Our use of cookies Business electricity prices
Compare December 2023 Electricity Rates & Save up to 45% Today
Just enter your business postcode…
How much could you save?
- Receive competitive quotes in minutes
- Compare trusted UK based suppliers
- Best fixed electricity rates from our experts
Business electricity rates – December 2023
Business electricity rates for December 2023. The table below shows the current business electricity rates as indicative averages on a one-year fixed contract business electricity rates for December 2023.
| Size | Annual Consumption kWh | 1 Year fixed elec rate p/kWh |
|---|---|---|
| Small | 10,000 to 50,000 | 27.3 |
| Medium | 50,000 to 100,000 | 25.3 |
| Big | 100,000 + | 25.1 |
Looking for something else? Here are some quick links:
- Average business electricity rates in 2023
- Last 18-months business electricity rates graph
- Business electricity rates calculator
Important note: The information above is based upon the latest published wholesale electricity data but does not represent live electricity prices. Business electricity rates change daily and are location dependent. Use our business electricity prices comparison for your business today.
Source: The above data has been compiled using the following:
- Wholesale electricity rates on the National Grid published by the ICE exchange.
- Three-month rolling average non-commodity rates offered in the commercial electricity market using AquaSwitch quoting data.
Average business electricity rates in 2023
The average business electricity rates in 2023. The table below shows the average one-year fixed business electricity rates offered in 2023 compared to those over the previous two years.
| Size | Annual Consumption kWh | 2021 average rates p/kWh | 2022 average rates p/kWh | 2023 average rates p/kWh |
|---|---|---|---|---|
| Small | 10,000 - 50,000 | 14.62 | 53.37 | 27.41 |
| Medium | 50,000 - 100,000 | 11.89 | 51.37 | 25.42 |
| Big | 100,000 + | 11.69 | 51.17 | 25.20 |
Data source: The information above is based upon the latest published wholesale electricity data published on the ICE exchange and average non-commodity costs measured using AquaSwitch quoting data.
The table shows average business electricity rates since the start of 2023; however, the rates have gradually decreased this year, and cheaper rates are now available in the market.
What is a good rate for business electricity?
A good rate for business electricity, let’s review typical commercial electricity rates. Government energy prices publications show that between 2009 and 2019, the UK manufacturing industry spent between 7 and 10p/kWh on electricity – about 70% cheaper than today’s prices.
Unfortunately, these low historical prices are no longer available due to the continued restriction of Russian gas supply into Europe. See the latest business electricity rates in the table above.
We cannot predict what will happen to electricity rates in the future. Still, we can tell you the best prices today with our business electricity comparison service.
Are business electricity prices falling?
Average business electricity prices have fallen significantly in 2023 but have been largely stable since June 2023.
Unfortunately, most businesses haven’t felt any benefit from these falling prices as the government’s Energy Bill Discount Scheme ended in March 2023.
The recent stability in energy prices does mean that business electricity suppliers are starting to offer significant discounts on their fixed tariff products. It’s a great time to find out what deals are available to your company; start by simply entering your business postcode below.
How much are electricity business rates?
Here is a graph with current business electricity rates per kWh and how they’ve changed over the last eighteen months. Our experts update this graph weekly based on the latest wholesale electricity prices.
Source: Wholesale electricity rates on the National Grid published by the ICE exchange.
How can I get cheaper business electricity rates?
Getting your company the cheapest business electricity rates can feel complicated. Two steps will help you achieve cheaper business electricity prices:
- Get a competitive business electricity deal
- Improve the energy efficiency of your business
Start with getting the most competitive deal on business electricity. There are many business electricity suppliers, all competing to offer the cheapest quotes.
Comparing quotes from various providers is essential to get the cheapest business electricity rates. Provide an estimated annual consumption to get accurate business electricity quotes.
Secondly, using electricity efficiently is vital, whichever deal you choose you’ll pay for each kWh of electricity your company uses. Easy steps like using timers to turn off office equipment and energy-efficient light bulbs will immediately reduce electricity bills. Check out our full guide on electricity-saving tips.
Business electricity prices per kWh
Business electricity prices per kWh peaked in August 2022 and have gradually fallen. Here, we answer the critical questions concerning business electricity unit rates.
Will business electricity prices per kWh drop?
From their peak in August 2022, business electricity prices per kWh dropped sharply but have broadly stabilised since the Spring of 2023.
Independent energy research firm Cornwall Insights forecasts that underlying wholesale electricity rates are likely to drop only slightly through the remainder of 2023 and into the start of 2024.
How much does 1kWh of business electricity cost?
The cost of 1 kWh of business electricity varies depending on several factors. These include your supplier, location, tariff, and the state of the wholesale electricity market.
In the last year, the market’s cost of 1 kWh of business electricity has ranged from 25 to 90 pence.
Find out the current business electricity rates available for your business.
Wholesale electricity prices per kWh in 2023
We publish the latest market trends in wholesale electricity prices per kWh in 2023 monthly on our wholesale electricity price page.
The recent trend of wholesale prices falling presents a big opportunity to save on business energy rates. Ensure you don’t miss an update and check the latest, accurate results by using our service to compare business electricity tariffs today.
What affects the unit costs of your business electricity price per kWh?
There are a lot of direct and indirect factors that affect the unit rate of business electricity price per kWh. Here’s a summary of the key factors:
- Wholesale Energy Prices – The wholesale cost of electricity, determined by supply and demand economics, plays a significant role in unit costs. Changes in power generation availability, weather conditions, and the European energy market all impact wholesale energy prices in Britain.
- Distribution and Transmission Costs – These costs refer to the infrastructure required to deliver electricity from power plants to your business premises. They include maintenance, operation, and upgrade expenses for the electricity distribution network and high-voltage transmission lines.
- Network Charges – These charges cover the costs of using the national grid and local distribution networks. Network operators charge fees for the delivery of electricity and the rental of energy meters.
- Environmental and Renewable Obligations – Government-imposed schemes to promote renewable energy and reduce carbon emissions can influence electricity prices. Costs related to initiatives such as the Renewables Obligation (RO) and Contracts for Difference (CfD) are passed on to consumers.
- Taxes and Levies – Various taxes and levies are added to electricity bills, including the Climate Change Levy (CCL) and VAT (Value Added Tax).
- Supplier Margins – Business energy suppliers incorporate their operational costs, customer service expenses, and profit margins into their unit prices per kWh.
- Contract Terms and Length – The terms and length of your electricity supply contract can impact the unit costs. Fixed-rate contracts provide price stability, while variable contracts are subject to market fluctuations.
- Consumption Profile – Your business’s electricity usage pattern, including peak demand, load profile, and consumption volume, can affect unit costs.
- Capacity Charges – Capacity charges apply to businesses with high electricity demand. They reflect the cost of ensuring sufficient generation and network capacity to meet peak demand periods.
- Regional Variances – Business electricity prices can vary across different regions in the UK due to factors such as network infrastructure, availability of local generation, and supply-demand dynamics specific to a particular area.
Remember that the energy market is dynamic, and prices can fluctuate based on these factors and other market influences.
To get accurate and up-to-date information on business electricity prices, we recommend comparing business electricity and getting tailored quotes based on your specific address and business energy usage.
Business electricity rates calculator
Understanding your business electricity bill can be complicated. On the final page of your bill, your supplier will give you a ‘details of charges’ section showing how each element of your business electricity rates has been calculated.
To help demonstrate how business electricity rates work, our in-house experts have built a handy business electricity rates calculator below. Start by entering a few details about your business electricity supply.
How do you calculate business electricity rates?
Business electricity rates paid to your commercial electricity supplier will come in five separate elements. The business electricity rates calculator will assess each based on your inputs. Here’s an explanation of each element of business electricity prices:
- Standing charges – Nearly all business electricity tariffs come with a daily fixed charge for connecting your property to the grid. Standing charges are calculated by your contracted standing charge multiplied by the number of days in the month.
- Consumption charges – In all cases, businesses are charged for each kWh of electricity they consume. Small businesses typically pay a single rate for all electricity, whereas others pay different rates depending on the time of day.
- Climate change levy – A fixed government tax on businesses to encourage efficient electricity usage. The CCL is charged to all non-micro businesses for each kWh of electricity used.
- Capacity charge – A charge levied against businesses on a half-hourly meter. The charge guarantees a specific electricity import capacity to your commercial electricity supply point.
- Value-added tax – Business electricity rates are taxable under UK VAT laws. Microbusinesses pay VAT at 5%, whereas all other businesses pay at the standard rate of 20% on top of all four charge elements above.
Best business electricity rates from these suppliers
Get the latest business electricity prices from our trusted suppliers. We provide the best rates from the following trusted business electricity suppliers:
Best business electricity prices
At AquaSwitch, our business electricity experts work hard to help businesses find the cheapest business electricity rates. Using our free comparison service, you’ll receive a range of fixed business electricity quotes, ranked cheapest to most expensive.
Here are the key benefits of choosing a fixed business electricity quote:
Cheaper unit rates per kWh
Find the business electricity supplier offering the cheapest price per kWh on their tariffs.
Lower standing charges
Get the lowest standing charges on your business electricity contract to save each day.
Security from a fixed tariff
Lock in competitive commercial electricity prices for up to three years with a fixed-rate tariff.
What are business electricity rates?
In simple business electricity tariffs used by most small companies, there are only two main components of electricity rates to consider. These are the unit rate and the standing charge.
Unit electricity charge
In all business electricity tariffs, the amount you’ll pay will depend on how much electricity your company consumes. A business energy meter at your property will record how much electricity is used as measured in kWh.
Your unit electricity charge will be the kWh of electricity you’ve used multiplied by the unit cost defined in your tariff.
The unit rate is shown in pence per kilowatt-hour kWh. For example, the unit rate could be 25p per kWh.
Daily standing charge
A standing charge is a fixed daily fee on your electricity bills regardless of your electricity consumption.
A fixed standing charge covers the cost of maintaining your connection to the local electricity distribution network and renting your business energy meter.
The standing charge is quoted in pence per day. For instance, 30p/day. For more information, here’s our complete guide to the business energy standing charge.
Can I switch business electricity tariffs?
It’s possible to switch business electricity tariffs when you’ve reached the contract end date on your current fixed tariff or if you’re currently on a standard-variable deemed tariff.
There are hundreds of different business electricity tariffs to choose from in the market, so we recommend using a comparison service to find the best business electricity rates.
Once you’ve found a better business electricity tariff, a simple switch can be completed by signing a contract with your new supplier. Here’s our step-by-step guide to switching business energy.
How to get the best business electricity rates
Commercial electricity suppliers offer a variety of business electricity tariffs that depend on your company size and also change in price daily due to fluctuations in the electricity market.
The best business electricity rates available depend on the following factors:
- Your chosen business electricity tariff.
- The location (region) of your business.
- Your annual electricity usage.
- The current state of the wholesale electricity market.
To see the best business electricity rates tailored for your business, we recommend that you use our business electricity comparison service.
Get the best business electricity deals today.
What affects business electricity rates?
The key factors that affect business electricity prices as a whole and for your business are:
- The wholesale price of electricity
- The cost of electricity distribution and transmission
- Government taxes and levies
- The type of tariff you choose
- Your business’s energy usage
- Your location
You can compare business electricity prices with the AquaSwitch service.
Average business electricity usage in the UK
The most significant factor determining business electricity rates is how much energy your company uses—all business electricity tariffs charge for each kWh of electricity consumed as measured by your meter.
As a guide, here are the annual figures for the average business electricity usage, according to recently published government statistics.
| Business Size | Average Annual Electricity Consumption (kWh) |
|---|---|
| Micro | 7,500 |
| Small Business | 20,000 |
| Medium Business | 35,000 |
| Large Business | 90,000 |
| Industrial | 250,000 |
| Average British Home | 2,900 |
Source: Statistica Business Energy Consumption UK
Business electricity prices – FAQs
Our business energy experts have identified and answered the most common questions surrounding business electricity prices.
What are the latest business electricity rates?
Our latest business electricity rates table above gives a weekly update on the average one-year fixed electricity prices currently available in the market.
These rates are just an average. Find out the electricity rates available for your business today using our business electricity comparison service.
What is the average business electricity bill?
The average business electricity bill in the UK is £1,200 per year. However, this varies from business to business depending on several factors, including the size of your company, location, and usage.
- Micro business: £530 per year
- Small business: £1,150 per year
- Medium business: £1,860 per year
- Large business: £2,570 per year
For a more detailed, accurate view at AquaSwitch, we update the business electricity rates per week. You can find the latest data on business electricity prices above.
Please use your business size, consumption and electricity rates per kWh to calculate an accurate calculation.
Are business electricity rates cheaper?
According to the government Department of Business, Energy and Industrial Strategy, the average home consumes 3,600 kWh, whereas even small businesses typically use 20,000 kWh annually – over five times more.
As with purchasing any goods, the more you buy, the cheaper price you can negotiate. Businesses generally consume much more electricity, so they benefit from better rates for buying electricity in bulk.
For businesses that consume over 100,000 kWh of electricity, suppliers provide bespoke business energy quotes offering lower electricity rates. The latest government energy prices publication shows that the average large business paid 5p/kWh less than the average micro business.
Unfortunately, it’s not all good news for business electricity rates. There are a few reasons why business electricity can be more expensive than an equivalent domestic supply. Read on for more information.
Are business electricity rates cheaper after 6pm in the UK?
Some businesses pay cheaper off-peak electricity rates after 6pm, benefiting from the reduced demand for electricity in the evenings.
However, businesses can only benefit from cheaper evening off-peak rates if they have one of the following energy meter types that supports measuring electricity consumption at different times of the day:
- Smart electricity meter
- Half-hourly meter
- Two-rate meter (supporting an Economy 7/10 tariff)
- Three-rate meter (Supporting an Evening & Weekend and Night tariff)
Secondly, checking the precise terms of your business electricity tariff is necessary. Your tariff will define what times of the day you will pay cheaper off-peak rates. On some tariffs, off-peak rates may start at 6pm, while others will start later in the evening.
Are business electricity rates more expensive?
Commercial electricity prices can be more expensive than consumer prices due to two additional charges that businesses need to pay:
- Businesses pay VAT at the standard rate for electricity, whereas households pay electricity at the reduced VAT rate of 5%.
- Businesses contribute to the climate change levy on their business electricity bills, currently at a rate of £0.775p/kWh.
Additionally, out-of-contract commercial electricity rates are not protected by a business energy price cap, whereas domestic electricity rates are. Deemed contract rates in business electricity are typically much more expensive than the equivalent household rates.
How can I find out more about business electricity prices?
Here are the steps we suggest to take to ensure you get the latest information on business electricity rates:
- Firstly, contact your current business electricity supplier. Your current supplier can inform you about their current business electricity tariffs and prices. They may also be able to offer you a discount if you renew your contract with them.
- Compare business energy prices from across the market. Comparing different suppliers is a good way to get an idea of what the current market rates are and to find the best deal for your business.
- Read industry publications. There are a number of industry publications with information about business electricity prices. These can be an excellent way to stay up-to-date on the latest market trends.
What’s the annual cost of commercial electricity for a small business?
The annual cost of commercial electricity for a small business can depend on a number of factors. These include:
- Size of the business
- Type of business
- Business location
- Amount of electricity used.
A general rule of thumb, small businesses can expect to pay between £1,000 and £5,000 per year for commercial electricity.
At AquaSwitch, we don’t want you to generalise this, above, we have the latest business electricity rates for you to calculate your annual cost of electricity.
Simply take your annual usage and calculate the cost by multiplying the price per kWh next to your business size to get an accurate idea.
E.g:
A small business that uses 15,000 kWh annually:
15,000 x 25.5p = £3,825 annually.
If you want an exact quote, you can request the latest business electricity prices above.
Do business electricity prices vary by region?
Yes, business electricity prices depend on where your commercial property is located in the country.
Britain has six distribution network operators (DNOs), each operating its own local network of power cables, substations and transformers.
Included within business electricity rates are the distribution costs charged by the local DNO. Some DNOs are more expensive than others, making business electricity prices dependent upon your region.
What is a kWh?
A kWh is a “Kilowatt-hour”, a measurement unit used by utility companies to monitor how much electricity (or gas) business premises has consumed. A kilowatt (kW) is a universal measure of electricity usage.
kWh is always quoted on your business electricity bills and shows you exactly how much you have used.
Here’s our full article on calculating business electricity consumption.