Business Energy

Cheap Business Energy Rates

From running machinery to powering your printer, keeping your staff and customers warm and even turning on the lights, energy is your business’s right-hand man.

woman looking at tablet

Energy gives your business the power it needs to succeed but it’s important to make sure that you’re getting enough out of the relationship. Electricity and gas help move your business forward, but they can also be one of its biggest expenses. And to fan the flames, it’s easy to end up paying more than you should for your business energy.

What is on your business energy bill?

Suppliers structure their bills slightly differently, but they’ll each contain the same information:

  • Bill date, bill number, account number and VAT number – These elements can be used by suppliers to identify your account and bill during an enquiry.
  • MPAN/MPRN Number – This code identifies your meter and property.
  • Contract details – This is the first place to look when determining if you’re on a good energy tariff.
  • Billing period – This the period of usage being charged for.
  • Type of charges – If you’re being charged according to estimated rather than accurate readings, you’ll need to send your supplier regular readings to make sure your bill reflects your consumption habits.
  • Outstanding charges – This indicates if you owe anything from previous bills.
  • Charges for the billing period – These are the charges that you’ve incurred during this billing period.
  • VAT charge – This shows how much VAT is added onto your bill.
  • Total amount due – This is the full amount you owe, including any outstanding amounts from previous bills, costs from the current period and VAT.
  • Breakdown of charges – This is a summary of exactly what you’re being charged for along with the percentage of VAT for this billing period.

What is an average business gas bill?

Commercial energy suppliers create bespoke quotes for companies, taking into account factors such as location, business type and size. Because of this, no two company’s energy bills will ever be the same, but industry averages can be a useful guide.

Business size Average annual usage (kWh) Average price (per kWh) Standing charge (daily) Average annual price
Micro business 5,000 - 15,000 10.1p 46.9p £1,181
Small business 15,000 - 30,000 9.6p 59.0p £2,375
Medium business 30,000 - 65,000 10.4p 95.7p £5,289

What is an average business electricity bill?

Business size Average annual usage (kWh) Average price (per kWh) Standing charge (daily) Average annual price
Micro business 5,000 - 15,000 29.5p 51.9p £3,139
Small business 15,000 - 25,000 29.3p 73.4p £6,860
Medium business 25,000 - 50,000 27.0p 223.7p £13,641

Note: 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 August 14 to August 18, 2023. Rates do not include any Energy Bills Discount Scheme discount.

What costs make up your business energy bill?

There are two main costs that make the biggest difference to your business energy bills, the unit rate and the daily standing charge. The unit rate is the amount you pay per each kWh of energy used. The standing charge is a daily cost that covers national grid maintenance and transporting energy.
There are several things that contribute to the cost of the standing charge and the unit rate:

Wholesale Costs – Suppliers buy energy in bulk at a wholesale cost. This is reflected in the unit rate and can be affected by natural disasters, political events and conflicts.

Transmission Use of System charges (TNUoS) – This charge covers the supplier for maintaining the national grid and energy transportation. It’s encompassed in the standing charge and varies depending on location.

Distribution Use of System charges (DUoS) – This covers the costs incurred by your Distribution Network Operator (DNO), a regional energy transportation body. It varies depending on contract type, maximum supply capacity and consumption pattern.

Climate Change Levy (CCL) – The Climate Change Levy is a government tax on each unit of energy used by commercial customers to encourage reduction.

Value Added Tax (VAT) – VAT is usually charged at 20% but can be reduced to as little as 5% if a company uses less than 33kWh of electricity or 145kWh of gas per day. Charities and other non-profit organisations can apply for a VAT reduction.

How to find the cheapest business energy rates

To get the best rates for business gas and electricity, you needs to compare the deals on offer from a range of suppliers, and you can do this in one of two ways:

  • Do it yourself – The only way to make sure you’re on the very best deal for your business, you’ll need to contact a range of suppliers to negotiate bespoke quotes from each – remember, there are no off-the-shelf tariffs and no dual fuel deals, so all contracts need to be tailored for your business. To get a full picture of what’s available, you’ll need to compare energy plans from at least 10 different suppliers, which means the process can get very frustrating and time consuming.
  • Ask the business energy experts – If you have neither the time nor the inclination to ring around, MoneySuperMarket has teamed up with Bionic to take the hassle out of business energy comparison. Give tehm a call on 0800 088 6986 and they’ll compare business energy quotes from a range of suppliers, including the Big Six and smaller suppliers, to find you the best deal at the best price. And when they find you a deal you love, they’ll handle the switch for you.

Now that you understand your bill, and the best way to compare prices, you’ll be in a better place to find out if you’re paying too much for your business energy. A short phone call to Bionic on 0800 088 6986 is all it takes to set your company on the road to cheaper business gas and electricity rates.