Work out what your business electricity or gas costs, from how much you use, your unit rate and your standing charge, with the Climate Change Levy and VAT added. Or work out what a piece of equipment costs to run. Nothing you enter is sent or stored.
How the calculation works
Your energy bill is mainly two prices: a unit rate for each kWh you use, and a standing charge for each day you have a supply. To work out a cost:
- Multiply the kWh you use by your unit rate. A business using 15,000 kWh of electricity a year at 25p per kWh pays £3,750 for the energy.
- Add the standing charge for each day. At 60p a day, a year of standing charges is £219.
- Add the Climate Change Levy, if you pay it. At 0.801p per kWh, 15,000 kWh adds £120.15.
- Add VAT on the total, including the levy. At 20%, £4,089.15 becomes £4,906.98.
To work out kWh from a power rating, divide the watts by 1,000 to get kW, then multiply by the hours it runs. A 2,000 W heater running for 3 hours uses 6 kWh. Our guide to kW, kWh and kVA explains the units.
Our guide to business standing charges explains how to compare quotes with different unit rates and standing charges.
Want us to check your rates? Our free check compares your rates, standing charges and contract terms with today's market. A specialist will then ring to talk you through it, with no obligation. You don't need a bill to start.
Questions about energy costs
How do I work out the cost of my business electricity?
Multiply the kWh you use by your unit rate, add your standing charge for each day, then add the Climate Change Levy and VAT if you pay them. The calculator above does it for you.
How do I convert watts to kWh?
Divide the watts by 1,000 to get kW, then multiply by the number of hours the equipment runs. A 2,000 W heater running for 3 hours uses 6 kWh.
What VAT do businesses pay on energy?
Most businesses pay 20%. Qualifying use, such as care homes, a charity's non-business use and sites using very little, pays 5%, and in Great Britain qualifying use of electricity is 0% from 1 October 2026 to 31 March 2027.
What is the Climate Change Levy?
A tax on the electricity and gas businesses use, added to your bill by your supplier. From 1 April 2026 to 31 March 2027 it's 0.801p per kWh for both, and VAT is charged on it too.
How does my price compare with other businesses?
Our business energy prices page shows what businesses paid per kWh in each size band, on the government's latest figures. Work out your own price per kWh, including standing charges and the levy but not VAT, and compare it with your band.
Why doesn't the calculator match my bill exactly?
Bills can include other charges, such as capacity or metering charges at larger sites, and rates can change part way through a billing period. Estimated readings also change what you're billed for.
Sources
All last checked 20 October 2026.
- Department for Energy Security and Net Zero, gas and electricity prices in the non-domestic sector (tables 3.4.1 and 3.4.2): average prices by size band.
- HMRC, Climate Change Levy rates: the levy rates.
- HMRC, VAT on fuel and power (VAT Notice 701/19): VAT rates; qualifying use; the small-site limits; the temporary 0% rate on qualifying electricity in Great Britain.