How Much Energy Does Your Small Business Really Use?

How much energy does a small business typically use?

According to the government's Non-Domestic National Energy Efficiency Data Framework (ND-NEED), published by the Department for Energy Security and Net Zero in August 2025, the median electricity consumption across all non-domestic buildings in England and Wales is around 6,600 kWh per year.

But that figure covers everything from a market stall to a factory. For small businesses specifically, the picture varies quite a bit depending on what you do and where you do it.

As a general guide:

• Offices tend to sit at the lower end. Computers, lighting and heating add up, but compared to businesses that run equipment or appliances all day, the baseline demand is relatively modest.

• Retail shops typically use more than offices, driven by lighting, heating and in some cases refrigeration. A shop open seven days a week naturally uses more than one that closes on Sundays.

• Hospitality businesses (cafés, restaurants, pubs) consistently show the highest energy intensity of any sector, according to ND-NEED. Catering equipment, refrigeration and the fact that most hospitality premises are relatively small means energy gets used hard in a compact space.

• Light industrial and workshop businesses tend to have high total consumption driven by machinery, though their energy use per square metre can actually be lower than hospitality because they operate in larger spaces.

The key takeaway is that sector matters more than size. A small restaurant will almost certainly use more energy than a small accountancy firm, even if they're the same number of employees and based on the same street.

What drives small business energy costs?

Knowing how much energy you use is one thing. Understanding what's actually driving your bill is where it gets useful.

How to calculate your small business energy costs

You don't need an accountant to work this out. Your bill is made up of two things:

• Unit rate: the amount you pay per kWh of energy used. This is the number that varies most between suppliers and contracts.

• Standing charge: a fixed daily cost just for being connected to the grid. It applies whether you use any energy or not.

To estimate your annual energy cost, the calculation is straightforward:

(kWh used per year x unit rate) + (standing charge x 365)

So if your business uses 10,000 kWh of electricity per year and your unit rate is 27p per kWh, your usage cost comes to £2,700. Add your standing charge on top of that to get your total annual bill.

Not sure how much you're using? Your most recent energy bill or your online account will usually show your annual consumption in kWh. That's the number to work with.

One thing worth knowing: unlike households, businesses aren't covered by Ofgem's price cap. That means your unit rate is set entirely by your contract, and rates can vary significantly between suppliers. According to Ofgem's State of the Market report (January 2026), smaller businesses consistently pay higher unit rates than larger ones, which makes comparing your options more important, not less.

How to reduce energy costs for your small business

You don't need to overhaul your entire operation to make a dent in your energy bill. The biggest gains typically come from a combination of small behavioural changes and one or two more considered decisions.

Start with the easy wins

Turning off equipment that isn't in use, switching to LED lighting if you haven't already, and setting heating and cooling to only run when the building is occupied can all reduce waste without costing anything. These are usually the lowest-cost starting point.

Know what's actually using your energy

If you're not sure where your consumption is going, an energy audit can help. This doesn't have to be an expensive exercise. At its simplest, it means going through your premises and noting what equipment is running, for how long, and whether it needs to be. Our guide to business energy audits walks through how to approach it.

Look at your equipment

Older appliances, particularly refrigeration units, ovens and heating systems, tend to use more energy than modern equivalents. Replacing them involves upfront cost, but the long-term reduction in bills can offset that investment. If a full upgrade isn't viable right now, servicing equipment regularly helps it run more efficiently in the meantime.

Review your tariff

Behavioural changes and equipment upgrades only go so far if you're on a poor contract. The tariff you're on has a direct impact on what you pay per kWh, and business energy rates aren't regulated the way domestic ones are. If you haven't compared your options recently, or if your contract is coming to an end, it's worth checking what's available. You can also find practical day-to-day tips in our 10 ways to save energy at the office guide.

Are you on the right energy tariff?

Even if your usage stays exactly the same, your costs can change significantly depending on the contract you're on.

Business energy isn't regulated the same way as domestic energy. There's no price cap protecting you from market movements, which means the rate you pay is down to what you negotiated, and when. Two businesses using identical amounts of energy can end up with very different bills simply because one is on a better contract.

According to Ofgem's State of the Market report (January 2026), smaller businesses consistently pay higher unit rates than larger ones. That gap widened in 2025 as very small businesses saw renewed electricity price increases while larger businesses benefited from falling costs. Being on the right tariff matters more for small businesses, not less.

If your contract is coming to an end, or if you haven't reviewed your deal in the last year, it's worth comparing what's available. According to Ofgem's Non-Domestic Consumer Research (March 2025), only 34% of small businesses switched supplier in 2024, which means the majority haven't compared their options recently.

Compare business energy tariffs and see what's out there for your business.