Business energy

Q: What’s the difference between domestic and business energy?

There's no price cap on business energy – domestic energy unit rates and standing charges are capped; business energy rates aren’t. It's important to compare quotes and fix your business energy rates to avoid price volatility. You can usually only switch business energy tariffs in the switching window – unlike domestic energy tariffs which you can switch at any time (subject to any exit fees). However, if you’re on a deemed or out-of-contract rate, you should be able to switch any time. The market works differently – domestic energy customers can pick from energy tariffs available across the market. For business energy, you'll need to get a bespoke quote from suppliers depending on the size, type and location of your business.

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Why switch business energy suppliers?

Even small price differences can add up on your gas and electricity bills over the year. Here's why it might be worth looking for a new deal:

Cut your energy bill

Business energy prices aren't capped and can change regularly. Comparing deals can help you lower your bills and stay on an affordable tariff.

You’ve moved premises

If your business has moved, you might be on an expensive default tariff called a 'deemed energy contract'.

You’re still with the same supplier

If you haven’t changed tariffs or suppliers in a while, you could be on an expensive out-of-contract rate.

Your business is growing

Your energy usage will change as the business grows, making it crucial to compare and get the right tariff for you.

You want better service

Customer care is just as important as price. If you have an outage, a reliable supplier can resolve issues quickly and keep your business running smoothly.

You want to be more sustainable

Green tariffs could help your business reduce its carbon footprint, though they can cost more than standard tariffs.

Some green tariffs may include extra benefits, such as reduced energy rates and sustainability rewards.

What types of business energy tariffs are there?

Business gas and electricity contracts are usually fixed for the agreed term and may include exit fees or restrictions if you want to cancel early. It's important to understand the contract before signing.

Fixed term

The most popular type of business energy tariff. You can typically fix for 1-3 years, or up to five with some suppliers.

Bills vary depending on your usage, but the unit cost and standing charges stay the same during your contract.

Variable

The unit rate charged is based on market activity, so when prices go up, you’ll pay more.

But you’ll benefit if prices come down. Your supplier should give you notice before prices change.

Deemed tariff

You'll be on a deemed tariff if you move into new premises and start using gas or electricity without agreeing a contract with an energy supplier.

These are usually variable-rate and very expensive, but you won’t be tied in, so you should be able to switch any time, fee-free.

Out-of-contract rates

A type of variable tariff. Applies if your contract ends and you stay with your supplier without agreeing a new deal. You're not tied to a new fixed term, so you can usually switch any time.

It's usually expensive, so it's worth comparing and switching before your current deal expires.

Rollover tariff

Your supplier may automatically start a new fixed-term contract if your deal ends and you do nothing.

Rates are set by your supplier, not negotiated, and you'll usually be tied in until the new term ends.

These tariffs are rare and usually very expensive, so keep an eye on your existing contract.

Flex-approach tariff

Lets you bulk-buy your energy at wholesale prices in advance, giving you more control over your bills.

However, wholesale prices can change, so the amount you pay can also fluctuate.

Pass-through tariff

You pay a fixed wholesale energy price during your contract, but non-energy charges, such as National Grid and Transmission Network Use of System (TNUoS) charges, can vary.

If these go up, they could cancel out some of your savings from the fixed price.

Blend and extend contracts

These tariffs combine your current contract rates with the supplier's current market-based rates to create a new 'blended' tariff.

Your new rates can go up or down depending on market conditions.

Things to consider when comparing business energy deals

How gas and electricity tariffs work

How prices are calculated

Know how much energy you use

Time of day can make a difference

Compare annual costs

Renewal rules

Understand your tariff options

Before comparing deals, you should first decide which type of energy tariff would suit your business best. There are many options, which include:

Fixed-term – ideal if you want predictable bills
Variable-rate – prices can go up or down during your contract, usually depending on wholesale energy costs and supplier pricing
Green – can be more expensive than standard tariffs, but may be suitable if you run a sustainable business and want to cut your carbon footprint
Flex approach – bulk buy your energy in advance.

How much does business gas and electricity cost?

The table below gives an indication of average business energy prices – including the Climate Change Levy (CCL) – based on the latest government data³.

Energy type	Average price per kWh
Gas	5.28p
Electricity	24.51p

Average electricity prices have risen by 2% since June 2025, and gas prices have fallen by 0.6%.

Here's how much businesses of different sizes typically pay per unit of gas and electricity³:

Business size	Electricity (per kWh)	Gas (per kWh)
Very small/micro (approx. up to 10 employees)	38.36p	9.31p
Small (approx. 11-50 employees)	28.59p	4.86p
Large (approx. 50+ employees)	24.42p	3.38p

Your overall bill will depend on your sector, the tariff you're on and how much energy you use.

How can I save on my business energy bill?

Compare deals and switch

Make your business more energy-efficient

Introduce energy-saving workplace habits

Run an energy audit

Install a smart meter

Switching your business energy supplier is simples

Get a quote

Tell us about your business

Simply enter a few details about your business, the type of energy tariff you’re looking for, and when you're free to chat.

We’ll give you a call

Depending on your business size, our UK-based experts will talk you through the available deals on a short call.

If you have a micro business, you'll see your quotes after entering your details.

We’ll handle your switch

If you're happy with your new deal, we'll take care of the switch and help make it seamless for you.

Get a quote

What to expect when you switch

How long does it take?

Switching can take up to 30 days, depending on the size of your business. Micro businesses may be able to switch in as little as five working days, according to Ofgem.

When should I switch?

If you're on a fixed-term contract, you can only switch during your switching window, and your new supplier takes over when your current contract ends.

Will my energy supply be interrupted?

No. Your new supplier arranges the switch with your old one, so your gas and electricity supply carries on as normal. You'll need to take a meter reading and pay any outstanding bills.

What our expert says...

“Don’t wait until your current business energy contract ends to explore new tariffs, as you could risk falling into hefty out-of-contract rates.

“Shopping around early will give you more time to review different deals and suppliers. And with the help of our trusted partners at Bionic, you can search for an energy deal that suits your usage and budget.”

Dan Tremain, Energy and business energy expert

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Compare business energy

FAQs

Why is business electricity so expensive?

Business electricity can be expensive because:

Most businesses pay the standard 20% VAT on their electricity, while households in Great Britain pay 0% until 31 March 2027 (the usual rate is 5%)
Businesses pay a Climate Change Levy on their electricity bills, which is currently £0.801p/kWh
Unlike domestic customers, business rates aren't protected by the Energy Price Cap.

What is the Climate Change Levy (CCL)?

The Climate Change Levy (CCL) is an environmental tax charged on the energy that businesses use. Its aim is to encourage businesses to be as energy-efficient as possible and reduce their carbon emissions.

The current CCL rate from 1 April 2026 is £0.00801 per kWh of gas and electricity.

Businesses in eligible energy-intensive sectors can get a reduced CCL rate through a climate change agreement. The discounts are:

92% off the electricity rate
89% off the gas rate.

Some businesses, such as charities and businesses that don't use a lot of energy, are exempt from paying the CCL.

What’s the difference between domestic and business energy?

There's no price cap on business energy – domestic energy unit rates and standing charges are capped; business energy rates aren’t. It's important to compare quotes and fix your business energy rates to avoid price volatility.
You can usually only switch business energy tariffs in the switching window – unlike domestic energy tariffs which you can switch at any time (subject to any exit fees). However, if you’re on a deemed or out-of-contract rate, you should be able to switch any time.
The market works differently – domestic energy customers can pick from energy tariffs available across the market. For business energy, you'll need to get a bespoke quote from suppliers depending on the size, type and location of your business.

Are dual fuel business energy tariffs available?

Not usually. Business energy suppliers don't typically offer dual fuel tariffs. Instead, business energy is split between business gas and business electricity.

Because of this, you'll need to agree separate deals for both types of energy. But you can still get both fuels from the same supplier. That's where we can help you.

How do business energy contracts work?

Business energy contracts can last up to five years, maybe longer. Business energy is also priced on a per-unit basis, with both gas and electricity usually being contracted separately.

Most business energy contracts don't offer a cooling-off period, and on a fixed term, you won't be able to switch suppliers until you’re in the 'switching window'.

How are commercial energy plans calculated?

The costs of a commercial energy plan are calculated using several factors, including:

Your business’s energy usage – naturally, using more energy will cost more
The size and type of business – for example, larger businesses tend to be charged less per unit because they will use more energy overall
Your business’s location – energy is priced differently among regions
Contract length – locking your business into a longer business energy contract may reward you with a cheaper per unit price. Just keep in mind that locking yourself into a longer-term commitment means you won’t be able to switch to a better deal if prices fall.

What should I do if my business is moving premises?

If your business is moving premises, you'll need to tell your current supplier:

Where you're moving to – they'll need your new business address
When you're moving – they'll need the date you're leaving your current business address, as well as the date you move into your new premises
Your meter readings – both when you leave your old address and when you arrive at the new one.

Give your supplier a month's notice of your move if you can. If you cancel your old supplier without arranging a new one, you'll likely be put on a more expensive deemed rate.

How do I find out when my energy contract ends?

You should be able to find out when your energy contract ends by looking at a recent energy bill. If you can’t find the end date or it’s not clear, you should get in touch with your business energy supplier.

It's important to know when your energy contract ends. It gives you time to start looking for a new tariff before you move onto more expensive out-of-contract rates.

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