Business electricity rates

It will depend on your supplier, your contract and whether you need to pay the Climate Change Levy.

Small business electricity prices are typically higher than those for larger businesses. This is because they don’t have the same economies of scale.

The electricity usage of businesses varies a lot more than households, so it’s difficult to give an average saving. It will depend on what you’re using power for, the size of your business premises, the number of people on-site and a few other factors.

A great way to find out what you can save is, of course, to compare prices across the market.

If you rent your business premises and don’t know who supplies your energy, the easiest way of finding out is to ask the letting agent or landlord of the property.

Alternatively, you can use the Energy Networks Association (ENA) postcode search tool to find the name and phone number of your network operator. Your network operator will be able to tell you who supplies your electricity.

If you’re moving into new business premises and the previous tenant or owner has let the electricity supplier know they’re moving, you should receive a letter addressed to ‘The Occupier’. This should give you details about the current energy supplier for the property.

The rules are a little different for companies that are classified as ‘microbusinesses’. These are small companies that either:

• Use no more than 100,000 kWh of electricity per year
• Have 10 or fewer employees and turn over no more than £2 million per year.

If you qualify as a microbusiness, your supplier must provide you with extra support with switching. For example, they must clearly indicate the end date and notice period for your contract when you agree to a new energy plan.

They must also tell you your annual energy consumption and how your old tariff compares with their latest options. The maximum notice period allowed to end a microbusiness energy contract is 30 days.

If you run your business from home and it’s classified as a microbusiness, you might be eligible for a business electricity contract rather than a domestic one. To make the switch, you’ll usually need to prove that at least 50% of your energy usage is due to running your business.

If you’re not sure if you should be classed as a microbusiness by an energy supplier, Citizens Advice can help:

• Call 0808 223 1133 or use their online webchat.
• For textphone, dial 18001 followed by the helpline number.

If you work from home and don’t need a huge amount of energy to run your microbusiness, you may need a domestic electricity tariff instead. Shop around, compare deals and weigh up your options to see which gives you better value for money.

Business electricity rates can often be cheaper than domestic rates. This is because businesses typically use more electricity, so can usually negotiate better rates than domestic customers. However, as a business customer you’ll pay a higher rate of VAT – usually 20% compared with 5% for domestic electricity.

You may also have to pay a Climate Change Levy (CCL).

Most businesses are charged a VAT rate of 20% on their gas and electricity, although some are eligible for a discount.

You might only need to pay 5% VAT if:

• A minimum of 60% of your business’s energy is used for domestic purposes
• You use less than 33 kWh of electricity each day, or 1,000 kWh each month
• You’re a charity or non-profit organisation.

No, nothing should change in terms of the supply of your business electricity, except the name of your supplier. The same lines and equipment will be delivering your power.

Yes. You’ll need tell your current electricity supplier that you’re switching.

Check the terms of your contract to see if you’re required to give a certain notice period before you switch. Although it may not be applicable to small businesses, giving your supplier plenty of notice can help things run smoothly.

You should also make sure:

• You’re no longer in a contract
• You’ve paid all your outstanding bills before your leave
• You provide a final meter reading so your old supplier can send you a final bill and settle your account.

Bionic, our business electricity partner, has a team of energy experts who can support you with all of this, including communicating with suppliers.

You can still switch if you’ve been in debt to your supplier for fewer than 28 days. Your old supplier will add any owed amounts to your final bill.

You’ll need to repay a debt first if you’ve owed money for more than 28 days. You won’t be able to switch suppliers until you do.

You normally can’t leave a business energy tariff before the end of the contract.

You can start searching for a new provider as soon as you enter the ‘switching window’ of your contract. This is typically between one and six months before the end of the contract.

Let your electricity supplier know that you’re moving business premises as soon as you can. Giving them at least a month’s notice will help the process go smoothly.

On moving day, take a last meter reading and send it to your supplier to organise your final bill. You’ll also need to take a meter reading at your new premises when you move in.

Try to arrange an electricity contract for your new premises before you move in. Otherwise, you’ll automatically be put on a deemed contract by the existing supplier. This rate is typically expensive.

You can stick with the existing supplier and negotiate a better rate. But it always makes sense to shop around to see if you can find a cheaper deal.

Yes. Electricity monitors simply show you how much electricity is being used, hopefully making your business more energy efficient. They’re not the same as smart meters and they don’t share information with your supplier. Having more than one shouldn’t prevent you from switching electricity supplier.

If your business is energy-intensive, you might need more than one meter, or you may run your business across different sites. You can choose to keep each meter on a separate contract but manage them in one place through your online energy account.

Alternatively, you could switch to a multi-site energy deal that lets you consolidate your electricity rates and renewal dates into one single plan.

The Feed-In Tariff (FiT) scheme finished for new applications on 1 April 2019. If you applied before that date, you can sell any surplus energy your business has generated back to the National Grid.

Although you can no longer enter the FiT scheme, you might be eligible for the Smart Export Guarantee (SEG). Introduced on 1 January 2020, this is similar to the FiT programme, but payments are set by licensees rather than Ofgem.

A half-hourly meter records your business’s electricity use every 30 minutes, automatically sending your usage data to your supplier. Think of it as a smart meter for large businesses.

If you’re a business operating in the UK that uses 100kW or more during any 30-minute period of the day, a half hourly meter is a legal requirement.

Green electricity comes from renewable sources, like sunlight, wind, rain, plants and geothermal heat. Using an electricity supplier that sources some, or all, of its energy from renewables is one way of making sure your business is doing its bit for the environment. Find out more in our green energy guide.

When you compare through us, we’ll show you which suppliers provide green energy when we send you your quotes.