What makes up the price per kWh
Each of these elements is combined by the supplier into a single pence-per-kWh figure quoted to your business, meaning two businesses in different regions or on different meter types can see different rates even with similar overall consumption.
- Wholesale electricity cost, which fluctuates with the energy market
- Network charges for using local and national electricity infrastructure
- Environmental and social obligation costs built into the rate
- Supplier operating costs and margin
Typical price per kWh ranges
| Business profile | Price per kWh |
|---|---|
| Micro business, standard meter | 30p - 38p |
| Small business, standard meter | 27p - 34p |
| Medium business | 23p - 30p |
| Large business, half-hourly meter | 18p - 27p |
Worked example: calculating a monthly bill
Suppose a small business uses 2,000 kWh in a month, is quoted a unit rate of 30p per kWh, and has a standing charge of 40p per day for a 30-day month. The electricity cost is 2,000 multiplied by 30p, giving £600. The standing charge cost is 40p multiplied by 30 days, giving £12. The total before VAT is £612.
This simple calculation, consumption multiplied by unit rate plus standing charge multiplied by days, is the basis for every electricity bill, regardless of business size, though larger sites may also see time-of-use or capacity-related charges layered on top.
Compare business energy prices
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Day, night and multi-rate pricing
Some businesses are on multi-rate meters with separate unit rates for day and night usage, sometimes called Economy 7-style tariffs. Night rates are usually lower, which can benefit businesses that run equipment or refrigeration overnight, but the day rate is often higher than a single flat-rate tariff to compensate.
Reducing your effective price per kWh
While the contracted unit rate is fixed for a fixed-term deal, businesses can reduce their effective average price per kWh paid over time by shifting flexible usage to cheaper periods where multi-rate tariffs apply, and by improving efficiency to reduce total consumption against the same standing charge.