Is there an energy price cap for businesses?

Does the energy price cap apply to businesses?

No. Ofgem is clear that you're not protected by the price cap if you have a business energy contract. The law behind the cap, the Domestic Gas and Electricity (Tariff Cap) Act 2018, only caps standard variable and default rates under domestic supply contracts: supply to domestic premises, wholly or mainly for domestic purposes.

Even for households, the cap doesn't cover everyone. It protects people on tariffs whose unit rate can go up or down with the energy market, so households on fixed tariffs are outside it too. And it caps the unit rate and standing charge, not the total bill.

Business prices are agreed with your supplier instead, and they depend on your contract. Our pages on business electricity rates and business gas prices show what businesses pay on average, from the government's latest figures.

Two exceptions are worth knowing:

• Working from home. Ofgem says that if you work from home, you're probably on a domestic energy contract, so the cap may apply. Check with your supplier.
• Northern Ireland. The 2018 Act covers England, Wales and Scotland only, so the price cap doesn't apply in Northern Ireland. There, the Utility Regulator approves the maximum tariffs that Power NI, the incumbent household electricity supplier, can charge.

What is the household price cap now?

For 1 October to 31 December 2026, the cap works out at £1,723 a year for a typical household paying by Direct Debit for electricity and gas, up 4% on the previous three months. Ofgem bases that figure on typical use of 2,500 kWh of electricity and 9,500 kWh of gas a year.

The household price cap, 1 October to 31 December 2026

Averages for England, Scotland and Wales, paying by Direct Debit. Source: Ofgem, 26 August 2026.

Ofgem resets the cap every three months, and will announce the level for January to March 2027 by 25 November 2026.

Do businesses pay more for energy than households?

It's hard to compare like for like, and we haven't found an official comparison of business and household prices in the UK. The government's figures for businesses are worked out differently from the household cap:

Why business and household prices aren't like for like

In April to June 2026, UK businesses paid an average of 24.51p per kWh for electricity and 5.28p per kWh for gas, including the Climate Change Levy but not VAT. The smallest businesses paid the most: 38.36p per kWh for electricity and 9.31p for gas. Ofgem has said the same, that smaller businesses pay the highest price.

Our business energy prices page shows what businesses of each size pay, and how to work out your own price per kWh.

Why can business energy cost more?

Several things push up what a business pays, compared with a home:

• VAT at 20%. Energy for business use is charged at the standard rate. Some uses get a lower rate, such as sites that use very little energy, residential care homes and charities' non-business use.
• The Climate Change Levy. Businesses pay it on each kWh unless an exclusion or exemption applies, at a full rate of 0.801p per kWh for both electricity and gas from 1 April 2026, rising to 0.827p per kWh from 1 April 2027. It isn't charged on household energy.
• No cap on the rates you're offered. Ofgem says business prices vary across suppliers and with the type and size of your business.
• Deemed and out-of-contract rates. If your contract ends without a new one, or you move into premises without arranging one, you'll usually pay more than on a fixed contract.
• Wholesale prices. Ofgem said in March 2026 that wholesale energy costs are volatile and will continue to be affected by the situation in the Middle East. In August 2026, it linked the 4% rise in the household cap from October 2026 to higher wholesale gas prices as a result of the ongoing conflict in the Middle East.

What protects businesses instead of a price cap?

Ofgem's rules cover how suppliers treat businesses, including what they must tell you about broker fees, with more protection for the smallest.

All businesses:

• Fair treatment. Since 1 July 2024, Ofgem's Standards of Conduct, which require suppliers to treat customers fairly, have covered businesses of every size.
• Broker fees. For contracts signed from 1 October 2024, any broker fees must be shown in the contract's main terms.
• Deemed contracts. There's no cap on deemed rates, but suppliers must take all reasonable steps to make sure deemed contract terms aren't unduly onerous.
• No cooling-off. Ofgem says there's no cooling-off period once you agree a business energy contract, so check the terms first.

Microbusinesses (fewer than 10 employees and a turnover or balance sheet of up to £2 million, or up to 100,000 kWh of electricity or 293,000 kWh of gas a year):

• Renewal prices. Your supplier must tell you your renewal prices before your contract ends.
• Rollovers. If your contract rolls over, the new fixed term can't be longer than 12 months.
• No notice to switch. Ofgem decided that from 1 October 2022, suppliers can't require a microbusiness to give notice that it intends to switch, except on an evergreen contract, one that rolls on until you end it.
• Evergreen contracts. Notice to end one can't be longer than 30 days, and the supplier must acknowledge your request within 5 working days.
• Back-billing. You don't have to pay for energy used more than 12 months ago if you weren't billed correctly for it, unless you acted unreasonably, for example by blocking access to the meter.

Complaints. Microbusinesses, and since 19 December 2024 small businesses too, can take an unresolved complaint to the Energy Ombudsman for free. A small business has fewer than 50 employees and a turnover of up to £6.5 million or a balance sheet of up to £5 million, or uses up to 200,000 kWh of electricity or 500,000 kWh of gas a year.

Is there any government help with business energy bills?

There's no general scheme at the moment. The two schemes that cut business energy bills have both ended:

Government support for business energy bills

Two narrower measures exist:

• VAT on electricity. From 1 October 2026 to 31 March 2027, VAT is removed from household electricity in Great Britain. Ofgem says this also applies to some small businesses. The government said small businesses that qualify for the domestic VAT relief and aren't VAT-registered would benefit, as would charities and residential care homes eligible for the reduced rate.
• The British Industrial Competitiveness Scheme. From 2027, it will cut electricity costs by up to £40 per MWh for eligible electricity-intensive manufacturers in the government's growth sectors and in the industries that supply them. The government set an application window of 1 October to 30 November 2026.

If your business can't afford its energy bills, Ofgem points to grants, local council funding and business support helplines, and says to talk to your supplier.

What can your business do about high energy prices?

Without a cap, the checks that matter most are on your own contract and bills:

• Know your contract end date. Starting to look a few months before it ends gives you time to compare business energy prices and give any notice your contract needs, so you don't end up on out-of-contract rates. If you're a microbusiness, your supplier's renewal letter is your cue to start.
• Check the VAT and levy you're charged. If some of your energy is for a qualifying use, for example in a residential care home, HMRC says your supplier should get a VAT declaration from you stating what percentage qualifies for the lower rate. Some uses are also exempt from the Climate Change Levy.
• Read your bills. Check that the meter readings are real rather than estimated, and that the rates match your contract.
• If you can't pay, talk to your supplier straight away. Ofgem says you can ask about a payment plan, a payment break or a reduction, and Business Debtline gives free debt advice to small business owners.