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What Does The Average UK Business Spend on Energy?

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Do you know if your business is overpaying for its gas and electricity?

If you don’t how much you should be paying, it’s impossible to know if you’re getting a good deal.

To help you make sense of what your business energy bills should be, we’ve researched the average cost of gas and electricity.

What is the average cost of business energy?

The two main aspects of energy costs are your unit rate and standing charges.

The unit rate is the cost of each unit of energy used, measured in cost per kilowatt hours (kWh). A standing charge is a fixed daily cost which doesn’t change. It covers the cost of delivering your gas and electricity to your business.

The average cost of business electricity in 2020 is 13.93 pence per kWh. The average cost of business gas is much lower at 2.485 pence per kWh. Business standing charges can range from 23 pence per day to around 27 pence per day.

What affects the cost of my business energy?

The cost of business gas and business electricity depends on several factors, including:

  • The size of your business
  • Where your business is located
  • The number of people you employ
  • The type of service you provide

What is the average micro business energy bill?

A micro business is defined as having between 1 and 9 employees. In most cases, overheads for micro businesses are likely to be low.

As micro businesses use less energy, they will face higher unit rates. In 2020, the average unit rate for a micro business is 16.74 pence per kWh for electricity and 3.925 pence per kWh for gas.

A total gas and electricity usage of 13,000 kWh would give a micro business an average bill of £1,735 per year.

What is the average small business energy bill?

A small business is classed as having between 10 and 49 employees. According to the latest government figures, there are over 200,000 businesses employing between 10 and 49 people.

The average small business unit rates in 2020 are 14.83 pence per kWh for electricity and 2.303 pence per kWh for gas.

With an energy usage of 35,000 kWh, the average small business energy bill would be £3,507 per year.

What is the average medium-sized business energy bill?

Medium-sized businesses are classed as having between 50 and 250 employees. Energy usage is likely to vary for medium-sized businesses. It’s important bear that in mind when comparing energy costs.

The average medium-sized business will use 40,000 kWh of electricity and 35,000 kWh of gas per year. At 13.86 pence per kWh for electricity and 2.228 pence per kWh for gas, they would face an average yearly bill of £6,462 per year.

What is the average large business energy bill?

Large businesses are defined as any business with over 250 employees. Large businesses will pay a lower unit rate due to their high energy usage.

The average large business unit rates in 2020 are 12.93 pence per kWh for electricity and 1.925 pence per kWh for gas.

At a total energy usage of 155,00 kWh, an average large business energy bill would come to £11,978.

Due to their high energy usage, it’s important for large business to get specialist advice when switching.

At Business Energy, we have a specialist large business team to help you find the best energy deals to meet your exact requirements. Our experts can provide advice on:

How can I reduce my business energy bills?

The fastest way to reduce your business energy bills is to switch supplier for a better deal. However, many businesses are reluctant to switch their energy supplier.

In fact, recent research has found that half of SMEs won’t switch their energy supplier with 51% considering the process to be too complicated.

22% of SMEs believed that switching supplier would be too expensive. Incredibly, 51% said switching energy supplier is harder than a tooth extraction or firing people.

Why it’s important to switch business energy supplier

With businesses believing switching energy supplier is worse than pulling teeth, many will be left overpaying for their energy bills.

Businesses who have not renegotiated their energy deal could be on out of contract rates. These are much more expensive than negotiated rates.

By switching suppliers, you can compare the latest deals from a wide range of energy suppliers. It’s worth keeping in mind that the average business energy bills won’t be the cheapest available.

At Business Energy, we can manage the entire switch on your behalf. This includes finding a deal to match the needs of your business. We’ll also be there to work with your new and old supplier to arrange a smooth switch.

Ready to compare business energy prices? Find out how much you could save by completing our online comparison form.

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

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