Business electricity rates: are yours higher than they should be?

What UK businesses pay for electricity

Between April and June 2026, UK businesses paid an average of 24.51p per kWh for electricity, including the Climate Change Levy but not VAT. The smallest users paid more, at 38.36p. These figures come from the government and were published on 29 September 2026.

Average business electricity prices, April to June 2026

Including the Climate Change Levy, excluding VAT. Provisional figures, which may be revised. Source: Department for Energy Security and Net Zero, table 3.4.2, published 29 September 2026.

These prices cover the whole bill apart from VAT, so standing charges are spread across every kWh. To compare your own price, add up a year of bills before VAT, divide the total by the kWh they cover and multiply by 100 to get a figure in pence.

See how to work out your own price, gas prices and the trend since 2019

What affects the electricity rates you're offered

Business electricity prices aren't set from a public price list. Instead, each supplier prices your site based on a few things it knows about you:

• How much you use. If you use less, the fixed costs are spread over fewer kWh, so smaller users pay more per kWh, as the table above shows.
• When you're quoted. Suppliers base each quote on wholesale prices at the time, so it's usually only valid for a short while. The same site can be offered quite different rates a few weeks apart.
• Your site's band and meter. Your standing charge depends on which network charging band your site is placed in. Network charges also vary with the time of day, and larger sites with a half-hourly meter usually pay for the capacity agreed for them too.
• Where you are. Network charges vary from region to region, and Northern Ireland's are set separately from Great Britain's.
• The contract you choose. That means how long it runs, and whether all your costs are fixed or some are passed through as they change.
• Your business's credit record. Suppliers usually run a credit check, and depending on the result they may ask for a deposit or offer different terms.
• Being out of contract. Deemed and out-of-contract rates are usually much higher than a new fixed contract. Find your supplier's deemed rates.

If your price per kWh is well above the average for your band, one of these usually explains why.

Types of business electricity contract

The type of contract decides whether your rates can change during the term, so check which kind a quote is for before you compare prices.

How to compare business electricity quotes

A low unit rate can hide a high standing charge, so start by comparing what each quote costs over a year, then look at the terms.

1. Find your yearly use in kWh and your supply number (MPAN), which are both on your bill.
2. Work out each quote's yearly cost, using the same yearly use for every quote. Where a quote has day and night rates, work out each part using what you use in that period, then add any capacity charge.
3. Check whether it's fully fixed, or whether network and other costs can be passed through during the term.
4. Check the length and end date, and what happens when it ends, whether that's a rollover, a rolling contract or out-of-contract rates.
5. Check the exit terms, meaning the notice you'll need to give and any fee for leaving early. Business contracts don't usually come with a cooling-off period.
6. Check the broker fee if a broker arranges the contract. Suppliers have to show it in the contract's main terms.
7. Compare quotes from the same few days, because prices move with the market.

The Climate Change Levy and VAT are added on top at the same rates whichever quote you choose, so they don't change how the quotes compare.

If you're ready to move, our switching guide takes you through the steps.

Small business electricity rates

Smaller businesses usually pay more per kWh, partly because fixed costs, such as standing charges, are spread over fewer units. In April to June 2026, businesses in the very small band, using up to 20,000 kWh a year, paid an average of 38.36p per kWh, against 24.51p for all businesses.

If your business is a microbusiness, you also get extra protections:

• your supplier must tell you your renewal prices before your contract ends;
• if your contract rolls over, the new term can't be longer than 12 months;
• on an evergreen contract, one that rolls on until you end it, the notice you give can't be longer than 30 days;
• your supplier usually can't bill you for electricity used more than 12 months ago if it didn't bill you correctly at the time;
• you can take a dispute about a broker to the broker's redress scheme.

You count as a microbusiness if you have fewer than 10 employees and a turnover or balance sheet of no more than £2 million, or if you use up to 100,000 kWh of electricity or 293,000 kWh of gas a year.

Commercial electricity rates for larger sites

Commercial electricity rates are the same thing as business electricity rates: a unit rate for each kWh and a daily standing charge. On larger sites, the bill usually has more parts:

• Half-hourly metering. Sites with a maximum demand over 100 kW must be settled half-hourly, so what they pay can depend on when they use electricity, as well as how much.
• A capacity charge for the size of your connection, measured in kVA, whether or not you use all of it.
• A reactive power charge, measured in kVArh, if your equipment draws power inefficiently.
• Network charges, such as transmission (TNUoS) charges, which some contracts list separately and pass straight through.

The table at the top of this page shows how the average price per kWh changes with yearly use. Larger businesses can also buy energy in stages through a flexible contract, rather than fixing it all at once.

Choosing a business electricity supplier

Your supplier is the company that bills you. The electricity reaches your site through the same wires whoever you choose, so switching doesn't change your supply. Suppliers differ on price, on contract terms such as length and exit fees, and on what they charge if a contract ends without a new one. Find your supplier's deemed rates to see what yours charges.