Compare Business Electricity Prices

Compare Business Electricity Prices To Your Renewal Quote  

Are you tempted to accept that renewal quote that’s just dropped in your mailbox? Long gone are the days when it’s easier to pay more and let your contract roll over. Bringing forward-thinking tech to our customers, allows us to serve those that are too busy to take care of their electricity switch within ‘normal’ 9 to 5 hours. The ability to switch business electricity suppliers entirely online allows you to take care of admin any time, even if you like to burn the midnight oil.  

With renewal quotes often being priced higher than the market rate, why pay more for a couple of minutes of admin? We may even be able to negotiate better business electricity rates with your current supplier so you only need to be transferred onto a new tariff.

Why Compare Business Electricity Prices? 

Despite rising business electricity prices, many company owners are fixing their rates as the future remains uncertain. As prices have been high the last few years, it could be the case that we’re seeing a new ‘normal’ pricing level for business electricity. Nobody knows for sure, but many SMEs would like the security of a fixed prices. 

Businesses may also want to switch suppliers in search of better customer service. There are more choices for businesses and tariff prices can vary greatly depending on the size of your business and how you use electricity.

At Power Compare, we can help you find the right business electricity tariffs without the hassle. Our experts are on hand to offer advice on the best tariff types for your business. We’ll also handle the entire switching process on your behalf once you’ve chosen the right deal for you.

To get your switch started, compare business electricity prices now.

Are Business Electricity Rates Still Rising?

No – the numbers we’ve got to hand show that energy prices have been falling consistently each month for quite some time.

After looking at the three most affordable electricity tariffs for each month, there’s a clear downward line with the average cheapest price falling, from almost 80p per kWh to 28.03p.

That works out at a reduction of 65%, a 51.7p per kWh unit decrease and an annual saving of almost £13,000 for a business using 25,000 kWh of electricity a year. Check out the numbers below…

Small Business vs Micro Business Electricity Rates

According to Ofgem, a non-domestic consumer is defined as a micro business if they meet one of the following criteria:

• employs fewer than 10 employees (or their full-time equivalent) and has an annual turnover or balance sheet no greater than €2 million, or
• uses no more than 100,000 kWh of electricity per year; or
• uses no more than 293,000 kWh of gas per year.

The main benefit of being defined as a micro business rather than a small business is that you can give a termination notice at any time during your contract which means you can always shop for the best deal.

Unit Price vs Standing Charge

The overall cost of a business electricity tariff is made up of unit prices and standing charges. It’s important to understand the difference when comparing suppliers.

Unit Price: This is how much you pay for the electricity you use. It is charged in terms of pence per kWh. It is a variable charge, so the more you use, the more you pay. To get an idea of how much you should be paying, please see the tables at the top of this article.

Standing Charge: The standing charge is a fixed cost. Normally it’s charged as a fixed price per day (although sometimes per month or quarter). The difference with the unit price is that you pay the same amount regardless of how much or little electricity you use.

And unlike unit prices, standing charges vary widely from supplier to supplier sometimes as low as 20p per day all the way up to £22+ per day.

Generally speaking, most business electricity price comparisons should focus on the unit price rather than the standing charge as this will determine the bulk of what you’ll pay. However, if you do see an abnormally low unit rate it’s worth your while to double-check the standing charge.

What Are Deemed & Out-of-Contract Tariffs? 

Unlike domestic electricity, there are no price caps on business electricity customers. This makes it crucial to have a business electricity contract in place at all times. Normally, the supplier will just roll you over onto a new contract when your old one ends, unless you take action.

Deemed rates: are what businesses taking over new premises will pay until they enter into an electricity supply contract. The amount is paid to the existing energy supplier of the premises until a contract can be arranged with them or another supplier.

The prices are very high but are never meant to be paid for long. Just be aware the deemed unit prices can easily be 150% more than in-contract rates, so there’s a big incentive to switch quickly.

Out-of-contract rates: The amount charged is usually very similar to deemed rates but usually arises when a contract ends and a new contract has not been put in place. The problem with out-of-contract rates is that you may not realise you’re on them unless you’re checking your bill regularly.

Once again if you find yourself paying out-of-contract rates, you should either contact your supplier to be placed under contract or better yet compare prices to get a much better deal. You can sometimes save up to 60% off the rates you’re paying.

 

Business Electricity Comparison With Fixed vs Variable Tariffs

There are two main types of business electricity tariff available. Some suppliers offer more complex blended contracts, but all of them will basically consist of either fixed or variable elements.

Here are the key things you need to know about both types:

Each contract has its benefits and is down to the individual circumstances of the business. Most businesses will choose a fixed contract when they switch business electricity as it tends to be much easier to manage in terms of expected cash flow.

Larger businesses can sometimes save money using variable rate contracts if they can manage their energy usage throughout the day, but this takes quite a bit of effort and should only really be considered if your business has a Half-Hourly meter installed.

 

What Charges Are Included In Your Business Electricity Bill?: VAT, CCL, DUoS & TNUoS Charges

As you can see above, besides the wholesale price of electricity you also face a whole range of other costs here are a few of them explained:

• VAT: Most businesses will pay the standard VAT rate of 20% for their commercial electricity. However, if at least 60% of your business’ energy is used for domestic purposes, you are a charity or non-profit, and/or you use less than 33kWh of electricity per day (1,000kWh per month) you may be able to pay only 5%.
• CCL: From 1 April 2019 the Climate Change Levy is 0.847 p/kWh for electricity. Although if you generate electricity via renewable sources you may be able to a CCL Exemption.
• DUoS: Distribution Use of System charge covers the cost of maintaining the local electricity distribution network infrastructure including the cables, substations, poles, and transformers. It varies based on usage and should be clearly shown on your bill.
• TNUoS: The Transmission Network Use of System charge pays for the cost of maintaining the electricity transmission network in England, Wales, Scotland, and offshore and prices are based on usage and time of year.

How to Get Cheaper Business Electricity Rates

Getting the lowest tariff on business electricity is not the easiest thing in the world but the following 10 tips can hopefully help:

1. Using a comparison service to view the latest business electricity rates is the quickest and easiest way to find great deals.
2. Know how much electricity you use each year as this makes comparisons easier and may make it easier to negotiate a discount.
3. Have your MPAN (Meter Point Administration Number) ready as this can also help you make a better comparison.
4. Consider how you pay your bill. Some electricity suppliers will offer up to a discount if you pay by monthly direct debit.
5. Check your company credit rating. Bad credit can mean you’ll pay more for your business energy.
6. Look into when you use your electricity. For example, if you run a late-night business you may be able to benefit from off-peak rates for your electricity.
7. Look into installing renewable energy options such as solar panels or wind turbines. While not an option for many businesses, you may be able to benefit from various government schemes. Moreover, you may be able to offset future price increases.
8. If you have multiple business locations you may be able to negotiate a lower unit price by buying in bulk.
9. Look at ways to lower your overall electricity usage such as using LED light bulbs or more energy-efficient appliances. This can significantly reduce your total bills going forward.

Energy suppliers don’t offer dual fuel contracts or discounts as they do for domestic customers. This means you may find it cheaper to buy your electricity and gas from separate suppliers.

To get your switch started, you can compare business electricity rates with Power Compare.

Business Electricity Rates by UK Region

The table below is a breakdown of average business electricity rates by region as a guide. This is based on 25,000 kWh of usage and a 2-year contract in December 2023.

As you can see even deemed rates can vary by up to 30% within a supplier depending on the region. Once again this shows the importance of making a comparison. It only takes minutes to compare business electricity prices and it could be the difference in saving hundreds of pounds each year.

How To Identify Your Business Electricity Meter

Business Electricity FAQs