Business energy standing charges: what they are and how to compare them

What is a standing charge?

Your energy bill is made up of two main prices.

• The unit rate, in pence per kWh, which you pay for each unit of energy you use.
• The standing charge, usually in pence per day, which you pay every day, whether or not you use any energy.

Each supply has its own standing charge, so if your premises have both an electricity meter and a gas meter, you pay two. A business with several sites or meters pays one for each of them.

Business energy isn't covered by the energy price cap, so suppliers set their own standing charges, and they vary between suppliers, regions, meter types and contracts.

What it pays for

The standing charge covers costs that don't depend on how much energy you use, such as:

• building, running and maintaining the electricity and gas networks;
• your meter and its readings;
• your supplier's cost of running your account.

Suppliers can recover some of these costs through the unit rate instead. Each supplier decides for itself how to split them, which is one reason two quotes can look so different.

Why have business electricity standing charges gone up?

The main reason is a change in how network costs are charged in Great Britain, which pushed standing charges up and brought the network part of unit rates down. Under Ofgem's Targeted Charging Review, the residual part of network charges moved out of the unit rate and into a fixed daily charge for each site. That happened for the local distribution networks from April 2022, and for the national transmission network from April 2023. For transmission, the National Energy System Operator (NESO) says the residual makes up about 98% of what it collects from demand.

The size of that fixed charge depends on which band your site is in:

• Larger sites, usually with half-hourly meters that record your use every 30 minutes, are banded by the voltage they're connected at and their capacity.
• Smaller sites are banded by how much electricity they use.

The bands were reset in April 2026, and fixed transmission charges went up for most businesses at the same time. That means your standing charge may have changed if you've renewed since then, even if your use didn't.

Network charges in Northern Ireland are set separately, so this section only covers Great Britain.

Is there an average business standing charge?

There's no official average. Business energy isn't covered by the price cap, and Ofgem says suppliers can split their costs between unit rates and standing charges as they see fit, so standing charges vary a lot between suppliers and contracts. In 2023, Ofgem said business standing charges ranged from around £1 a day for smaller sites to over £1,000 a day for the very largest. Government figures for what businesses pay on average combine the standing charge and unit rate into one price per kWh, which is how our business energy prices page shows them.

What you can see is one of the fixed network charges your supplier pays for your site. For the national transmission network, every site in the same band pays the same daily charge, set by the National Energy System Operator (NESO). For smaller sites without an agreed capacity, which usually means those without a half-hourly meter, the band depends on how much electricity the site uses in a year:

Larger sites with an agreed capacity are banded by that capacity in kVA instead, and sites connected directly to the transmission network by how much they use. Their daily transmission charges in 2026/27 range from £5.80 for the smallest low-voltage band to over £20,000 for the largest transmission-connected sites.

On top of this, your local network operator charges a fixed daily amount for its distribution network, which depends on your region and band, and your supplier adds its own costs. In four regions, it's zero for some or all business bands in 2026/27. How much of all this appears in your standing charge is up to your supplier: Ofgem notes that network charges may be passed on as standing charges, but that it isn't guaranteed. The current bands took effect in April 2026, and each site's band is based on its use or capacity between May 2022 and April 2024. National Grid Electricity Distribution says the next review is due in 2028, with changes from April 2030. NESO says its transmission band thresholds won't be reset until 2031.

Other fixed charges on larger sites

If your site has a half-hourly meter, usually because it uses a lot of electricity, your bill may show other fixed charges on separate lines, such as:

• an availability or capacity charge, based on the capacity agreed for your connection, in kVA;
• metering and data charges.

As with the standing charge, you pay these however much you use. If you think your agreed capacity is more than you need, it's worth asking your supplier or broker about it.

Is a low or no standing charge tariff cheaper?

Some suppliers have offered business tariffs with a low standing charge, or none at all. The costs don't disappear, though, because they're added to the unit rate instead. Whether that works out for you depends on how much energy you use.

Few suppliers offer tariffs with no standing charge. EDF says they often come with higher unit rates and aren't widely available. TotalEnergies has offered one to new and renewing business customers since 3 February 2026, for non-half-hourly electricity meters and for gas supplies up to 500,000 kWh.

Does a low standing charge suit you?

How to compare quotes

Rather than comparing one price at a time, work out the yearly cost of each quote:

• Use the same figure for your yearly use in every quote, taken from your bills.
• If a quote has day and night rates, work out each part separately with the kWh you use in that period.
• If a quote shows the standing charge per month or per year, convert it to a daily figure first.
• Remember to include any other fixed charges, such as a capacity charge.

Our energy cost calculator does the sum for you.

The quote with the lowest total is the cheapest on price, whatever its standing charge, but it's still worth checking the contract terms.

See what businesses pay on average

VAT is charged on the standing charge too, at the same rate as the rest of your bill. The Climate Change Levy is different: it's charged only on the energy you use, so it isn't part of the standing charge.

Can your standing charge change during a contract?

On a fixed contract, Ofgem says your unit rates and standing charges are fixed for the length of the contract. Pass-through and flexible contracts work differently: network and other non-energy costs can be passed on to you as they change, so your standing charge can go up during the term. Check which kind you're being offered before you agree.

If you're on a variable contract, your prices can go up or down at any time.

Deemed and out-of-contract rates

Deemed and out-of-contract rates are usually higher than contract rates, and that can include the standing charge as well. If your contract has ended, or you've moved into premises without agreeing one, it's worth getting onto a contract soon.

If your premises are empty or closed

As long as the supply is in your name, you keep paying the standing charge, even if you use no energy at all. If you're leaving the premises for good, tell your supplier, give a final meter reading and check what your contract says about moving out. Our guide to moving premises covers what to do on your last day. A tariff with a lower standing charge may suit you better if you close for part of every year.

Check the standing charge on your bill

Your bill should show the standing charge on its own line, usually as a daily rate multiplied by the number of days in the billing period. It's worth checking that:

• the daily rate matches your contract;
• the number of days matches the billing period;
• you're not paying for a meter you no longer have, or twice for the same supply.