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Is there a business energy price cap?
The energy price cap only protects households, so suppliers can set business electricity and gas prices without a limit. These are the key things to know.
Does Ofgem’s cap apply?
No. The price cap set by Ofgem only covers households on standard variable and prepayment tariffs. Businesses, charities, and public sector organisations sit outside it, regardless of size, so a rise or fall in the domestic cap has no direct effect on business electricity prices or business gas prices.
No support scheme
The last direct support for business energy bills, the Energy Bill Discount Scheme, ended on 31 March 2024 and hasn’t been replaced. There is currently no automatic discount or cap on business unit rates or standing charges.
Your contract sets the price
Without a cap, your price comes down to your business energy contract, your usage and wholesale energy prices when you agree a deal. Running a business energy comparison before your renewal date helps you find the most competitive deal available.
Why are business energy prices not capped?
The price cap was designed specifically for households, and the business energy market works very differently. These are the main reasons businesses sit outside it:
The law only covers homes
The cap is set under the Domestic Gas and Electricity (Tariff Cap) Act 2018, which only applies to household customers on default tariffs. Capping business prices would need new legislation, and so far the government has only used temporary schemes instead.
No standard tariff to cap
Business prices are quoted individually, based on your business energy consumption, meter type, location, credit rating and contract length. With every contract priced differently, there’s no single rate for Ofgem to limit.
Suppliers must cover their costs
Suppliers buy business energy on the wholesale market, often months in advance. A cap set below those costs could force suppliers out of the market, as happened when dozens of energy suppliers went bust in 2021 and 2022.
Is there a small business energy price cap?
No. There’s no price cap for small or microbusiness energy customers, so your rates are set by the contract you agree to. Smaller businesses do get extra protection from Ofgem and the Energy Ombudsman on how suppliers and brokers treat them, with the level of cover depending on your size.
Do microbusinesses receive additional protection?
Yes. When suppliers provide electricity or gas to a microbusiness, they must follow these additional rules:
- No notice to switch: Suppliers can’t require you to give notice before you switch business energy suppliers.
- Shorter rollovers: If your contract rolls over automatically, the new contract can’t last longer than 12 months.
- Clear contract dates: Your bills must show your contract end date.
- Back-billing limit: Suppliers can’t charge you for energy used more than 12 months ago if the billing delay was their fault.
Microbusinesses are defined as those with fewer than 10 employees and a turnover or balance sheet under €2 million, or use under 100,000 kWh of electricity or 293,000 kWh of gas a year.
What about small businesses?
Since December 2024, protection has been extended to small businesses with fewer than 50 employees and a turnover of up to £6.5 million or a balance sheet of up to £5 million. That covers around 99% of firms in Great Britain, and gives you:
- Free dispute help: You can take an unresolved complaint about your supplier to the Energy Ombudsman at no cost.
- Broker complaints: You can also take disputes with your broker to a redress scheme, rather than going to court.
- Approved brokers only: Suppliers can only work with business energy brokers signed up to a redress scheme when arranging small business contracts.
Small business energy rules also apply to an individual MPAN with less than 200,000 kWh of annual consumption, or an MPRN with less than 500,000 kWh of annual consumption.
What protection do business energy customers receive?
Every business energy customer, no matter the size, is covered by basic rules. Suppliers must treat you fairly under Ofgem’s standards of conduct, show any broker commission and costs in your contract, and handle complaints properly.
None of these rules directly limits the price paid by businesses for their electricity and gas.
What happened to government business energy price support?
The government stepped in twice during the 2022 energy crisis, when wholesale prices hit record highs. Both schemes have now ended, and nothing has replaced them.
Energy Bill Relief Scheme
From 1 October 2022 to 31 March 2023, the Energy Bill Relief Scheme gave businesses, charities and public sector organisations an automatic discount by capping the wholesale part of their unit rates at:
- Electricity: 21.1p per kWh
- Gas: 7.5p per kWh
Energy Bills Discount Scheme
From 1 April 2023 to 31 March 2024, a much smaller scheme took over. It only paid out when wholesale prices went above set thresholds, and the discount was capped at:
- Electricity: Up to 1.961p per kWh, where wholesale prices were above 30.2p per kWh
- Gas: Up to 0.697p per kWh, where wholesale prices were above 10.7p per kWh
Both schemes only discounted unit rates, with nothing off business energy standing charges or the climate change levy.
Is more support coming?
There’s no business energy support scheme in place today.
The government has said it’s preparing contingency plans for targeted, temporary help if prices rise sharply, and has announced separate support for energy-intensive manufacturers. Nothing has been announced that covers businesses generally.
What can businesses do without an energy price cap?
With no cap to fall back on, it’s up to you to keep your energy costs under control. These steps will help you pay less and reduce your business energy bills.
Fix your rates
A fixed contract locks in your unit rates and standing charges for the whole tariff, so wholesale price rises won’t affect your bills. Enter your postcode above for instant quotes.
Know your renewal date
Your contract end date and notice period are on your business energy bill. Agreeing a new deal early gives you more choice and keeps you off expensive out-of-contract rates.
Get an energy audit
A business energy audit pinpoints where your business uses the most energy and where it’s being wasted, so you know exactly where to focus to bring your costs down.
Cut your usage
Simple energy efficiency tips for business, like switching to LED lighting and improving heating controls, can lower your usage quickly with very little upfront cost.
Track your usage
Smart meters for business and business energy monitors show your usage in real time, so you can spot spikes and waste across your sites and act before your next bill.
Generate your own
Commercial solar panels cut how much electricity you buy from the grid, lowering your bills and protecting part of your usage from future wholesale price rises.