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No Standing Charge Tariffs Explained

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If your business only operates seasonally or has infrequent opening hours, a no standing charge tariff could be beneficial.

In this guide, we’ll provide you with advice on no standing charge tariffs and cover the types of businesses that are best suited to them.

What Is A Standing Charge?

A standing charge is a daily fee which is added to your business electricity bill. It covers the costs incurred by your supplier when delivering your energy. If your energy tariff includes a standing charge, you'll pay the daily fee regardless of how much energy you use.

In most cases, standing charges are charged in pence per day. However, some suppliers charge in pounds per month or per quarter.

Average Standing Charge Prices

Generally, standing charge fees are not overly expensive. However, prices can vary with different suppliers.

For SMEs, the daily charge averages at around 28p per day. This may seem inexpensive at first glance. But bear in mind that this charge will be applied every day throughout your contract, so fees can add up.

Paying this fee may not be worth it if your business is not frequently active. In which case, an energy tariff with zero standing charge may be a better option.

Average Standing Charges and kWh Prices

The table below displays the average prices for standing charge and kWh between the years 2017 and 2020.

 

2017

2018

2019

2020

Standing charge

26.51p

26.24p

28.39p

27.00p

Price per kWh

12.99p

13.56p

14.74p

13.26p

The prices shown above are the average yearly rates for a London-based business which uses 10,000 kWh of electricity annually. In 2020, standing charges would add £98.55 to your electricity bill.

What About Business Gas?

You also have to pay a standing charge for your business gas. On average, this fee is around 27p per day, which works as approximately £98.55 per year.

What Is A No Standing Charge Electricity Tariff?

There are business electricity tariffs available with no standing charge. This means that you avoid a daily charge and only pay for the energy you use.

Zero standing charge tariffs are best suited to businesses that run infrequently or seasonally. With no standing charge in place, they won't pay any fees whilst the business is closed.

You should bear in mind that energy tariffs with no standing charge often have higher unit rates. This is to help your supplier cover the cost of omitting the daily fee.

However, businesses are able to save on standing charge costs and benefit from a tariff that better suits their needs.

What Are The Pros And Cons Of Zero Standing Charge Electricity Tariffs?

We've taken a look at the pros and cons of switching to a no standing charge tariff:

Pros

  • No daily fee – this can boost savings.
  • You are only required to pay for the electricity you use.
  • Unit rate costs can reduce after a certain amount of energy has been used.

Cons

  • Unit prices per kWh can be higher in comparison to tariffs where standing charges are applied.
  • These tariffs are not suitable for businesses that use energy frequently.

Is A No Standing Charge Tariff Suitable For My Business?

A zero standing charge tariff could be worth getting if your business doesn’t operate on a regular basis. A business that only opens in winter may want to select a no standing charge tariff to avoid charges in other seasons.

By avoiding a daily standing charge fee, you could make savings and reduce business overheads. This can provide you with a better opportunity to invest in other areas of your company.

How Can I Get A Business Electricity Tariff Without A Standing Charge?

Zero standing charge tariffs are available with a number of energy suppliers. The best way to find the most suitable deal for your company is to compare electricity prices.

Here at Business Energy, we can provide you with a free online comparison of some of the best business energy tariffs on the market. Simply provide your postcode and contact details, and within just a few moments, you’ll receive a free quote with a range of suitable tariff options.

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Percentage energy savings quoted are against customers who let their last contract renew automatically.

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