Business Energy Tariff Types Explained

Switch and save on your business energy! Get a quote today.

Our business energy experts make it easy for you to save on your gas and electricity needs. Switch with us and save an average of £1,027* per year on your business energy bills.

Compare prices

Our Trustpilot score

Excellent 9/10

  • Banner star
  • Banner star
  • Banner star
  • Banner star
  • Banner star

Read reviews

*At least 10% of businesses who switched energy supplier for both gas & electricity with us between August 2017 and August 2018 saved £1,027 or more.

Unlike standard domestic gas and electricity tariffs that place you in a bracket that best suits your usage, business plans are tailored to your exact needs.

Although this level of accuracy is a bonus for your business, it’s still tough for you to put a finger on the exact cost of your business gas and electricity tariff.

How much should you pay for business energy?

What makes forecasting your usage and cost so hard is that even if you’re basing your business against a similar sized company, there are so many other variables that impact costs. Employee numbers and postcodes are two things that vary hugely across industries and will affect how much energy will cost. No two businesses are exactly the same.

Regional variations can account for as much as a 20% in price difference, even across similar markets, with businesses in rural areas typically paying more for energy than their city-based counterparts.

But to give you an idea how much energy your business should be using and the relative cost, see below the average electricity and business gas consumption rates and prices:

Average business electricity prices and usage*

Business size Average annual usage (kWh) Average price (per kWh) Standing charge (daily) Average annual price
Microbusiness 5,000 - 15,000 13p - 13.5p 26p - 30p £650 - £1,800
Small business 15,000 - 30,000 11.8p - 13p 24p - 26p £1,900 - £2,900
Medium business 30,000 - 50,000 11.3p - 11.8p 21p - 23p £3,300 - £5,000

*Figures are based on industry averages and are only intended as a guide. There are a number of other factors that can impact the amount that you pay for your business electricity including consumption habits and the location of your business premises.

Average business gas prices and usage**

Business size Average annual usage (kWh) Average price (per kWh) Standing charge (daily) Average annual price
Microbusiness 5,000 - 15,000 4.1p - 4.5p 23p - 26p £300 - £700
Small business 15,000 - 30,000 3.8p - 4p 21p - 22p £800 - £1,400
Medium business 30,000 - 50,000 3.5p - 3.7p 18p - 20p £1,500 - £2,000

**Figures are based on industry averages and are only intended as a guide. There are a number of other factors that can impact the amount that you pay for your business gas including consumption habits and the location of your business premises.

What business gas and electricity tariffs are available?

Each business has a different needs, and to match this suppliers have different tariffs to try and meet these demands. In general, there are five types of main contract available for businesses. These are:

  • Fixed term contract - Fixed term allows you to secure a certain cost per unit (kWh) that you always pay for your energy. It’s worth noting that this doesn’t fix the cost of your bill. The variable of how much you use will increase or decrease your cost.
  • Variable-rate contract - Your unit rates are linked to market activity, meaning they can increase and decrease throughout the duration of your contract. There’s an element of risk with this tariff.
  • Deemed rate contract – This is also commonly known as an out-of-contract tariff. It’s a rolling contract with expensive rates that are arranged by suppliers for customers with no formally agreed contract. This isn’t a good deal.
  • 28-day contract - A contract for businesses who haven’t switched since the energy market deregulation came into effect.
  • Rollover contract – A rollover contract is used when no alternative has been agreed before your current contract’s end date. You will automatically be signed up for another year, and rates are usually among the supplier’s most expensive. This is a place you don’t want to be.

It doesn’t matter what the size of your business is, you always want to be on a fixed rate contract. There’s less risk and it’s easier to calculate your usage across the contract length this way.

If you’re currently on a deal that doesn’t suit your business, why not have a chat with us? We compare energy tariffs in the UK to help businesses and domestic customers save money on their energy bill. Catch our experts on 0800 326 5517.

What happens when your business energy contract ends?

When your energy contract ends, you’ll be pushed onto your suppliers more expensive standard tariff. This plan, as explained earlier, is what you want to stay away from. This eventuality comes from a lack of action on your behalf because you’ve not cancelled your old plan. Cancelling your initial contract and renegotiating the deal elsewhere is how you get a better price for your business.

Our business tariff experts are always on hand to explain, help and compare deals on your behalf, and what’s better - it’s completely free of charge. We take a fee at the end of the process from the supplier, so you save money, time and effort by letting us take the stress away from you. For more information, give out experts a call.

Found this page interesting?

Help spread the word and share this page with your friends and family on your social networks.

Logo small

© UKPower.co.uk Limited 2001 - 2018

Cookies help us deliver our services. By using our services, you agree to our use of cookies. Learn more