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Cheap Business Electricity – A Guide for Start-ups


All businesses need electricity, whether to power a laptop or heavy machinery. Business electricity rates are provided on a case-by-case basis, according to the size of your business, consumption rates, and ever your business location. It’s vital to make sure you’re on the best deal to avoid overpaying. Finding cheap electricity rates for business should be an ongoing process as rates and the market are liable to frequent change.

What affects business electricity rates?

How much energy you use has the biggest impact on the electricity rate for your business. However, energy providers will consider a range of other criteria when deciding on the tariff they deem most suitable. First, they’ll identify the size of your business and your average annual electricity consumption. This will dictate the unit cost (price per unit of energy) you can expect to pay, as well as your VAT rate and any environmental taxes.

Next, your energy provider will consider the location of your premises, the length of contract and the type of tariff you require. With such a variety of business types in the UK, it can be difficult to work out whether you are being provided with a cheap business electricity supply. Instead of looking at annual cost, it’s better to identify whether your business’s unit cost and standing charge are within the correct price bracket.

What should our business electricity rates be?

As mentioned, it’s difficult to identify the best business electricity deal as there are so many variables from one business to the next. Check the following guide to get a rough idea of whether your business is overpaying for its electricity supply. But remember, even if you are within the correct price bracket, you can still cut your costs by improving energy efficiency or by running a business electricity price comparison.

Micro Business:

Average annual usage: 5000 - 15,000 (kWh)

Average Unit Cost: 13 - 13.5p

Standing Charge: 26 - 30p

Annual gas price: £650 - £1,800

Small Business:

Average annual usage: 15000 - 30,000 (kWh)

Average Unit Cost: 11.8 - 13p

Standing Charge: 24 - 26p

Annual gas price: £1,900 – £2,900

Medium Business:

Average annual usage: 30,000 - 50,000 (kWh)

Average Unit Cost: 11.3 - 11.8p

Standing Charge: 21 - 23p

Annual gas price: £3000 - £5,000

Without access to your current tariff or information about the size, location, and energy consumption of your business, it’s difficult to identify exactly how much you could save. What’s important is understanding that a proactive attitude to your energy supply is the only way to ensure you are making the best savings. So, if you haven’t renegotiated your business electricity deal in a couple of years, you will almost certainly be paying over-the-odds.

The energy industry is hugely competitive and getting a business to switch is the holy grail for any energy company. This puts the ball firmly in your court. Running frequent price comparisons is the best way to ensure your business receives a cheap business electricity supply. Energy companies are always looking to outdo one another and often offer new perks and benefits. These perks may be more suited to your energy needs, cutting your costs further.

How much can a cheap business electricity supplier save us?

In business, keeping overheads at a minimum is hugely important for achieving success. For all business owners, the first thing to consider is how much a service will cost. And while cost is obviously important, it’s not wholly indicative of the best deal. It’s worth shopping around a little and looking into the benefits of each business electricity contract, rather than jumping at the cheapest offer. As a quick example, signing up for a 5-year fixed rate electricity supply will be more expensive than a 1-year deal, however, you’ll be locked into those rates for the whole five years. If the market price for energy increases, your business will avoid those added charges.

Finding the cheapest electricity rates for business can become a lengthy, arduous task. It’s best to use an energy comparison site to make sure you are getting the best deal. They have access to the best deals and can save you ringing each energy provider independently. What’s more, they only need a few pieces of information to provide you with the best, accurate quotes.

How to find cheap electricity rates for business?

  • The name of your current electricity supplier
  • The name and end date of your current tariff
  • Your supply type
  • Your annual electricity usage

This can all be found on your most recent electricity bill, making it easy to find cheap business electricity rates. An energy price comparison can almost always help your business, so call our team of business electricity experts now.

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