Want to cut your business energy costs? You’re not alone. Business electricity rates can eat into profits. This guide shows you how to pay less and save more.
What Are Business Electricity Rates?
Business electricity rates are what companies pay for using electric power. Unlike home rates, these change based on size and type of business. Big factories often pay less per unit than small shops. Why? Because they use more electricity.
Businesses also sign different contracts than homes. These contracts last longer—some up to five years. This can mean savings if you lock in a low rate.
Why Are Business Electricity Rates Higher Than Residential?
Businesses often pay more per unit than homes. Here’s why:
- They use more energy at peak hours.
- They need a steady, reliable supply.
- They also pay extra fees, like standing charges.
For example, a small restaurant may pay 20p per kWh. But a large company might pay 14p because they use more. So, bigger sometimes means better rates.
How Business Electricity Rates Work
There are key parts of a business electricity bill:
- Unit Rate – How much you pay per kWh (kilowatt-hour).
- Standing Charge – A daily fee just to stay connected.
- Contract Length – Short contracts let you change quickly. Long ones can lock in lower prices.
- Time of Use – Rates go up during busy times (like 9am–5pm).
Some contracts offer fixed rates. Others are flexible. In 2022, UK fixed business rates averaged 29.5p per kWh, while flexible ones ranged between 24p–35p. That’s a big difference.
Real Life: How Companies Saved on Electricity Rates
Case Study: The Local Café
- Location: London
- Size: 6 employees
- Electricity used: 30,000 kWh/year
- Previous rate: 21p per kWh
- Switched to: 17p per kWh fixed rate with a 2-year contract
Yearly Savings: Over £1,200
The owner said, “It was like giving myself a bonus.”
Case Study: The Manufacturing Plant
- Location: Birmingham
- Size: 50+ employees
- Electricity used: 500,000 kWh/year
- Old rate: 15p per kWh on a flexible contract
- New rate: 13p per kWh fixed for 3 years
Total 3-Year Savings: Close to £30,000
These are just two examples. Thousands of businesses in the UK have cut costs this way.
What Affects the Price You Pay?
Electricity prices for businesses depend on several things:
- Size of Business: Bigger users get better deals.
- Location: Rural businesses may pay more due to higher delivery costs.
- Type of Meter: Smart meters offer better tracking and can work with cheaper plans.
- Supplier Fees: These vary a lot. Always compare at least three providers.
- Energy Use Patterns: Use most power at night? You might qualify for off-peak savings.
Did you know? Businesses that shift usage to off-peak times save up to 15%.
How to Find the Best Business Electricity Rates
You don’t have to guess when picking a power plan. Here’s how:
1. Compare Rates Online
Use websites like:
- UswitchforBusiness
- Love Energy Savings
- Energy Helpline
These sites let you compare prices quickly. In 2023, some businesses saved 40% this way.
2. Contact Suppliers Directly
Go old-school! Ring up providers and ask for quotes. Ask for:
- Fixed vs Variable rates
- Early exit fees
- Discounts for smart meters
3. Use a Broker
Brokers do the hard work for you. They find and negotiate deals. Just make sure they are independent and not tied to one supplier.
When to Switch Electricity Providers
The best time to switch is when:
- Your current deal is ending
- You’re moving office
- Prices drop in the market
Avoid switching mid-contract unless the savings cover exit fees. Most suppliers allow shopping around 6 months before your deal ends.
Energy Market Trends: Why Now is the Right Time
In 2022, UK wholesale energy prices hit record highs. Some businesses saw rates above 50p per kWh. By early 2024, prices fell below 30p for many new contracts.
How?
- More renewable energy in the grid
- Government support for business energy costs
- Lower demand after the energy crisis
That means now may be the cheapest time in years to lock in a deal.
Go Green and Save More
Choosing green electricity doesn’t have to cost more. In fact, it can save money. Many suppliers offer lower rates for taking green energy.
- Some give 5–10% discounts for 100% renewable contracts.
- Customers like eco-friendly brands. It helps your image too.
You can check if your provider offers wind or solar energy. Some even let you track your carbon savings.
Warning: Hidden Fees to Watch For
When picking a plan, check:
- Exit Fees: You may pay if you leave early.
- Metering Charges: Some plans sneak in costs for old meters.
- Standing Charges: These add up over time.
If one plan looks cheaper, check the full costs. Sometimes “too good to be true” really is.
Quick Summary: How to Lower Your Business Electricity Rates
- Check your current rate. Is it higher than the market average?
- Compare deals using online tools or call suppliers directly.
- Lock in a fixed rate when prices are low.
Final Thoughts
You don’t have to overpay for power.
Here’s what to do:
- Compare your current rate with market averages.
- Pick a plan that fits your business and energy use.
- Lock in lower prices when trends are in your favor.
Spend 30 minutes now and save thousands each year. That’s smart business.
Rahul Kumar is a passionate educator, writer, and subject matter expert in the field of education and professional development. As an author on CoursesXpert, Rahul Kumar’s articles cover a wide range of topics, from various courses, educational and career guidance.
