Small Business Energy

Small business energy prices

Small businesses have suffered from expensive energy costs over the past two years. The war in Ukraine kicked off an unprecedented rise in energy costs that peaked in Autumn 2022.

Since then, prices have eased but remain approximately twice as high as the historical average.

💡Small business energy rates are more complicated and less protected tha domestic energy. Check out our article on domestic vs business energy.

Average small business energy rates

The table below shows the latest average one-year fixed business electricity rates for small businesses. These business electricity rates have been put together by our experts using the latest wholesale electricity prices on the national grid.

It’s important to note that small business electricity prices can vary from region to region.

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.

Small business energy tariffs

Small business owners typically have two main options for business energy tariffs: a fixed-rate energy contract, which offers certainty over the cost of each kWh of electricity, and a variable tariff, whose rates fluctuate based on the latest market conditions.

Continue reading to explore the pros and cons of each of these types of business electricity tariffs.

Fixed-rate small business energy tariff

Here are the two biggest reasons to consider a fixed-rate small business electricity plan:

• Simplicity – Fixed rate business electricity is the simplest to understand and manage. Throughout your contract, you’ll pay a fixed unit rate per kWh of electricity consumed plus a daily business energy standing charge. The simplicity means that it is easy to forecast your business electricity costs based on your actual usage for the year.
• Certainty – The price of electricity can fluctuate widely with geopolitical events. A fixed-rate small business electricity tariff protects your business from rising energy costs.

Variable-rate small business energy tariff

Here are the two primary reasons to consider a variable-rate business electricity plan:

• Flexibility: Unlike with a fixed business energy contract, you have the option to switch business electricity suppliers at any time, thereby avoiding expensive early termination fees.
• Benefit from Falling Prices: Businesses on variable rates can benefit from decreasing business electricity prices, potentially lowering overall costs.

It’s important to note that fixed-rate electricity tariffs for small businesses are usually more cost-effective, as suppliers aim to attract new customers by offering competitive rates.

For more detailed information, check out our full article on business energy tariffs.