Current market overview
Wholesale gas and electricity costs feed directly into the prices suppliers offer business customers, so rates move up and down as global gas markets, generation costs and network charges shift. Suppliers typically build in a margin and pass through non-commodity costs such as network charges, environmental levies and balancing costs.
Because business tariffs are negotiated rather than capped, pricing can differ noticeably between suppliers for what looks like an identical usage profile. This is why running a fresh comparison at renewal, rather than accepting a rollover rate, tends to produce a more competitive outcome.
Electricity rates
Business electricity unit rates in the UK generally sit within a broad range depending on region, consumption band and contract length, with day rates typically higher than any night or off-peak rates on multi-rate meters. Standing charges are added daily regardless of usage.
Larger sites with half-hourly meters often access more competitive per-unit pricing because suppliers can see and price actual demand patterns, while smaller businesses on standard meters are usually quoted a flatter, slightly higher rate.
Gas rates
Business gas is priced in pence per kWh after your supplier converts metered cubic metres or feet into kWh using a calorific value and volume correction factor. Gas unit rates are usually lower than electricity rates for the same energy content, though standing charges still apply daily.
As with electricity, gas pricing depends on annual consumption band, region, credit score and contract length, and larger consumers typically negotiate more favourable terms than micro businesses on default rates.
Indicative price ranges by business size
| Business size | Electricity (p/kWh) | Gas (p/kWh) | Standing charge (p/day) |
|---|---|---|---|
| Micro business | 28 - 38 | 7 - 11 | 25 - 55 |
| Small business | 25 - 34 | 6.5 - 10 | 25 - 50 |
| Medium business | 22 - 30 | 6 - 9 | 30 - 60 |
| Large / half-hourly | 18 - 27 | 5.5 - 8.5 | 40 - 90 |
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Standing charges explained
The standing charge is a fixed daily amount charged regardless of how much energy you use, covering costs such as meter maintenance and network access. It is added to the unit rate cost to produce your total bill.
- Charged per day, not per unit consumed
- Varies by region, meter type and supplier
- Can be a larger proportion of the bill for low-usage sites
- Should always be compared alongside the unit rate, not in isolation
Contract types and how they affect price
Most business energy contracts are either fixed, where the unit rate is locked for the agreed term, or variable, where the rate moves in line with wholesale market changes. Fixed contracts offer budget certainty; variable contracts can benefit from falling wholesale prices but carry more risk.
Deemed and out-of-contract rates, which apply automatically if a contract lapses without a new agreement in place, are typically the most expensive option and should generally be avoided by arranging a renewal ahead of the end date.
Renewing or switching
Suppliers usually allow businesses to compare and lock in a new rate in the window before their current contract ends, commonly between one and six months ahead. Acting early avoids being moved onto a deemed rate, which is generally priced higher than a negotiated contract.
Comparing quotes from several suppliers at renewal, rather than accepting an automatic rollover, is the most reliable way to keep prices competitive over time.