Recent UK business energy statistics show that the energy market is worth a combined £106 million for gas and electricity as of 2024. This is a 72.3% increase from the 2012 value of just over £61 million.
Average business electricity and gas consumption figures also show industries used 7,411 thousand tonnes of oil equivalent in electricity and 7,504 in gas during 2023.
Our research has collated various commercial energy statistics for 2025 to analyse trends, judge how business energy usage has evolved, and find the most energy-intensive industries in the UK.
Top 10 UK business energy statistics
- As of March 2025, the average annual electricity bill for small businesses in the UK is £2,889.37.
- UK small businesses pay, on average, £949.98 a year for their gas bill as of March 2025.
- Around a third (34%) of UK businesses state that new energy-intensive technologies and digitalisation of processes are expected to be the biggest drivers of increased energy usage in 2025.
- Overall, UK business electricity consumption decreased between 2014 and 2023, falling by 7.33%.
- Business electricity unit prices range between 27.3p/kWh in London and 30.8p/kWh in North Wales, Merseyside, and Cheshire in 2024.
- As of 2023, the food and beverage industry is the biggest consumer of gas in the UK, using 1,531 kilotonnes of oil equivalent (ktoe).
- The non-ferrous metals industry is the least gas-intensive as of 2023, using 230 ktoe annually.
- Between 2021 and 2025, weekly wholesale electricity and gas prices were, on average, highest in 2022, peaking at £403 per MWh and £4.55 per therm, respectively.
- In 2024, more than a third (34.91%) of UK business premises held EPC ratings of C.
- More than six in 10 London developers (64%) think they will hit net zero emissions across all commercial buildings in their portfolios between 2031-2040.
UK business energy market statistics
What is the state of the UK business energy market?
In February 2025, Catalyst Digital Energy reported that upward trends were seen in the wholesale price of gas. This has had a clear effect on UK businesses, with new seasonal summer 2025-2027 contracts rising 1.3% in price on the previous month.
The increase in wholesale gas prices and the subsequent increase in the business energy market are largely a result of a cold winter throughout north-west Europe, which depleted gas-storage levels beyond levels not seen since 2022.
Comparatively, wholesale electricity prices decreased by 14.4% from the previous month (January 2025), a result of decreasing dependence on expensive forms of power amid increases in wind generation.
What are businesses' experiences of the UK business energy market?
According to a 2025 report from PwC, nearly nine in 10 (89%) UK businesses used more energy than ever before in 2024, and a further four-fifths (83%) expect to increase their usage even further in 2025.
More than a third (34%) of UK businesses place the blame on energy-intensive technologies and process digitalisation for their increased energy usage and bills (with business growth, transportation and supply change costs, and changing weather conditions also among the top drivers of rising energy consumption).
The rising cost of business energy has a knock-on effect for customers. More than nine in 10 (92%) businesses expect to increase the price of their goods and services in the next year as a result of business energy price volatility.
Just under half (47%) of UK businesses stated they have committed to net zero by 2030 (up from 28% in the 2024 report). However, nearly a third (32%) of businesses state that the high cost of technology and solutions is their greatest barrier to achieving their energy objectives.
“The business energy market is constantly evolving, with prices influenced by various factors, including seasonal impact and shifts in energy generation sources. Recently, businesses have been facing increasing financial pressure as energy consumption continues to rise, driven by digitalisation and the adoption of new, more energy-intensive technologies.
For many UK companies, managing energy costs has become a critical concern. Rising prices can have a direct impact on business operations, leading to difficult decisions about customer-facing pricing strategies.
If your company is looking for ways to reduce costs, you may be considering switching your business energy supplier. To start this process, you must ensure you are acquainted with your current energy contract by looking at the terms of your agreement and your most recent energy bill. Next, you should contact a broker through Uswitchforbusiness, who can review your business’s details and location, and provide you with your current energy provider options.”
What is the average business electricity consumption in the UK?
ONS business energy statistics show there was a decreasing trend in business electricity usage between 2012 and 2023, except for small rebounds in 2016, 2019, and 2021.
What is the average business electricity consumption by year?
According to the latest business energy consumption statistics from the Department for Energy Security and Net Zero (DESNZ), average business electricity usage has decreased overall since 2014. In 2023 (the most recent figures available), businesses used, on average, 7,411 kilotonnes of oil equivalent (ktoe) in electricity – 7.33% less than in 2014 (7,997).
Average business electricity usage between 2014 and 2023
| Year | Electricity consumption in ktoe (kilotonnes of oil equivalent) |
|---|---|
| 2014 | 7,997 |
| 2015 | 7,991 |
| 2016 | 8,024 |
| 2017 | 7,929 |
| 2018 | 7,902 |
| 2019 | 7,941 |
| 2020 | 7,372 |
| 2021 | 7,579 |
| 2022 | 7,477 |
| 2023 | 7,411 |
| (Source: Department for Energy Security and Net Zero) |
Although business electricity consumption has generally decreased since 2014, this trend was broken thrice over the period, in 2016, 2019, and 2021. In each of these years, electricity consumption was slightly higher than the year prior. While the increase in 2016 and 2019 was minimal, the latest increase was nearly 3%:
- 2016: (+0.41% from 2015)
- 2019: (+0.49% from 2018)
- 2021: (+2.81% from 2020)
What is the average business electricity consumption by industry?
UK business energy statistics show that the top named (i.e. the unspecified industries combined come out on top) consumer of business electricity is the chemicals industry, which used 1,206 ktoe in the latest year analysed, 2023.
Average business electricity usage by industry in the UK (2023)
| Industry | Electricity consumption in ktoe (kilotonnes of oil equivalent) |
|---|---|
| Other industries | 1,800 |
| Chemicals | 1,206 |
| Food, beverages, etc. | 938 |
| Paper, printing, etc. | 754 |
| Electrical engineering, etc. | 503 |
| Mechanical engineering, etc. | 463 |
| Non-ferrous metals | 452 |
| Mineral products | 452 |
| Vehicles | 322 |
| Textiles, leather, etc. | 203 |
| Iron and steel | 183 |
| Construction | 135 |
| (Source: Department for Energy Security and Net Zero) |
Behind the chemicals industry by 268ktoe, the food and beverages sector used 938ktoe in electricity in 2023. This figure represents around three-quarters (77.78%) of the chemicals industry’s total consumption.
The construction industry is the least electricity-intensive sector of those analysed, using only just over a tenth (11.19%) of the electricity used by chemicals.
What is the average electricity consumption by business size?
Micro businesses are companies with fewer than 10 employees and a turnover or balance sheet of less than £1.7 million. Because of their small size, they tend to use an average of 10,000 kWh of electricity per year.
Average business electricity usage for micro, small, medium, and large businesses (2023)
Doubling the figure for micro-businesses, small businesses have an average electricity consumption of 20,000 kWh per year – ranging from 15,000 kWh to 25,000 kWh of yearly usage.
UK commercial energy statistics show that medium-sized businesses operate at a much greater energy demand, often requiring larger facilities. Their electricity consumption ranges between 25,000 and 50,000 kWh per annum, with an average of 37,500 kWh – over triple that of the smallest class of businesses.
Large businesses, which often employ 250 or more people, typically use over 55,000 kWh of electricity every year.
UK average business gas consumption statistics
What is the UK average business gas consumption by year?
According to the latest figures from the DESNZ, as with electricity consumption, overall business gas usage has also decreased since 2014. At the start of this period, businesses used, on average, 8,653 ktoe in natural gas, but consumption dropped to 7,504 by 2023. This is a decrease of around a seventh (13.28%), a sharper decline than that seen with business electricity consumption.
Average business gas consumption in the UK between 2014 and 2023
| Year | Natural gas consumption in ktoe (kilotonnes of oil equivalent) |
|---|---|
| 2014 | 8,653 |
| 2015 | 8,418 |
| 2016 | 8,269 |
| 2017 | 8,496 |
| 2018 | 8,972 |
| 2019 | 8,718 |
| 2020 | 8,240 |
| 2021 | 8,201 |
| 2022 | 7,502 |
| 2023 | 7,504 |
| (Source: Department for Energy Security and Net Zero) |
Business gas consumption was at its highest over this period in 2018 when usage reached nearly 9,000ktoe (8,972ktoe). This represented a rise of 5.62% from the year prior (8,496) - almost double the severity of the 2020-21 increase in electricity consumption.
What is the UK average business gas consumption by industry?
The UK industry with the highest gas consumption in 2023 was the food and beverages sector, burning through 1,531 thousand tonnes of oil equivalent annually.
The food and beverages industry consumes around a fifth (22.48%) more than the chemicals industry in second place, UK business energy statistics can reveal. The chemicals industry, which is first for electricity usage but second for natural gas, consumes 1,250ktoe of gas annually. Despite this, the sector uses 3.65% more natural gas than electricity (in kilotonnes of oil equivalent).
Average business gas consumption by industry in the UK (2023)
| Industry | Natural gas consumption in ktoe (kilotonnes of oil equivalent) |
|---|---|
| Food, beverages, etc. | 1,531 |
| Chemicals | 1,250 |
| Mineral products | 1,071 |
| Mechanical engineering, etc. | 750 |
| Other industries | 700 |
| Iron and steel | 443 |
| Construction | 388 |
| Vehicles | 386 |
| Electrical engineering, etc. | 260 |
| Textiles, leather, etc. | 246 |
| Paper, printing, etc. | 243 |
| Non-ferrous metals | 230 |
| (Source: Department for Energy Security and Net Zero) |
There is a sharp jump in natural gas usage across the different industries analysed. Seven sectors use between 230 and 443ktoe, but the next most gas-intensive sector (other industries) uses 700ktoe, a jump of almost three-fifths (58.01%) by comparison.
The non-ferrous metals industry uses the least natural gas of all industries analysed. Businesses in this sector use 230ktoe of natural gas a year, which represents less than a sixth (15.02%) of the food and beverage industry’s total usage.
What is the UK average gas consumption by business size?
The average business gas consumption for micro businesses is the same as electricity, with a low usage of 5,000 kWh per year to as much as 15,000 kWh.
Average business gas usage for micro, small, medium, and large businesses in the UK (2023)
UK business gas usage tends to be slightly higher for the three other business sizes. Small business energy can be anywhere between 15,000 and 30,000 kWh – an increase of 2,500 kWh when compared to average electricity usage across businesses.
Large business energy statistics show that these bigger companies will often use 10,000 kWh more in gas than they will in electricity throughout the UK.
Which are the most energy-intensive industries?
Research by Bionic analysed the UK industries that used the most business energy – electricity and gas combined – in 2023.
Which industries use the most business energy?
According to UK business energy statistics in 2023, the commercial and miscellaneous services sector is the most energy-intensive industry, consuming 169,972,450 MWh of power annually. This is more than double the next highest industry of public administration at 64,883,770 MWh per year.
The most energy-intensive industries in the UK by combined annual usage (2023)
Outside of public administration, every other industry consumes less than half that of commercial enterprises. Manufacturing and industrial services had a combined energy usage of over 42 million MWh yearly, still dwarfing sectors like agriculture, which required around 17.5 million MWh.
Iron, steel, and metal manufacturing was the least energy-intensive industry in the UK in 2023, with a combined annual usage of 17,410,110 MWh. This was over nine times, or 162.8%, less than the usage of commercial and miscellaneous services.
What is the average business electricity bill in the UK?
Average business electricity bills can be anywhere from £241 to £1,663 a month, depending on the size of the premises, number of employees, and location.
What is the UK average business electricity cost by business size?
The average cost of electricity per month for a UK small business works out to be £240.78, amounting to £2,889.37 a year. This is more than triple the amount of the average bill of a micro business at £71.31 a year month (or £855.68 a year).
Average cost of electricity for a micro, small, medium, and large business (March 2025)
Medium and large UK businesses can expect to pay over £5,000 and £10,000, respectively, for electricity each year. This represents a difference of more than four-fifths (87.51%) between the two, with large businesses (£10,388.64) paying an average of £4,848.18 more than medium businesses (£5,540.46) annually.
Are you paying more than you should for your business electricity? Compare electricity deals now.
What is the UK average business electricity cost by region?
The UK region with the lowest average annual electricity cost is London at £7,027. This contrasts with the highest cost regions – North Wales, Merseyside, and Cheshire – where businesses pay £8,053 per year on average, 13.6% more than London.
Average annual business electricity cost, unit price, and daily standing charge by region
The South East (£7,271) and East regions (£7,177) mirror the lower costs seen in London. Whereas businesses in Scottish zones, like Central and Southern (£7,712) or North Scotland (£7,707), pay over £436 more each year by comparison.
The average business electricity cost per kWh varies throughout the UK. Unit prices typically range between 27-29 p/kWh, with the highest (30.8p/kWh) seen in North Wales, Merseyside, and Cheshire.
There are noticeable differences in the average standing charge for business electricity across the UK. From a low of 55.3p/kWh in London up to 97.2p/kWh in North Wales, Merseyside, and Cheshire – a difference of almost 55%.
What is the average business gas bill in the UK?
UK business energy statistics reveal that the average cost of business gas can range from £30 to £473 a month. Factors that can affect the cost of gas for businesses include the size of the building, the type of industry, and the number of employees.
What is the UK average business gas cost by business size?
The average gas bill for a small business in the UK is just over £79 a month. However, medium businesses could pay nearly double that at almost £143 monthly.
Average cost of business gas for a micro, small, medium and large business (March 2025)
Very large businesses can expect to pay over 15 times more on their gas bill than micro-businesses, at £5,674.29 and £356.10, respectively. Even the annual business gas bills of small businesses (£949.98) are just under triple that of micro-companies.
Medium businesses (£1715.26) pay more than two-fifths (44%) less than large businesses (£3,077.90), on average, when it comes to yearly gas bills.
Compare gas deals today to find out if you’re getting the best price for your business.
What is the UK average business gas cost by region?
The most expensive UK region for commercial gas is the South West, with businesses paying £2,720 annually on average. This compares to the lowest average cost in the West Midlands, at £2,564 per year – a 6% gap between the highest and lowest regions.
UK average annual business gas cost, unit price, and daily standing charge by region
Like business electricity, the average standing charge for business gas can vary throughout the UK. They range from 27.8p/kWh in Yorkshire up to 99.7p/kWh in the most expensive South West territory. This represents a 112.8% difference.
The average business gas cost per kWh is between 9.1 and 9.4 throughout the UK, with the cheapest being in the East of England (9.1p/kWh).
Are business energy prices going up?
The cost of wholesale energy to suppliers will determine how much customers will pay. If wholesale prices go up, then business energy bills will also increase.
Changes in business energy wholesale prices between 2021 and 2025
As of January 2025, wholesale electricity cost £90.21 per Megawatt-hour per week, more than two-thirds (67.24%) higher than four years prior, when the average cost stood at £36.24.
UK wholesale electricity price trends between 2021 and 2025
Between 2021-25, wholesale electricity was at its most expensive in October 2022, when electricity cost just over £403 per megawatt-hour per week. In fact, the top 10 months for wholesale electricity prices during this period were all recorded in 2022.
In November 2022, the average weekly cost of wholesale electricity began to trend downward. The pound-per-megawatt-hour has remained fairly low since December 2023. Though the cost has fluctuated to a degree, the price has not yet risen above £90 per megawatt-hour per week as of Q1 2025.
UK wholesale gas price trends between 2021 and 2025
As of January 2025, wholesale gas costs, on average, £1.15 per therm per week - more than double (141.42%) compared to four years earlier (47.64 pence).
Between 2021 and 2025, wholesale gas prices reached their peak in August 2022, when gas cost almost £4.55 per therm per week. This is around 10 times higher (an immense 854.09%) than February 2021 figures, when wholesale gas was at its cheapest (47.64 pence).
As with wholesale electricity, gas prices also trended higher throughout most of 2022 before dropping in September of that year and continuing downward. Since April 2023, the weekly average cost of gas has fluctuated but remained between 72 pence and £1.33 per therm per week.
Different UK business energy contract types
There is a range of business energy contract types out there, each with different conditions and rates.
Fixed
A fixed business electricity tariff allows you to pre-agree on electricity rates with your supplier for the duration of the contract. These rates tend to be competitive, but you should compare rates from other suppliers before signing anything to ensure you get the best deal.
Variable
With a variable rate electricity tariff, the rate you pay per kilowatt-hour (kWh) fluctuates based on market conditions. This means the rate per kWh that you are charged can go up or down at any time throughout your contract, depending on factors like wholesale energy costs.
Rolling
Some suppliers use rolling contracts, which automatically renew for another year at higher rates when your initial contract ends. You may be able to negotiate a new long-term contract at lower rates through a blend-and-extend deal. However, these new rates are usually not as low as those available from other suppliers. It's important to understand the terms of any contract and mark end dates in your calendar. Rolling contracts are less common now but still a possibility.
Deemed rate
Deemed rates are similar to out-of-contract rates but are applied when a business moves into new premises without choosing a new electricity contract. Like out-of-contract rates, deemed rates are typically higher than fixed tariffs. However, you can still switch by giving 28 days' notice.
Out-of-contract rate
If you let a fixed contract expire without arranging a new one, your supplier will move you to its out-of-contract rates. These are usually more expensive than fixed tariff rates, but you can switch suppliers at any time by providing 28 days' notice.
How business energy contracts differ from domestic energy contracts
Although the energy could come from the same suppliers and sources, there are key differences between domestic energy and business energy contracts. These include:
- They’re usually longer. Business energy contracts can last between one and five years. There is usually a switching window near the expiration date when you can leave the contract.
- They don’t usually have a cooling period. Domestic energy contracts typically have a 14-day cooling-off period where you can cancel the contract if you change your mind or find a better deal. While most business energy contracts don’t offer this, it's still worth asking about flexibility before signing.
- The energy sources won’t be combined. Business energy providers tend to offer separate contracts for electricity and gas, so it can be beneficial to get quotes from different suppliers (and pay separate bills for each).
- Some include broker fees. If you choose to use a business energy broker to help find suppliers, the costs may be bundled into the overall rates you pay. Before agreeing to contract terms with a broker, clarify their fee structure in writing to fully understand the deal’s pricing.
UK average commercial EPC rating statistics
A commercial Energy Performance Certificate (EPC) is necessary for most business premises, and it assesses the energy efficiency of non-domestic buildings. The ratings range from A+ to G, where A+ represents the highest efficiency, and G indicates the least energy efficiency.
What EPC rating do most business premises have in the UK?
The typical EPC rating for non-domestic buildings was the C rating in 2024. In the final quarter of 2024, of the 23,918 buildings rated, 8,350 were classed as C – this is equal to more than a third (34.91%).
Number of businesses with each EPC rating in 2024
| Year | A+ | A | B | C | D | E | F | G |
|---|---|---|---|---|---|---|---|---|
| Q1 2024 | 99 | 1,785 | 8,915 | 9,348 | 4,675 | 2,162 | 129 | 198 |
| Q2 2024 | 118 | 1,722 | 8,685 | 9,070 | 4,401 | 1,897 | 173 | 156 |
| Q3 2024 | 150 | 2,062 | 8,356 | 8,880 | 4,373 | 1,846 | 172 | 135 |
| Q4 2024 | 211 | 1,908 | 7,627 | 8,350 | 3,765 | 1,725 | 155 | 177 |
| (Source: GOV.UK) |
However, the number of C-rated buildings dropped by nearly 1,000 (998) from the first to the last quarters of 2024. This represents a decline of over a tenth (10.68%).
Top-level A+ ratings are the least common EPC ratings throughout the UK. At the start of the year, only 99 buildings held this rating (Q1 2024), which is nearly a quarter (23.26%) fewer than the next least common rating of F in the same period (129). However, by the end of the year (Q4 2024), there were 211 business properties with an A+ rating, an increase of more than double (113.13%) from the beginning of the year and over a third (36.13%) more than those rated F.
The lowest EPC ratings of F and G stayed consistently low throughout 2023, never rising above 200 each. This low number could be due to the tightening of the Minimum Energy Efficiency Standard (MEES) Regulations. Starting from 1 April 2023, it became against the law to continue renting any commercial property with an EPC rating of F or G (for leases granted before 1 April 2018) without a permitted exemption.
What are the UK business EPC exemptions?
An EPC is not necessary if the building falls into any of the following categories:
- A detached building with a total floor space of under 50 square metres.
- A temporary building with two years or less of intended use.
- Listed or officially protected and meeting the minimum energy performance requirements would unacceptably alter it.
- Used as a place of worship or for other religious activities.
- Scheduled for demolition by the seller or landlord, with all the required planning and conservation consents in place.
- An industrial site, workshop, or non-residential agricultural building with low energy usage.
What commercial EPC penalties are there in England and Wales?
If a landlord opts to rent out the property without an EPC meeting the necessary requirements, and it does not fall under the above exemptions, they risk facing penalties. These penalties could involve fines and public exposure for failing to comply with MEES regulations.
For commercial properties in breach for under three months, the financial penalty is £5,000, or 10% of the property's rateable value (maximum of £50,000), whichever is higher. If they’re in breach for over three months, the penalty is £10,000, or 20% of the rateable value (maximum of £150,000).
When do developers believe they will achieve net zero across their portfolio of commercial buildings?
A 2023 survey by Deloitte shows that almost two-thirds of developers (64%) believe they’ll achieve net zero emissions across all their commercial buildings between 2031 and 2040.
When London commercial developers anticipate that they will achieve operational net zero across their portfolio
Over a quarter (27%) of commercial developers in London anticipate they’ll be able to reach the goal of net zero sooner than 2031. Fewer than one in 10 (9%) expect it’ll take until 2041-50 before their whole portfolio of commercial buildings achieves net zero targets.
The greatest difficulties for London commercial developers in achieving operational net zero across their portfolio
The most significant barrier reported in achieving net zero targets by London developers is the high cost of constructing net zero buildings, with an average difficulty score of 3.9 out of five – 0.3 higher than the second-most difficult barrier.
The issue of accessing sustainable supply chains and building materials was rated at 3.6 average difficulty. Commercial developers in this survey also scored the challenge of decarbonising current buildings in their portfolios at a 3.6 as well.
The cost of renewable business energy in the UK
Renewable business energy statistics from Bionic show that the cheapest option for businesses looking to use renewable energy is to install small-scale wind turbines starting from £2,000. However, the time this equipment takes to make the money back is up to 15 years. Larger commercial turbines have a higher initial cost at £3.3 million, but recoup the investment faster within just one to five years.
Average costs for UK businesses switching to renewable energy and the payback period
| Type of renewable energy | Cost | How long it takes to make the money back |
|---|---|---|
| Wind power | Small turbines - £2,000 to £6,000 Large turbines - <£3.3 million | Small turbines - three to 15 years Large turbines - one to five years |
| Solar PV panels | Small systems - £6,000 to £11,000 Large systems - <£70,000 | Six to 11 years |
| Solar thermal energy | £3,000 to £5,000 | Five years |
| Biomass systems | Varies depending on boiler size and type of fuel | Five to 12 years |
| Anaerobic digestion | £8,750 per kWth | N/A |
| Geothermal and ground source heat pumps | £11,000 to £15,000 | 15 years |
| Combined heat and power | £32,500 | 10.5 years |
| Hydroelectric power | £4,000-£8,000 per kW of capacity installed. | Seven years (based on an 8kW hydroelectric power plant) |
| (Source: Bionic) |
Solar PV panel setups mirror the trend of a large cost range depending on scale. Small business PV installations cost £6,000 to £11,000 and take six to 11 years to pay off through electricity bill savings. But larger utility-sized solar arrays can surpass £70,000, yet recover costs quicker thanks to high output – within five years or less.
Solar energy is a popular choice for UK businesses and residential properties, with renewable energy statistics showing that it made up 11% of the UK’s renewable energy production in 2023.
Other solutions like solar thermal (£3,000-£5,000) and hydroelectric power (£4,000-£8,000 per kW) offer reasonable small business installation costs with average payback periods of around five to seven years.
Are you interested in renewable energy for your business? Compare green energy deals now.
Business energy FAQs
How much is business electricity per kWh?
The price of business electricity can vary depending on where a business is located, but the average price throughout the UK is 28.6 pence per kWh in 2024.
What is the business energy cap?
Unlike domestic energy, there is no price cap for business energy. This is because the variation in energy usage among businesses makes implementing a cap on business energy rates challenging.
What is the VAT rate on business electricity bills?
VAT on business energy bills is applied at a rate of 20%. However, there are exceptions, allowing for a reduced rate of 5% VAT. These include:
Charitable organisations engaged in non-business activities
Any businesses that record a low usage – under 33-kilowatt hours per day or 1,000 kilowatt hours per month.
How can I reduce energy consumption in a business?
There are several ways, either free or requiring initial payment, that can help to reduce business energy consumption. These include:
Only use what you need – turn off lights in rooms no one is working in, turn off machines or appliances when they are not in use, and only use air conditioning or heating when employees are in the building.
Replace old boilers or fitting the premises with double glazing.
Update office equipment to energy-efficient devices.
Run a business energy comparison to see if you can find a better price for your gas and electricity.
Why is business energy so expensive?
One reason business energy is expensive, at least more expensive than domestic energy, is the absence of price caps. This means there isn’t a maximum amount energy providers can charge businesses for their gas and electricity.
As well as this, businesses pay 20% VAT for energy, whereas domestic dwellings pay 5%.
How much does electricity cost for a small business?
The average electricity cost for a small business in the UK is around £2,890 a year. However, this can be more or less depending on factors such as building size, type of industry, and location.
What’s a standing charge?
A standing charge is a fixed daily fee that you pay as part of your energy bill, regardless of how much energy you use. This fee applies to both electricity and gas, and helps to cover the cost of maintaining the network and providing energy services.
What is a business energy audit, and how do you do one?
A business energy audit is a comprehensive report of a business’s energy usage, including how much energy is used and where. Completing an audit can help businesses identify where energy is being wasted to reduce bills.
Micro-businesses and small businesses may be able to complete an energy audit themselves using an energy-saving power meter, but it may be best to ask your provider to complete a professional audit on your business’s behalf.
How to switch energy suppliers for a small business?
Commercial energy contracts stipulate that you can only switch suppliers once your contract enters its renewal window - typically around six months before your current deal is set to expire.
At this point, your current supplier should inform you of your renewal offer. However, these are not always the best deal, so it’s best to compare your tariff options using Uswitchforbusiness.
Learn more about the Energy Bills Discount Scheme and find out how much your business could save.
Business energy glossary
Energy Performance Certificate (EPC)
An EPC provides information on the energy efficiency of a property in the UK and is required when buildings are constructed, sold, or rented out.
Kilowatt-hour (kWh)
A unit of energy representing 1,000 watts of power sustained for one hour.
Kilotonnes of oil equivalent (ktoe)
A standardised unit of measurement representing the approximate amount of energy (be that electricity or natural gas) equivalent to 1,000 tonnes of oil.
Large business
A business with over 250 employees and a balance sheet of more than £43 million.
Medium business
A business with 50-250 employees and a balance sheet of less than £43 million.
Megawatt hour (MWh)
A unit of energy representing 1,000,000 watts of power sustained for one hour. Used to measure large amounts of electricity usage.
Micro business
A very small business, typically with fewer than 10 employees and a balance sheet of less than £1.7 million.
Small business
A business with fewer than 50 employees and a balance sheet of less than £8.5 million.
Sources and methodology
https://www.catalyst-commercial.co.uk/works/mar25-energy-market-brief/
https://www.gov.uk/government/statistics/energy-consumption-in-the-uk-2024
https://bionic.co.uk/business-energy/guides/average-energy-usage-for-businesses/
https://britishbusinessenergy.co.uk/business-electricity/
https://britishbusinessenergy.co.uk/business-gas/
https://bionic.co.uk/business-energy/guides/whats-going-on-with-energy-prices/
https://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators
https://www.deloitte.com/uk/en/Industries/real-estate/content/crane-survey-winter-2023.html
https://bionic.co.uk/business-energy/guides/guide-to-renewable-energy-for-small-businesses/
https://www.gov.uk/energy-performance-certificate-commercial-property
https://www.sefe-energy.co.uk/help-support/bills-payments/vat/
