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Rising electricity costs have been playing havoc with small business bank accounts for over a year. Catastrophic price rises following the war in Ukraine, have even prompted emergency government support – which was drastically reduced on April 1 2023.
It's vitally important for business owners to save what they can on energy costs. Suppliers can charge expensive exit fees to customers that want to leave a contract early, which means proper research is crucial to prevent being tied into a long-term drain on overheads. While “cheap” energy bills feel like a distant memory at the moment, there are still some preferrable rates and packages you can explore if you're looking to switch. These include:
- Octopus Energy – Best business tariffs for renewable energy at low cost
- Utilita– Best business electricity tariffs that have reasonable value extras and add-ons
- EDF Energy– Best tariffs for the security of a ‘Big Six' supply
Click any of the links above to compare costs on business energy tariffs for your business
We've crunched the tariffs and customer feedback on suppliers including EDF Energy and Octopus to help you find the best rates for business users. For a direct recommendation, use our free online tool to 🔍compare electricity supplier deals.
Whether you’re looking to switch immediately, or planning ahead for when your contract ends, this article will guide you through the top electricity suppliers for SMEs. We'll outline how much they cost, as well as expert insights from industry leaders to advise on energy bill cost saving in 2023.
Business Energy Government Support
The government's Energy Bill Relief Scheme, a discount on wholesale gas and electricity prices for all ‘non-domestic' customers, has now ended. In its place is the dramatically reduced Energy Bill Discount Scheme (EBDS).
EBDS support will apply to all variable and flexible tariffs, as well as fixed contracts that were agreed on or after 1 April 2022. So even if you switch providers now, you'll still be eligible for the discount.
- Business customers will automatically receive a discount of £6.97 a megawatt hour for gas and £19.61 a MWh for electricity.
- However, smaller businesses with energy costs below £107 a MWh for gas and £302 a MWh for electricity will not receive support.
- Customers do not need to take action or apply to the scheme to access the support, as the p/kWh discount will automatically be applied until 31 March 2024.
Even with these government actions, we do still recommend that you continue seeking a range of alternative price quotes in order to lock down the best price you can.
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In this article, we’ll cover:
- How to find cheap business electricity rates
- Best electricity suppliers and pricing for UK small businesses
- How has the war in Ukraine affected electricity demand and pricing?
- Average electricity costs for small businesses
- Types of business electricity tariff
- What charges make up a commercial electricity bill?
- Key considerations when comparing electricity suppliers
- How to switch business electricity suppliers, and why
- Business electricity FAQs
Can you still find cheap business electricity rates?
Due to months of record-high inflation, “cheap” isn’t a word being used much these days. Still, it is certainly possible to find cheaper business electricity rates by comparing provider offerings. Business owners just have to be savvier than they might have been 18 months ago.
Various factors can influence the overall cost of an electricity bill, so there isn't a one-size-fits-all approach to ensuring you always have the best rate. Having said that, here are some general cost-cutting tips:
- Pay by direct debit: providers like EDF Energy offer discounts when customers pay this way
- Look for startup-specific plans: some offer more flexibility, shorter contract lengths, or zero exit fees
- Consider your electricity consumption – work out when your company uses the most and least amount of electricity, and find the suppliers and tariffs that match these needs
- Assess all options – don't just accept a renewal offer, it’s wise to weigh up all the options available
Another option is to use our bespoke cost comparison tool designed specifically for small businesses. Simply tell us about your commercial electricity needs, and you can 🔍compare quotes from a range of business energy brokers to find the right plan for your organisation.
UK business electricity rates by supplier
In the table below, we’ve profiled three of the best electricity suppliers for small businesses, including details specific business needs that each supplier is best suited for.
We compiled this list by selecting providers based on the quantity and quality of their Trustpilot reviews and ratings, and have only considered providers with at least 1,000 reviews and a ‘great’ or ‘excellent’ rating. All pricing is based on the average fixed rate for a customer in London.
Swipe right to see more
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Renewable energy at low cost
Extras and add-ons
Security of ‘Big Six' supply
Price (pence per kWh)
Price (pence per kWh)
Price (pence per kWh)
Standing charge (pence per day)
Standing charge (pence per day)
No standing charge with contract, 35p without
Standing charge (pence per day)
Compare energy costs for the best deal Compare costs
Octopus Energy: best for low-cost, renewable energy
Understandably, Octopus Energy’s rates have seen significant price hikes over the past few months, but there is still value to be found.
Octopus Energy, like most other providers, offer specific fixed tariffs which are ideal if you want to know just how much you’ll be paying for electricity over the course of a year. These tariffs may feel especially welcome for small business owners at this time.
But it also offers a range of unique ‘special products’, which are personalised plans for businesses. These include:
- ‘Electric Supply’, designed specifically for charging businesses that provide charge points for electric vehicles, which gives you cheaper prices whenever your charge points are used outside of peaks – and
- ‘Panel Power BETA’, designed specifically for solar panel businesses which gives you combined energy at 15p/kWh* for every unit you export.
Octopus takes an advance payment as a safety precaution against unreliable customers or unforeseen circumstances. This is usually equal to one month’s estimated energy cost, however it can be up to three months depending on your credit score.
Any money taken will be held until the end of your contract and will not count towards your energy bill, but will be returned to you once your account balance is fully cleared at the end of your contract.
Its plans also include exit fees if you decide you want to switch to a new provider at any point within a contract. This is calculated as a percentage of your remaining contract value.
We think Octopus Energy goes above and beyond for its customers. At the height of the energy bill chaos last September, Octopus was one of the only suppliers to offer customers on its standard variable tariff a 4% discount to help combat fuel poverty. Its stability was also proven by its acquisition of industry giant Bulb, which went bust in October.
Octopus Energy's customer support options include email and phone, along with online customer accounts.It also offers a smooth switching process, with no need for engineer or installation visits, and no disruption to your power supply.
Octopus Energy has collected an impressive 116,000+ reviews on Trustpilot, garnering an ‘excellent’ rating and a score of 4.8 out of 5.
Providing 100% renewable electricity across all its tariffs, along with dedicated products for charging and solar businesses and vertical farms, Octopus Energy has an incredibly strong green electricity offering.
Unlike competitors like EDF, Octopus Energy makes it clear exactly how much you'll save by switching to a green tariff. That's why we think it's the best option for eco-friendliness.
- 116,000+ Trustpilot reviews, with an ‘excellent’ rating and 4.8/5 score
- 100% renewable electricity
- Offers specialist products for charging, solar, and vertical farm businesses
- No pricing information available online
- Advance payments and exit fees
Utilita: best for extras and add-ons
Utilita's mainly supplies electricity to business customers via smart and prepayment meters. While smart meters are a very welcome way to track your energy usage, there has been recent scrutiny around how prepayment meters may ultimately disadvantage users, especially amid rising wholesale costs.
Utilita has tried to make their prepayment meter system as convenient as possible for customers: you can top up online, over the phone, via their app, by SMS or at any PayPoint location. Additionally they offer Emergency and Friendly Credit so you'll never run out of credit at night, over the weekend or during bank holidays.
If you want to switch to another payment method they also offer Direct Debit and Pay on Receipt plans, and there are no switch or exit fees, and that ease of flexibility is why we’ve voted them as best for extra add-ons.
Utilita's “one price fits all tariffs” include:
- 12 or 24 month fixed price contract for both electricity and gas
- Same price whether you pay by Pay As You Go, by Direct Debit or to Pay on Receipt.
- Flexi Pay means you can switch how you pay at any time.
- Free smart meter with Smart Energy Monitor
- Out of Contract / Deemed Electricity Prices: 35p/day standing charge.
One key benefit of switching to Utilita during these times is the fact that they are one of the only energy suppliers to have no standing charge for contracted customers. This means you won't pay anything if you don't use any energy. On average, this could save you around £109.50 a year.
But beyond the flexible financial add-ons, Utilita also offer an entire range of other add-ons to keep their customers happy. From Utilita Rewards, which lets you earn credit to spend on energy, to Utilita Extra which offers lifestyle-related add-ons such as weekly giveways, prize draws, shopping and concert tickets.
Utilita's customer service team is available by phone, from Monday-Friday between 8am and 6pm, and an online form is also available.
But it's Utilita’s energy hubs that are its stand-out feature, with the hubs being physical locations in communities all across the UK. Here you can speak to a dedicated Energy expert face-to-face about any struggles and concerns about your bill.
Utilita has amassed more than 59,000 reviews on Trustpilot, along with an ‘excellent’ rating and a score of 4.4 out of 5.
Utilita’s main eco-friendly approach is to encourage individual behavioural change amongst their customers, and by decarbonising the emissions from the day-to-day running of their company. On its app, the supplier also offer insight into your ‘Smart Score’: a measurement of how energy efficient you are, based on how you use energy at home.
No green tariff is available, however. That's partly why, in Which's November 2022 survey of the best green energy providers, Utilita scored 10% and placed second from bottom out of 21 providers.
- Has physical energy hubs where you can talk to dedicated Energy Experts all across the UK
- 59,000+ reviews on Trustpilot, with an ‘excellent’ rating and 4.4 out of 5 score
- Extras and add-ons (for reducing energy bills and improving lifestyle)
- Minimal pricing information available online
- Less of a focus on supplier green electricity and eco-friendliness
EDF Energy: best for ‘Big Six' supply
The Big Six is the nickname given to the group of largest energy suppliers in the United Kingdom: British Gas, EDF Energy, E. ON, Npower, Scottish Power, and SSE. Choosing a Big Six Supplier has its pros and cons, but often people end up choosing them because they are the most well-known, advertised, and trusted.
While most of the other brands featured in this guide are smaller energy suppliers, we’ve included EDF as the best for big six supply. Your tariff rates are determined by your:
- Type of tariff – you'll pay lower rates when you choose an online-only tariff, compared to a full-service tariff that gives you access to call centre support.
- Length of tariff – when you choose a fixed tariff, you'll pay a little more for the security of fixing your tariff rates for longer.
- Payment method – you'll pay lower unit rates when you pay by Direct Debit and Pay As You Go, compared to Cash/Cheque.
According to their page on the new energy bill government support, EDF claim that to support their customers further in these tougher times they are increasing their customer service teams, investing more into their customer care training program and “bringing forward” £20 million to spend on energy efficiency measures for fuel poor households this year, with a package of free energy-saving measures for eligible customers.
EDF has managed to maintain a steady 38,000+ reviews as of writing this and a ‘great’ 4.2 / 5 rating. User reviews typically cite EDF’s attentiveness in phone conversations and that they promptly solve issues. Ultimately, for the most part, they remain a stable and trustworthy company.
EDF offers four green tariffs for business electricity depending on how dedicated your company is to the sustainability mission. However, Which's November 2022 survey found that just 19% of its fuel is renewable versus 63.1% nuclear. Still, it scored 30% overall in Which's ranking, which is three times better than Utilita.
- Established, well-known 'Big Six' provider is a win for energy security
- Extensive range of contract types available to suit a variety of business electricity requirements
- Offers a 7% discount to businesses that pay for electricity with direct debit
- Most expensive unit rate and standing charge of the four suppliers we reviewed
- Has received a lot of customer complaints according to a Which? consumer survey
How has the war in Ukraine affected electricity demand and pricing?
Over a year on from the war in Ukraine, and the conflict has generated a sharp increase in utility bills. Business electricity rates have been hit hard. One business owner told Startups that they have had to move online as a result of unaffordably high overheads.
Although the UK only receives around 3-4% of its gas and electricity from Russia, the country is the leading exporter of natural gas and the second largest exporter of oil. This has resulted in a global shortage of oil and gas, and an increasingly volatile market for the foreseeable future.
The worst part for UK businesses is that there is no price cap on business energy. The Energy Bill Relief Scheme gave business owners financial support with their energy bills for six months from October 1. However, this ended on April 1.
Replaced with the Energy Bill Discount Scheme, companies will now receive an automatic reduction on their bills of up to £6.97 per MWh (megawatt hour). Smaller firms with energy costs below £107 a MWh for gas and £302 a MWh for electricity will not receive any support.
What’s the annual cost of commercial electricity for a small business?
Here, we give an indication of what small businesses can expect to budget for electricity costs on a yearly basis. These are average figures based on the latest UK Government energy prices, updated September 2022.
|Business size||Average annual usage (kWh)||Average unit price (per kWh)||Average standing charge (per day)||Average yearly cost|
Further definitions of business sizes aren’t provided in the sources used to calculate these average figures. However, see below for the definitions from Parliament’s Business Statistics briefing paper from January 2021, which are:
- Micro business: 0-9 employees
- Small business: 10-49 employees
- Medium business: 50-249 employees
Do small businesses pay more for business electricity than big businesses?
In general, small businesses do pay more for their electricity rates than their larger counterparts.
The above chart shows that very small businesses paid 18.64p per kWh for electricity, whereas extra large businesses paid 17.06p per kWh for electricity in Q2 2022. This is according to the Quarterly Energy Prices 2022 Quarter 2 document published by the Department for Business, Energy & Industrial Strategy.
These prices also exclude the CCL (Climate Change Levy), which is one type of environmental tax that your business may be subject to.
As highlighted above, small businesses can expect to pay a lot more for their electricity than bigger businesses. So, as a small business owner, it’s even more important to ensure that you get the best fit for your business when selecting a tariff.
Fortunately, with our 🔍quick and easy quote comparison service, we can offer you access to a range of business energy providers, who can help you make the right decision for your business and budget.
I run my business from home – what should I do about business electricity?
Entrepreneurs who run their business from home (as a sole trader for example) can claim back any energy expenses incurred using the flat rate method.
This is a government-run scheme that allows individuals to claim a set amount of tax relief for the business use of their home depending on the number of hours spent working at home each month.
The rates for utility bills are:
- £10 per month for 25 to 50 hours of at-home business working
- £18 per month for 51 to 100 hours of at-home business working
- £26 per month for 101+ hours of at-home business working
Types of business electricity tariff
An energy tariff is the type of charge you pay for your gas and electricity use. There are two main types: fixed rate and variable, then the less common flexible, deemed/out of contract and eco-friendly.
Knowing which tariff you’re on – or want to be on – can save you a lot of money. You’ll be able to see which types each provider can offer, and compare costs accordingly. Here, we explain some of the most common tariffs, and their pros and cons:
With a fixed tariff, the unit price remains the same for a set period of time. This is usually between one and three years, although it can be as long as five years. This means you’ll know for certain how much per kWh you’ll be paying for your electricity within your fixed period of time.
If the market rate should increase, then you will get to enjoy the benefits of a lower rate than newer customers. However, if this rate should decrease while you’re still in contract, then you won’t benefit from any price drops since the price is fixed at the market rate you started the contract on, and not current events.
The biggest negative when it comes to this kind of tariff is that it can be difficult, as well as expensive, to leave these types of contracts before the agreed end date if you should wish to for some reason.
This type of tariff is ideal for businesses that are likely to have similar levels of electricity usage (and budget) over the next few years, so that they can weather any increases or decreases in price based on the market rate.
Flexible / Variable tariffs
Variable tariffs are usually short-term, so you have greater freedom to switch suppliers when needed. They are typically most suitable for businesses that need to prioritise flexibility above all else, making it a good match for seasonal businesses or those that are just starting out.
As mentioned, the energy bill market rate constantly fluctuates. With this tariff, your unit price fluctuates with it. If wholesale electricity costs go up, as we have been seeing already through this cost of living crisis and the devastating war in Ukraine, so does your energy bill.
That said, when prices drop again (analysts are predicting a market fall in July) at least you’ll be on a tariff that will reflect the change.
Deemed/out of contract
Your business will be put on this ‘tariff’ if you don’t have a contract. These are often the most expensive rates, meaning it’s usually cheaper to have a contract of some kind in place.
Due to the high costs involved, no business should choose to be out of contract. But if you’ve just moved into a new premises and need an electricity supply straight away then you’re likely to find your business automatically put onto this type of tariff. Moving to a fixed or variable tariff should be your first step in this scenario.
What do the experts say?
Rich Price, managing director atTickd, advises:“Ensure you don't fall out of contract. Out of contract rates for businesses can be extortionate and, unlike domestic energy, there isn't a cap on how much can be charged to out of contract businesses. Ensure that you know when your contract is due to expire, and set a reminder in your diary to review prices three months before it's due to end.”
All businesses could benefit from doing their bit to help the planet, but an eco-friendly tariff is especially welcome for businesses who are focused on an eco-friendly or ethical stance. You can include it in end-of-year reporting and marketing materials to demonstrate your commitment to the UK's mission to be Net Zero by 2050.
The benefits of this tariff extend not only of course to the environment. It also helps to maintain a positive business reputation and image. One disadvantage of this type of tariff is that they may not be as cost-effective as other energy contracts.
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Understanding a commercial electricity bill
Business electricity prices are influenced by several factors, including the size of the premises, the number of people in the building, the amount of electricity consumed, and the location(s) of the business. Other factors include your company’s credit score, and any installation charges.
Your electricity bill will be split into two parts:
- Unit cost – measured in kWh (kilowatt hours), this is the amount paid per unit of electricity used by your business
- Standing charge – this is a daily fee that goes towards network maintenance
Note: The unit cost is usually lower on a business electricity plan, but the VAT is higher at 20% (as opposed to 5% for domestic users).
Key considerations when comparing commercial electricity suppliers
Review potential discounts
These incentives will often be in the form of a direct debit discount, offering electricity at a reduced rate, as long as you have a direct debit account set up with the provider.
However, this might not be offered by every provider, and paying by direct debit might not work for every business. In short, always read the small print of any contract. That way, you’ll know exactly what’s going to come out of your account, and when.
Check out customer service ratings
Friendly, helpful people on the phone lines are essential, as is an efficient chatbot /email response rate. It also helps for providers to offer a plentiful amount of information online – if a company’s online resources are looking a little thin on the ground, this could be a warning sign.
How green is your provider?
If keeping it green is important to your company’s image, you’re going to want to do a little digging into how electricity providers generate their power to see if this aligns with how you’re running your business.
Review how much electricity is generated from renewable sources (100% is perfectly feasible), along with what impact it will have on your sustainability reporting. Will you be able to report zero scope 2 carbon emissions, for example?
Sarah Merrick, founder and CEO of Ripple Energy states: “Wind and solar are both the greenest, and now the UK’s cheapest sources of electricity. Make sure you choose a supplier that directly contracts with renewable generators, like Octopus Energy.”
Search for add-ons and extras
Some suppliers provide the power, and that’s it. Others – like Utilita – come with an app, all sorts of advice, and a whole host of other things to accompany your business electricity plan.
An app can be useful in showing you quickly and easily where your business’s weak-spots for efficiency lie. This will help you make your business leaner by cutting down excessive, and unnecessary, electricity charges.
Regional business electricity price variation
Electricity prices can vary considerably between regions. This is caused by a number of factors, including the demand for power in the area, and the cost of distributing it.
For example, the figures below are for our cheapest electricity provider, Octopus' pricing. While the unit rate varies according to location, Octopus charges an average standing charge of 41p per day for electricity.
|Area||Electricity rates (pence per kWh)|
|North Wales, Merseyside; Cheshire||37.62|
|North East England||34.16|
|North West England||35.59|
|South East England||35.4|
|South West England||34.63|
How to switch business electricity suppliers, and why
Switching energy suppliers can help your business to save money, as you can find the very best deal for your current energy requirements. It can also help you to avoid being out of contract and subject to out of contract rates, which as discussed above are often considerably higher than the rates of regular tariffs. Learn more with our guide on how to switch your business energy provider.
Price advises: “Businesses tend to switch their energy a lot less often than domestic customers, but the same premise applies – renewal offers from suppliers are often not the cheapest option, so review your contract regularly, and switch if there are better offers out there.”
We’ve offered a selection of the best business electricity suppliers in the UK, including detailed pricing information. If it’s clear, easy to understand pricing that you’re looking for, Octopus Energy is the best option. It's also the standout provider for renewable energy.
Securing a cost-efficient commercial electricity plan has always been important for small businesses, who tend to pay more than large businesses. But while the war in Ukraine continues to push up global oil prices, there’s even more reason to keep a close eye on your business electricity costs.
While reviewing unit prices and standing charges can help you to get cheap business electricity deals, you should also consider the type of tariff and any available discounts – along with how the electricity is measured and charged – when deciding on a plan.
Startups has more than 20 years’ experience of helping small businesses. We’ve used this expertise to create a 🔍free quote comparison service that connects you with business energy brokers, who you can task with finding the most cost-effective electricity tariff for your business.
Frequently Asked Questions
- How much does electricity cost per month for a business?
Generally, electricity costs are calculated on a yearly basis. However, you could roughly expect to pay between £97.50 and £389.25 per month for electricity, depending on the size of your business. This is based upon the figures in the dedicated annual costs for electricity section above.
- How much is electricity for a small business?
Micro businesses (those with nine or fewer employees) are likely to have an annual electricity bill in the region of £1,200. Small businesses with 10-49 employees can expect to pay up to £2,700.
- Are business electricity rates cheaper than domestic?
Upfront unit rates for business electricity tend to be cheaper than domestic. However, businesses usually pay more VAT (20%), while domestic customers are charged less (5%). Businesses also do not qualify for the Ofgem price cap that has protected domestic customers from surging utility bills, and must pay the Climate Change Levy (CCL). That said, some firms might be exempt for VAT and the CCL.
- Why is my business electricity bill so high?
Energy bills across the UK have skyrocketed as a result of the invasion of Ukraine. Analysts are predicting that costs will drop again in July, but until then, government measures like the Energy Bill Discount Scheme remain in place to help small businesses survive the increase in overheads.
- How do I find a business energy supplier?
It's a good idea to research the top suppliers on the energy market before signing any contract. The 'Big Six' (British Gas, EDF Energy, EON, Npower, Scottish Power and SSE) are a safe option but there are also smaller suppliers, like Octopus Energy, that might be better-suited to your business needs. Startups' specially-designed comparison tool can help you to compare quotes directly.
- Who is the cheapest energy supplier in the UK?
Exact energy costs will differ depending on the location, size, and industry of your business. Tariff type will also impact your final bill. However, our research has found that the best supplier for value for money is Octopus Energy. Its average unit rate is half the price of rivals like EDF Energy, and it also provides 100% renewable electricity across all tariffs.
- Who is the cheapest of the Big Six energy suppliers?
Our research found that E.ON is the cheapest provider for small business electricity rates, although EDF Energy has the most value for money as it scores best for discounts and add-ons. British Gas is the most expensive - its cheapest tariff is higher than all other Big Six rivals.
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