Business electricity prices

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Business electricity prices – June 2024

We present the current business electricity prices for June 2024. The table below displays the average one-year fixed commercial electricity rates available over the last seven days.

Important note: The data below is based upon weekly published wholesale electricity data but does not represent live electricity prices. Business electricity rates change daily and are dependent on location. Request electricity prices for your business today.

SizeAnnual Consumption kWh1 Year fixed elec rate p/kWh
Small10,000 to 50,00023.3
Medium50,000 to 100,00021.3
Big100,000 +21.1

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 2024

The average business electricity prices in 2024. The table below shows the average one-year fixed business electricity rates offered in 2024 compared to those over the previous three years.

SizeAnnual Consumption kWh2021 average rates p/kWh2022 average rates p/kWh2023 average rates p/kWh2024 average rates p/kWh
Small10,000 - 50,00014.6253.3727.2922.97
Medium50,000 - 100,00011.8951.3725.3020.96
Big100,000 +11.6951.1725.0920.77

Data source: The information above is based upon the latest published wholesale electricity rates published on the ICE exchange and average non-commodity costs measured using AquaSwitch quoting data.

Current business electricity rates

Here is a graph with current commercial 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.

Latest business electricity rates graph 19 June 2024 update

Source: Wholesale electricity rates on the National Grid published by the ICE exchange.

Business electricity prices quick links:

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What is a good rate for business electricity per kWh?

Before COVID-19 and the conflict in Ukraine, a good electricity rate was less than 10p/kWh – about half the price of current business electricity prices.

These low historical prices are no longer achievable due to the continued restriction of Russian gas supply into Europe.

The electricity market is volatile, with prices changing daily. Use our business energy comparison service to request quotes from a range of suppliers and secure the best business electricity rates available today.

💡Government energy prices publications reveal that between 2009 and 2019, the UK manufacturing industry’s electricity costs ranged from 7 to 10p/kWh.

Are business electricity prices falling?

Business electricity prices sharply declined in the first half of 2023 but have since stabilised.

However, prices remain high due to the national grid’s reliance on expensive natural gas imports.

In 2023, gas-fired power plants produced 32% of Great Britain’s electricity. A considerable portion of this natural gas was imported from the following expensive sources:

  • European gas – Since the outbreak of the conflict in Ukraine in 2022, Russia has starved Europe of its usual plentiful and cheap supply of natural gas, pushing up prices.
  • Liquid natural gas – To compensate for the reduced availability of Russian Gas, the UK has started to import expensive LNG by ship from the USA and Qatar.

Market analysts anticipate that business electricity prices will remain largely unchanged for the remainder of 2024 and into the first half of 2025.

Although business electricity prices are expected to remain stable in 2024, global events, such as escalations in the conflicts in Ukraine and Gaza, could rapidly increase energy prices again.

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:

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 business energy saving tips.

Small business electricity prices

Most small businesses prefer the simplicity of a fixed business electricity tariff, which secures a favourable unit rate per kWh of electricity.

At AquaSwitch, we assist small businesses in finding the most competitive business electricity rate per kWh. Here’s how our straightforward process works:

<h3>Enter your business postcode</h3>

Enter your business postcode

Enter your postcode, along with a few details about your commercial property, and we’ll search the market for the latest prices.

<h3>Compare fixed electricity prices</h3>

Compare fixed electricity prices

Compare your renewal quote against the best business electricity prices offered by our panel of suppliers to see how much your business could save.

<h3>Complete a simple switch</h3>

Complete a simple switch

Our experts will manage a seamless transition of your electricity tariff to your new supplier, ensuring you benefit from lower business electricity rates.

Business electricity prices per kWh

A kWh (kilowatt-hour) of business electricity represents one unit supplied to a commercial property. In business electricity tariffs, there is always a unit charge for each kWh of electricity consumed by a commercial property.

Our latest business electricity prices table above displays the current market rate for 1 kWh of electricity.

Numerous direct and indirect factors influence the unit rate of business electricity per kWh. Below is a summary of the key factors:

  • Wholesale Energy Prices – The wholesale cost of business 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.
  • Supplier MarginsBusiness energy suppliers incorporate 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.
  • Regional Variances – Business electricity prices can vary across different regions in the UK due to network infrastructure, availability of local generation, and supply-demand dynamics specific to a particular area.

We recommend requesting tailored quotes based on your specific address and energy consumption to get accurate and up-to-date information on business electricity prices. Start by entering your postcode above.

What are business electricity rates?

In simple business electricity tariffs used by most small companies, there are only three components of commercial electricity rates to consider – the unit rate, standing charges and taxes. Below we’ll explore each element:

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 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.

Capacity charges

Capacity charges are incurred by any business equipped with a half-hourly electricity meter.

These charges are levied by your local electricity distribution network provider to ensure a guaranteed power capacity for your electricity supply, measured in kVA (kilo-volt-amps).

The capacity charge on your business electricity bill will be listed as a fixed daily charge per kVA of maximum import capacity on your business energy connection.

Please refer to our guide on maximum demand meters for further information.

Taxes and Levies

The UK government levies two taxes on top of business electricity charges, as follows:

  • VAT at the standard rate – Business electricity rates incur a value-added tax fee of 20% on all electricity charges. Note that most businesses are VAT registered and eventually recover their paid VAT as part of their quarterly VAT returns.
  • Climate change levy – Businesses pay an additional tax called the climate change levy (CCL) on top of all electricity bills. The climate change levy is currently charged at 0.775p/kWh.

These additional charges will appear as separate lines on a business electricity bill and are paid directly to your business electricity supplier.

💡In small business energy companies are exempt from the CCL and pay VAT at the reduced rate of 5%.

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 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.

 

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.

Calculating business electricity charges

Business electricity charges paid to your commercial electricity supplier have five separate elements. Our business electricity rates calculator will assess each based on your inputs.

Click each link for more information:

How to get the best commercial electricity rates

Commercial electricity rates are unpredictable, changing daily due to constant fluctuations in the wholesale energy markets.

Despite the uncertainty of future prices, one aspect of the commercial electricity market remains consistent: Business electricity suppliers offer their most competitive rates as fixed electricity quotes, aiming to attract new customers.

To secure the best commercial electricity rates, it’s advisable to shop around every time your fixed electricity tariff ends and make a hassle-free switch to the cheapest deal. Start by entering your postcode above to get quotes for your company today.

For more information, check out our article on whether you should fix energy my energy prices until 2024?

What affects commercial 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 SizeAverage Annual Electricity Consumption (kWh)
Micro7,500
Small Business20,000
Medium Business35,000
Large Business90,000
Industrial250,000

Source: Statistica Business Energy Consumption UK

💡 The average electricity usage of a British home is 2,900 kWh annually.

Business electricity prices and the government discount

In response to the energy crisis in 2022, the UK government launched two schemes that provided automatic discounts on commercial electricity bills:

  • Energy Bill Relief Scheme (October 2022 to March 2023) – A generous, unlimited automatic discount scheme that capped the wholesale element of business electricity rates at 21.1p/kWh.
  • Energy Bill Discount Scheme (April 2023 to March 2024) – A smaller discount of 2p/kWh applied to business electricity rates when the wholesale element of gas tariffs exceeded 30.2p/kWh.

By April 2024, both schemes had concluded and were not renewed. In the absence of these automatic discounts on business electricity prices, finding the most competitive deal is crucial.

Find a better deal on your business electricity rates today with AquaSwitch.

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 various 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

Cheaper unit rates per kWh

Find the business electricity supplier offering the cheapest price per kWh on their tariffs.

Lower standing charges

Lower standing charges

Get the lowest standing charges on your business electricity contract to save each day.

Security from a fixed tariff

Security from a fixed tariff

Lock in competitive commercial electricity prices for up to three years with a fixed-rate tariff.

Business electricity prices – FAQs

Our business energy experts have identified and answered the most common questions surrounding business electricity prices.

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 make 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 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 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 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.

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.

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 have 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 business electricity consumption.