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What Is Business Energy?

Business energy is the gas and electricity supplied to non-domestic premises, such as offices, shops, restaurants, warehouses and factories. If you operate from commercial premises, or even run a business from home with a dedicated business supply, you are on a business energy contract rather than a household one.

The main difference is the pricing model. Business energy contracts are negotiated directly between you and a supplier, based on your usage, location, credit standing and contract length, rather than sold on a domestic tariff.

Your rate is specific to your business, and this is precisely why it makes such a difference to compare business energy suppliers’ pricing before you agree to a contract.

Why Compare and Switch Business Energy?

There is no price cap on business energy, and the most important difference between domestic and business energy lies in how you are charged for gas and electricity.

Ofgem’s quarterly price cap protects domestic customers, but not business ones. Suppliers set a commercial rate based on wholesale market conditions, your usage profile and your contract terms, which means that two businesses on the same street can end up paying very different amounts for the same energy.

Without a cap to protect you, comparing suppliers with ComparedBusiness is the only real way to avoid overpaying. Businesses allowing a contract to roll on will be transferred onto out-of-contract or deemed rates, which are much higher than anything you would achieve via an active business energy comparison.

Even if you review the market every year or before each renewal, your business could save a lot of money compared with staying on those default rates.

Energy is also one of the few costs you have direct control over. Your energy contract is a lever you can pull at every renewal, while rent, wages, and business rates remain mostly fixed.

For growing SMEs in particular, locking in a competitive fixed rate protects cash flow and makes budgeting far more predictable over the year ahead.

What Makes Up A Business Energy Bill?

Your bill isn’t just about how much gas or electricity you use. Four components combine to determine what you actually pay:

Unit Rate (p/kWh): What you pay for each unit of energy consumed. Rates currently average around 22 to 30p/kWh for electricity and 6.5 to 9p/kWh for gas, depending on business size, sector and region. This rate is as of June 2026 and may change in future.
Standing Charge: A fixed daily fee for keeping your premises connected to the network, charged regardless of how much you use, typically adding £100 to £400 per year per fuel.
VAT: Charged at 20% by default. But if your business uses under around 12,000 kWh of electricity or 52,764 kWh of gas a year, you are eligible for a discounted VAT of 5%.
Climate Change Levy (CCL): A government environmental tax added to most bills at 0.801p/kWh (£0.00801) on both gas and electricity, with relief available for energy-intensive industries through a Climate Change Agreement.

Average Business Energy Bill in 2026

Actual costs vary by usage, sector, region and contract type, but the table below gives a realistic benchmark by business size, based on supplier panel data correct as of July 2026:

Business Size	Annual Gas Usage	Estimated Gas Bill	Annual Electricity Usage	Estimated Electricity Bill
Micro-Business	5000 to 15,000 kWh	£1,136	5000 to 15,000 kWh	£3,079
Small Business	15,000 to 30,000 kWh	£2,295	15,000 to 25,000 kWh	£5,871
Medium Business	30,000 to 65,000 kWh	£4,708	25,000 to 55,000 kWh	£11,511
Large Business	65,000+ kWh	£6,384	55,000+ kWh	£15,596

Note: These figures are approximations; your actual cost will vary.

Types Of Business Energy Tariffs Available

Business energy suppliers offer a wider range of contract structures than domestic providers. Knowing your options will help you to avoid the high defaults and find a tariff that suits how your business works.

1. Fixed Tariffs

Your unit rate and standing charge are locked for the length of the contract, usually 1 to 5 years. This is the most common choice for SMEs because it protects you from wholesale price volatility and makes budgeting straightforward.

2. Flexible Tariffs

As you progress throughout your term, rates can fluctuate with the wholesale market, allowing you to purchase energy in portions rather than one set price.

These are larger deals that are more suitable for high-usage businesses with the capacity to monitor the market and take some risks instead of focusing on savings.

3. Deemed Tariffs

The default rate automatically takes effect if you move into new premises without arranging a contract.

Deemed rates are variable and significantly more expensive than a negotiated fixed deal, so they should be replaced with a proper contract as soon as possible.

4. Single Fuel Tariffs

A contract that covers either gas or electricity only. This helps if you want to shop for each fuel individually, as the cheapest gas supplier is rarely the cheapest electricity supplier.

5. Dual Fuel Tariffs

Gas and electricity are supplied by the same provider under two separate contracts and are billed together for convenience.

In contrast to domestic energy, there is no default dual-fuel discount in the commercial market, so it is still worth comparing each fuel separately before combining them with a single supplier.

6. Flex-Approach Tariffs

A flexible purchasing method that allows a business to buy in stages and in advance, enabling access to wholesale energy rates. This option is usually for larger, high-consumption businesses with half-hourly metering.

7. Pass-Through Tariffs

Your bill is made up of two parts: a variable wholesale energy price and fixed non-commodity costs (including National Grid and TNUoS charges) that are simply passed through at cost.

They are designed for larger companies that are comfortable with some cost fluctuation, as long as they know exactly what they are paying for.

8. Blend-and-Extend Contracts

Your existing supplier brings you a new deal which renews your contract at a rate that averages the price you were formerly paying plus the current price in the market.

This may help in smoothing a renewal if market prices have shot up, but it’s still worth checking against the open market first.

9. Out-of-Contract Rates

The rate applies if your fixed contract ends and you haven’t arranged a new deal. These are variable, unregulated by any price cap, and typically a more expensive way to buy business energy.

The best way to avoid this situation is to compare quotes before your renewal window closes.

10. Rollover Contracts

Some suppliers automatically roll you onto a new fixed-term contract at their standard renewal rate if you don’t do anything.

Many rollover rates are uncompetitive, so it’s worth making a note of your renewal date and comparing the market to see what’s available well ahead of time.

How To Switch Business Energy Suppliers?

It is actually much easier than most business owners think, and it does not disrupt your supply. Here is how the process works:

Check Your Contract End Date and Switching Window: Most suppliers allow you to start comparing a few months before your deal ends.
Gather Your Information: Current supplier’s name, account number, business address, and recent meter reading amounts or annual usage.
Compare Business Energy Quotes: Get a full comparison against the live market rates using your usage info and your postcode against our panel of suppliers.
Sign a Letter of Authority (LOA): This legal document allows a comparison service to represent you without handing over the final decision-making power.
Accept your new contract: Switching typically completes in around 5 days for micro-businesses under Ofgem’s Faster Switching rules, or up to 30 days for larger accounts.

When you switch, your supply is not disrupted. The infrastructure is identical because your new provider simply uses the same cables and pipes as your old one, so nothing happens at a physical level on the property.

Business Energy for All Sectors

Retail

Mechanics

Restaurants

Bars & Clubs

Leisure Clubs

Plus Many More

How To Choose The Right Business Energy Supplier?

Cost is one aspect, but not the only factor. When comparing suppliers, weigh up:

Unit Rates and Standing Charges: Always look at the annualised cost, not just the headline unit rate.
Duration and Flexibility: Shorter fixed terms tend to provide more flexibility, while longer fixed terms tell you what price they will charge over a longer period.
Green Energy: The majority of suppliers now offer 100% renewable electricity tariffs at competitive prices.
Customer Service and Billing Support: Check how suppliers handle disputes, meter issues, and account queries.
Credit Requirement: Business energy suppliers perform credit checks, so your score can significantly affect the bills you receive.
Single vs Dual-Fuel Needs: Decide whether it’s more cost-effective to split gas and electricity across suppliers.

What Can You Compare With ComparedBusiness?

With ComparedBusiness, you can compare:

Business Gas

Compare business gas prices from a panel of UK suppliers, all based on your usage and location, so you’re not stuck on a pricey default rate.

Business Electricity

Compare business electricity quotes, from single-site micro-businesses to large portfolios on half-hourly meters.

Business Water

Since the non-domestic water market opened up, eligible businesses in England and Scotland can also compare and switch water retailers to cut costs on supply and billing.

Why Compare Business Energy Quotes With ComparedBusiness?

At ComparedBusiness, we don’t just compare; we help match your business to the top business energy providers for your unique business needs.

Join businesses who have chosen us for smarter decisions.

We help you identify the most cost-effective solutions quickly.

We connect you to the top Business Energy Providers, ensuring you get the best service.

Catering to a Diverse Range of B2B Business Needs.

FAQs

Is there a price cap on business energy?

No. Ofgem’s price cap only applies to domestic customers. Business energy rates are set by suppliers based on wholesale prices, your usage and your credit standing, which is why comparing quotes before you commit to a contract is important.

Can I switch business energy suppliers before my contract ends?

You can compare and arrange a new deal in advance, but switching typically only takes effect once your current contract ends. Most suppliers open a switching window a few months before the renewal date so you can lock in a new rate early.

What happens if I don’t switch when my contract expires?

You will be automatically moved onto your supplier’s out-of-contract or deemed rates. These are variable, unregulated by a price cap, and usually far pricier than a fixed deal secured through comparison.

How long does it take to switch to a business energy supplier?

Under Ofgem’s Faster Switching rules, micro-businesses can switch in around 5 working days. Larger businesses, particularly those on half-hourly meters, may take up to 30 days to complete a switch.

How much can comparing business energy quotes actually save?

Saving depends on your current rate, but businesses switching away from out-of-contract or deemed rates can save up to 35% by securing a competitive fixed-rate deal through comparison.