Average Business Electricity Bills & Prices

Business Electricity Pricing Information

While many of the power companies blame the wholesale electricity market for increases in retail prices, the average unit cost for UK businesses have remained relatively flat.

Variations across the country could account for a 20% difference. Research shows regional pricing mainly affects those in outlying areas with Wales having the highest charges. East and West Midlands with Scotland have some of the lowest tariffs per kWh.

Average Electricity Prices by Business Type

Business Electricity Rates Chart

The table shows averages for the common types of businesses in the UK.

Prices may vary according to your meter type and geographic location.

Business Type

Electric (kWh)

Gas (kWh)

Total Bill

Micro

7,500

5,000

£1,518

Small Business

20,000

15,000

£3,664

Medium Business

35,000

£6,563

Large Business

90,000

75,000

£15,609

Industrial

250,000

500,000

£52,931

Business Electricity Rates Graph

These results are for standard meters with a profile class of 03 or 04. So-called max demand meters with a class of 05 to 08 usually see standing charges rise to as much as 70p per day with the same unit cost per kWh.

Source: BusinessEnergy.com 2018.

Average Electricity Prices by Supplier

Average UK Business Electricity Bills Graph

The graphic below shows average bills by each electricity supplier for business users based in the UK.

Usage and other government initiatives have effectively increased average bills by 100% or more over the past seven years. Current averages across all sectors are as follows:

The average electricity bill for UK businesses is £3,061 per year.
The average unit price per kilowatt hour (kWh) is 14.36p per kWh.
The average daily standing charge is 28p per day.
Most businesses use between 15,000 and 25,000 kWh per year.

Procuring the Lowest Prices

With average bills continuing to rise perhaps it’s time to check you’re not paying too much?

Renewal letters are posted to micro businesses after Ofgem changed their regulations, but this process doesn’t apply for larger organisations. The onus is, therefore, on the contract owner to ensure they’re on the right tariff.

Professional organisations can help procure the process on your behalf to alleviate the burden, save time while managing your cost base.
The majority of new contracts taken over the past two years are for more than one year.
Extended contracts provide fixed prices for the entire period assisting budgeting and peace of mind.
Paying by fixed monthly direct debit offers an additional discount, although other incentives are uncommon.

All businesses also have the option to generate their own power and sell the excess back to the National Grid via Feed-in Tariffs (FIT). The FIT can be used to offset charges from overall usage.

There are over 100,000 traditional half hourly meters that take readings every half hour as well as those customers using max-demand meters under the P272 legislation. All require a lengthy tendering process rather than using instant pricing methodologies.

Current Market Trends

Lower climate change levies, investments in alternative fuel sources and new power stations should at least maintain the status quo.

Increased economic activity leads to higher demand, which if this outstrips supply could undermine the dynamics of the market.

Fixing a contract for a longer term protects end customers from the volatile nature of the market. All small business electricity customers can opt for one to five-year fixed rate contracts from most suppliers.

New controls are unlikely to be put in place, although the regulator will improve the transparency for the end users. Other European countries and the USA have similar market issues and pay far higher rates.

Introducing Efficiency Measures in Your Organisation

Adding an energy monitor onto the meter to visualise live usage.
Changing legacy meters with the new smart meters.
Using management software to analyse trends and peak demand.
Installing A+ grade efficient appliances when replacing older versions.
Ensuring that during the night and weekends all lighting, heating and computers are switched off.

Research shows that 10%-20% reductions in consumption can be achieved just by introducing these fundamental measures.

Average usage is forecast to continue to rise with the continued increase in adopting new technologies by companies. Managing consumption is an area that can also reduce costs.

There are various ways to both monitor and cut consumption, such as the following:

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