Business Electricity Prices Per kWh - How They Impact Your Business
When switching energy suppliers, understanding your business electricity tariff is essential. From kilowatts per hour (kWh) to standing charges and the Climate Change Levy to taxes, we have everything you need to know in our handy guide.
Alternatively, jump to a particular section below:
What is a kWh?
Factors that impact the price per kWh you pay
Average regional prices
Other costs that affect your business energy
What is a kilowatt per hour (kWh)?
By simply switching to a cheaper unit rate you can significantly lower your electricity price per kWh.
Why is it important to know your pence per kWh?
A kilowatt per hour is a unit of measurement for energy usage. It’s measured by the amount of power you're using in watts over one hour. kWh is used to measure both gas and electricity.
For context, appliances that use 1,000 watts of electricity will take an hour to reach one kWh. An appliance of 10 watts would take 100 hours to use the same amount of electricity.
Suppliers will charge you per unit of kWh. In the example above, if your unit rate was 20p per kWh and your appliance used 1,000 watts of electricity. Every hour, you would pay 20p for that appliance is on.
Who is the cheapest business electricity supplier per kWh?
Your unit cost depends on several factors unique to your business. So, the cheapest energy supplier for one business may not be the cheapest supplier for another. Prices change daily, so businesses looking for an energy quote should compare prices using our unique engine.
You can check available tariffs here.
However, based on prices in March 2023 here are some of our cheapest 2-year fixes for small business electricity customers:
| Supplier | Price per kWh (p) | Standing Charge (p) |
|---|---|---|
| Smartest Energy | 35.21p | 31p |
| EDF | 34.00p | 25p |
| Scottish Power | 34.78p | 26p |
| Valda | 31.65p | 33p |
| Opus | 32.85p | 165p |
| British Gas Lite | 33.04p | 42p |
For a more accurate business electricity prices per kWh, you should compare suppliers.
Factors that impact the price per kWh you pay
Several factors can affect your gas and electricity kWh price for your business energy. We’re experts in finding businesses of all shapes and sizes a new deal. Don’t just take our word for it, we’ve got over 400,000 happy customers and an excellent Trust pilot rating with over 16k reviews.
Your Business Size
We're not referring to the traditional way of measuring the size of a business. Energy suppliers look at annual consumption. Larger consumption businesses will typically be offered cheaper electricity prices per kWh as they are using greater amounts.
For context on business size, a small fish and chip shop could be using a lot of energy and be classed as a large business in the eyes of a supplier.
The average energy consumption for a micro & small business is between 5,000 and 15,000 kWh per year. Whereas a large business running at full capacity could use up to 20 million kWh annually! The average large consumption business will typically use around 100,000 kWh per year.
Check your consumption and see pricing available here.
Your Meter Type
Your meter should be suited to the type of industry you are in. There are some things you should be aware of when looking for a better deal.
Here are some examples of meters that could save certain types of energy users money.
Economy 7 / Multi-rate meters
If you use more energy at night, you may save money on your business electricity price per kWh with an Economy 7 meter. This can also sometimes be referred to as a multi-rate meter. Multi-rate meters will offer cheaper electricity prices per kWh at night with a higher rate during normal peak hours.
Half hourly meters
A half-hourly meter also known as HH provides readings every half an hour to your supplier. This ensures you’re accurately paying for what you use.
Half-hourly metering is mandatory for any business in the UK using at least 100,000 kWh (kilowatt per hour) of electricity each year.
Your Location
The location of your business can be the biggest factor in what you pay per kilowatt for your energy.
The UK is split up into regions that suppliers use to benchmark your minimum price. Factors such as:
- Distance from source (power plant) to your business.
- Spillage - some regions have older wires and pipes, and the energy escapes meaning some is lost along the way. Unfortunately, if you’re in one of these regions you’ll pay more overall, as more energy is required to reach your location.
- Some regions are subsidised, such as Northern Scotland, which increases costs further South than in the North, this is due to the costs of transporting the energy into the highlands and remote islands of Scotland.
| Region | Electricity Unit Rate (p/kWh) |
|---|---|
| North Wales/ Cheshire | 33.55p |
| North Scotland | 32.72p |
| East England | 32.32p |
| London | 31.65p |
| North West England | 32.11p |
| North East England | 31.50p |
| South East England | 31.93p |
| South Scotland | 32.12p |
| Southern England | 31.72p |
| Yorkshire | 31.63p |
| South Wales | 31.92p |
| West Midlands | 31.68p |
| East Midlands | 31.29p |
| South West England | 31.58p |
Find the latest business electricity prices per kWh in your area and futureproof your costs
We've started to see the energy market stabalise in 2023. Despite rates still higher than what we have previously been used to, many business owners are seizing this period of stability to lock-in their price per kWh as there's no guarentee that prices will not rise in the future.
What are the average business energy prices per kWh?
The costs of energy in the UK are constantly changing, and the best way to find out the latest prices is to compare the latest deals.
The latest data shows the average cost of business electricity in March 2023.
We have provided estimates based on the amount of usage a business may expect to use depending on their commercial activity.
It is important to remember that every business is different in terms of location, consumption and size. This means that these prices do not reflect the business energy prices you may receive with a live quote.
|
Business Gas |
Estimated Electricity Usage |
Average Business Electricity Bill |
|
Coffee Shop/ Newsagent |
5,000 kWh |
£1,659 |
|
Hair Salon |
15,000 kWh |
£4,838 |
|
Restaurant |
25,000 kWh |
£8,032 |
|
Small Manufacturing Company |
50,000 kWh |
£15,609 |
These are the average prices per kWh at the time of writing.
Standing Charges
There’s a range of costs that make up your energy bill.
The first is your standing charge which is paid at a daily set rate. You will be required to pay standing charges regardless of how much energy you use on a given day. This is separate from the price you pay per unit of electricity and gas used.
If you want to avoid paying a daily fee, you can sign up for a no-standing charge tariff. However, you should bear in mind that these tariffs can come with increased prices per kWh.
Business Energy Taxes
Taxation costs make up the remainder of your business energy bill. This includes VAT paid at a rate of 20% and the Climate Change Levy (CCL).
The Climate Change Levy is an additional government tax. Businesses are required to pay the CCL on electricity, gas, and solid fuels like coal and petroleum.
When comparing business energy prices, it’s important to factor in all costs involved. A tariff with the cheapest prices per kWh is not always the best value deal.
How many kWh of energy does the average business use?
Whilst we break down the average consumption for each business size, it is important to remember that the sector a business operates in plays a big role in consumption. For example, a small restaurant may use significantly more gas and electricity than a large office that employs 100 people.
What is the average energy consumption of a small business?
This can be split into two categories, a micro-business and a small business.
Micro-businesses can expect to consume:
- Electricity: between 3,000 and 10,000 kWh on average.
- Gas: between 3,000 and 10,000 kWh on average.
Small businesses can expect to consume:
- Electricity: between 10,000 and 30,000 kWh on average.
- Gas: 10,000 and 25,000 kWh on average.
How much energy does a medium-sized business use?
Thinking of size in terms of consumption, rather than the number of employees and turnover, a medium-sized consumption is:
- Electricity: between 30,000 and 60,000 kWh on average.
- Gas: between 25,000 and 50,000 kWh on average.
How much energy does a large business use?
Thinking of size in terms of consumption, rather than the number of employees and turnover, a large consumption is:
- Electricity: more than 60,000 kWh.
- Gas: more than 50,000 kWh.
We’re always speaking to our trusted suppliers to find the best kWH prices available
Business Electricity Prices Per kWh FAQs
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How can I find out if I’m paying too much per kWh for my energy?
The quickest way to find out if you're paying too much for your gas and electricity is to compare the latest prices.
The average cost per kWh is 31.09p for electricity and 10.10p for gas. However, these will not be the cheapest rates available.
If it’s been a few years since you switched, you will likely be paying too much for your gas and electricity.
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Do wholesale energy prices per kWh affect my unit rate?
Wholesale energy prices per kWh can vary on a weekly or even daily basis. On average, around half of a business energy customer's bill is made up of wholesale energy costs.
Changes in the price of wholesale gas and electricity can affect your business energy bill.
Those on a variable rate tariff are most likely to be affected. If your business is on a fixed-rate tariff, changes in wholesale prices will not affect your unit rate.
Wholesale prices have fallen in recent years. The average wholesale electricity prices per kWh are currently at around 3 pence per kWh. The latest wholesale gas prices stand at around 0.5 pence per kWh.
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Why does the price of energy per kWh vary between regions?
When the UK imports energy, it imports from Europe. Most of this energy comes into London before it is distributed to the rest of the UK. This means London is the first to get energy, so less of it is needed to generate each kWh of output.
Regions like Wales and Scotland are further away from the source of energy. When energy is transported, some of it is lost.
The further that energy must travel, the more is wasted in the process. Some power stations in regions like Scotland and Wales can make up for the energy loss. However, these regions will still pay more overall.
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Which supplier offers the cheapest prices per kWh?
Your unit cost depends on several factors unique to your business. So, the cheapest energy supplier for one business may not be the cheapest supplier for another.
This means that there is no cheapest supplier for all businesses. The quickest way to find the best energy supplier for you is to compare energy prices online.