means that the usual energy saving measures might not make too much of a dent in your bills. The only way to protect against future price hikes is to fix your rates.
But we should all be mindful of ways we can use less energy, regardless of how much money it will save. So here are some tips to help your business be more energy efficient.
The more energy your business uses, the more expensive your next bill will be. So your first step in cutting your average business energy costs should be to cut the energy your business uses.
You can start with simple measure like putting up posters to prompt your staff to switch off lights, or take bigger steps such as upgrading to more energy-efficient equipment. You could even consider making changes to your premises, to improve the insulation or maximise the amount of natural light. But this can be expensive and is usually only an option if you own the premises.
If you're unsure, our energy saving tips can help you find a solution that's right for you. Remember that any upfront costs you incur can often be recouped over time with the savings that you make.
If cost is your main reason for wanting to reduce your business’s energy consumption, then we recommended running a business energy comparison. This can help you get a better price per unit in order to reduce the amount that you’re paying even further.
To start your business energy comparison, call the business energy experts at Bionic on #CAMPAIGNBUSINESSSERVICENUMBER# today.
