Are Small Business Gas Prices Higher?
What is considered a small business by many is viewed differently by gas suppliers. Split into two categories, small businesses and micro. Micro business gas prices are seen as similar to the domestic market so prices are often similar to the domestic market.
Typically, larger businesses will use larger amounts of gas so will be able to negotiate a lower price per kWh.
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 (£1.7 million as of August 2022), 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. Typically, it is much easier to manage your business gas usage if you’re a micro business but you do pay higher gas rates. This is because they usually have similar flexibility to domestic contracts.