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Your Guide to the Average Price of Business Energy

Is your business overpaying for its gas and electricity? If you do not regularly switch tariffs, you are likely paying too much.

Many businesses think of electricity and gas bills as a fixed cost. The bills get paid every month and management and staff pay little attention. However, if you want your business to keep overheads as low as possible, you should take notice. 

When you start a new tariff with an energy company, you will usually be on a fixed-price tariff. When that ends, you will often be moved to a variable, or rollover tariffs. Both mean high rates for electricity and gas.

So, what is the solution? And how can you compare business energy prices with other equivalent businesses? Love Energy Savings have the answers.

We have prepared this guide on the average cost of gas and electricity for UK businesses. We also provide advice on how to avoid getting stung with high bills. Plus, we bust some common myths about business energy contracts and the switching process.

What are the average business energy prices in 2021

That is a hard question to answer because businesses vary so much in size and energy usage. However, we do know the average business energy rates, and that can be a useful comparison to get a sense of whether you are paying over the odds for electricity and gas.

In 2021, the average cost of business electricity was 13.32 pence per kWh. The average cost of business gas was 2.309 pence per kWh.

Size of Business

Gas kWh

Electricity kWh

Average annual bill

Micro Business (under 10 employees)

5,000

7,500

£1,464

Small Business

15,000

20,000

£3,349

Medium Business

35,000

35,000

£5,577

Large Business

75,000

90,000

£12,966

Industrial

500,000

250,000

£40,485

However, the costs don’t stop there. Companies also must pay a standing charge, which is added to your energy bill. Business standing charges vary from between 23 pence per day to as high as 29 pence per day. The standing charge is a fixed cost, meaning you pay regardless of how much energy you use in a day. It is applied to pay for the cost of transporting electricity and gas to your business.

What affects the cost of my business energy?

At Love Energy Savings, we use our industry knowledge and strong relationships with energy suppliers to offer you the best deals on the market and reduce your business energy bills.

However, many businesses are unsure how much they should be paying for their gas and electricity. This can leave businesses significantly overpaying for their energy bills and causing an unnecessary increase in overheads. Many companies on an expensive tariff can be paying up to 80% more for their commercial gas and business electricity bills than those on the best available deals.

The cost of commercial electricity and business gas depends on several factors, including:

  • The size of your business.
  • Where your business is based.
  • How many people you employ.
  • What type of business you run and in which sector.

What is the average small or micro business energy bill?

A micro business is officially a company with between one and nine employees. They make up more than 96% of all businesses. In 2021, there were 5.7 million registered micro businesses.

Microbusinesses use less energy than larger companies, which means they pay higher unit rates. The more energy you consume, the better unit rate you can negotiate. 

In 2021, the average unit rate for a micro business was 16.57 pence per kWh for electricity and 4.429 pence per kWh for gas usage.

That means that during a year, assuming gas and electricity consumption of 13,000 kWh, the average micro business would spend £1,464 each year on energy bills.

A small business is defined as a company with between ten and forty-nine employees. In 2021, there were over 200,000 companies in this category.

The average small business unit rates for 2021 were 14.91 pence per kWh for electricity and 2.448 pence per kWh for gas.

Again, if we assume an annual consumption of 35,000 kWh for small business, yearly bills would be £3,349.

What is the average medium-sized business energy bill?

Currently, there are approximately 36,000 medium-sized businesses in the UK. These are companies with between fifty and two hundred and fifty members of staff. Companies of this size could access rates of 13.79 pence per kWh for electricity and 2.145 pence per kWh for gas during 2021.

Inevitably there is a huge amount of range in the energy of consumption of medium-sized companies. Some may be energy-intensive factories or workshops. Others may be offices with relatively less consumption. The variability can be considerable.

Nevertheless, assuming an average consumption of 75,000 kWh of electricity and gas per year, a typical company would be paying £5,577 for their annual energy bill.

What is the average large business energy bill?

Large businesses are those with over two hundred and fifty staff. There are nearly 8,000 companies of this size in the UK. In general, this bracket of companies can access the lowest available unit rates. Due to the high energy consumption these businesses generate, a large business should get specialist advice from an energy broker like Love Energy Savings before switching.

Figures from 2021 show the average electricity unit rates for this class of business are 12.95 pence per kWh for electricity and 1.748 pence per kWh for gas.

If we imagine a company of this size generating 155,00 kWh during a year, their commercial energy bill would be £12,966 each year.

My bills are less than the average company of our size – should we switch?

Don’t forget the average business energy bills are not the cheapest available. As a rule of thumb, if you haven’t switched in the last year, your bills could be cheaper. We want to encourage companies to think of an annual energy switch as routine as annual accounts.

By switching suppliers, you can compare the latest deals from a wide range of energy suppliers. 

Love Energy Savings have an experienced and friendly business team to help you find the best energy deals. We know all companies are unique – so we set out to meet your exact requirements. 

Our energy experts can advise you on:

  • Energy tariffs – including green and fixed-rate contracts
  • Half hourly meters
  • Multi-site meters
  • Energy management

How can I reduce my business energy bills?

The easiest and quickest way to reduce your commercial energy bills is to switch to a better deal. However, many companies are reluctant to switch their energy supplier. This is a mistake – switching to a cheaper energy tariff can save you hundreds of pounds a year, or even more.

Another way you can reduce your energy bills is to ensure that your operations are as energy-efficient as possible.

Why switch business energy tariff?

Many companies have a poor impression of the process of switching to a new commercial energy contract or supplier. The perception is that it will be slow, complicated or overly administrative, and may even end up costing more in time and money than it is worth.

At Love Energy Savings, we can handle your switching process. We handle all the communication with both your old and new supplier. We don’t charge for our service. We simply find you the best deal to match your company’s needs. 

Let’s tackle those misconceptions about switching energy supplier.

Slow

Comparing the different tariffs from all the UK’s energy suppliers would take a long time. But Love Energy Savings can find your company the cheapest deal on the market in seconds.

Although it does take a few weeks to finalise your switch, we handle all the back work so you can sit back and wait to benefit from cheaper bills.

Complicated and too much admin

When you switch with Love Energy Savings, we handle all the administration. All you need to do is let us know your requirements and we do the rest. Simple.

Not worth the time and money

Businesses that are on the most expensive variable tariff rates could be paying as much as 80% more than the best rates on the market. That means a considerable saving over a year of hundreds or even thousands of pounds.

To find out how much you can save with Love Energy Savings, simply compare the latest business energy prices.

FAQs

  • What is kWh (kilowatt hour)?

    kWh is a unit of measurement used by energy suppliers to measure how much gas and electricity you use per hour. There is a cost attributed to this so that your supplier can accurately bill you for usage.

  • What are MPAN and MPRN numbers?

    Your MPAN and MPRN numbers are unique identifiers attributed to meters at your property. Each meter has a different one and this allows suppliers to ensure they are billing the property for energy usage. The number is 6-10 digits and can usually be found every energy bill. 

  • Can I get a better deal on my business energy?

    It is hard to negotiate a better deal with business energy suppliers. However, our team will always negotiate the best price for your business, and in 99% of cases, we will ensure that it is cheaper than your renewal.

    To find out how much you can save, complete our online energy comparison form.

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