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Average Business Energy Bills in the UK 2020

There’s no greater time than now to save on your business energy bill. In fact, Inenco found that UK businesses could be overpaying by as much as £500m on their annual energy bills.

Here’s the good news.

You can easily lower the cost of your annual energy bills by following some simple measures, understanding your business profile, and finding the best business energy suppliers.

Simply keep on reading to find your solution.

Average Business Energy Bills

Average Business Gas Bills

Business Size

Average Price (p/kWh)

Average Standing Charge (p/Day)

Average Annual Bill

Micro

3.06 – 3.40p

23.42 – 29.45p

£400 – £820

Small

3.06 – 3.20p

23.42 – 33.12p

£820 – £1,458

Medium

3.05 – 3.58p

33.12 – 39.98p

£1,458 – £2,239

These figures are accurate as of May 2020 and are to be used as examples and estimates of business energy prices. They reflect businesses in London with the postcode E1 7AA. Micro Business prices were found using an average estimate of £500 per year in gas spending. Small Business prices were found using an average estimate of £1100 per year in gas spending. Medium Business prices were found using an average estimate of £1800 per year in gas spending.

Average Business Electricity Bills

Business Size

Average Price (p/kWh)

Average Standing Charge (p/Day)

Average Annual Bill

Micro

12.56 – 13.16p

20.23 – 26.53p

£900 – £2,244

Small

12.56 – 13.24p

20.23 – 27.34p

£2,367 – £3,660

Medium

12.63 – 13.21p

20.23 – 27.34p

£3,774 – £7,234

These figures are accurate as of May 2020 and are to be used as examples and estimates of business energy prices. They reflect businesses in London with the postcode E1 7AA. Micro Business prices were found using an average estimate of £1200 per year in electricity spending. Small Business prices were found using an average estimate of £3000 per year in electricity spending. Medium Business prices were found using an average estimate of £5000 per year in electricity spending.

Business Gas & Energy Consumption

The key consumption differences between Micro, Small, and Medium Businesses are as follows:

Business Size

Annual Electricity Consumption (kWh)

Annual Gas Consumption (kWh)

Micro

5,000 – 15,000

5,000 – 15,000

Small

15,000 – 25,000

15,000 – 30,000

Medium

25,000 – 50,000

30,000 – 65,000

As shown, Micro and Small Businesses have understandably lower energy consumption due to employing less workers and producing fewer output.

Breaking down your Energy Bill

It is important to understand the different costs within your energy bill. This way, you know exactly what you are paying for and how you can cut your business energy costs.

Unit Rate

The price for each unit of energy that you use. The Unit Rate is usually in pence per kilowatt hours (p/kWh). This makes up the bulk of your energy bill and is multiplied by the amount of energy your businesses uses.

Standing Charge

The Standing Charge is the cost for your business to gain access to the energy provider’s supply of electricity or gas. This total is calculated per day and is not affected by how much energy you use.

You may have already noticed that although most business electricity tariffs include a standing charge, some business gas tariffs do not. This is simply because it is usually included in the energy supplier’s unit rate.

Climate Change Levy (CCL)

The Climate Change Levy is an energy tax your business pays for using non-renewable energy. It acts as an incentive for you to switch to using a renewable, eco-friendly energy source that would allow you help the environment while pocketing some savings.

VAT

Businesses in the UK pay a 20% VAT on goods including energy.

Wholesale Energy Cost

The cost for your energy supplier to purchase large quantities of gas and electricity from producers. This Wholesale Energy Cost is also a large portion of your business energy bill.

Transmission & Distribution Cost

In order to receive and use energy, you need to pay for electricity and gas distribution networks to transport that energy from the source to local energy networks and meters.

Supplier Operating Cost

Any operating costs for the energy supplier are passed on to you, including metering costs, supply of meters, and meter readings.

Business Sizes

As of 2020, the UK Government reported that there are around 5.86 million SMEs in the country. They make up 99.9% of all businesses in the UK, with 96% being Micro Businesses. Therefore, it is easy to see why understanding your business energy bills is so important as SMEs make up the majority of business energy users.

Let’s take a look at how businesses are classified and how much energy they consume:

Business Size

No. Employees

Annual Turnover

Average Electricity Consumption (kWh/year)

Average Gas Consumption (kWh/year)

Micro

0 – 9

< £632,000

5,000 – 15,000

5,000 – 15,000

Small

10 – 49

< £6.5million

15,000 – 25,000

15,000 – 30,000

Medium

50 – 249

< £12.9 million

25,000 – 50,000

30,000 – 65,000

How Do You Find The Best Business Energy Prices?

As a small business owner, you know how important it is to save costs wherever you can. This is why it is a smart idea to regularly search up which energy suppliers are offering the best deals, and how to switch.

However, when you are busy running your business it is often difficult to find the time or resources to scour through website and website.

That’s where we come in.

Our team of experts has done the work for you and found the top business energy suppliers with the best deals.

If you prefer to compare between the different deals picked out for your business, use our quick and free comparison tool. This way, you will have no doubt left that you have picked the right supplier.

How much energy does my business consume?

In 2018, non-domestic energy use consisted of 81% of total energy consumption in the UK. From this number, 25% of energy consumption came from businesses in the services sector while 16% came from the industry and manufacturing sector.

Source: Gazprom Energy and UK Government, Energy Consumption in the UK (ECUK) 2019

What this means is that if you are a business in these sectors, you are likely to be consuming a higher amount of energy each year. So clearly, saving energy costs and finding the best business supplier is absolutely vital.

Businesses in the services sector include:

  • Hospitality
  • Food and Beverage
  • Retail and Commercial Businesses

Businesses in the industry and manufacturing sector include:

  • Chemical Manufacturing
  • Food and Drink Manufacturing
  • Iron, Steel and Metal Manufacturing
  • Mineral Products Manufacturing
  • Printing and Publishing

If you fall under these sectors, it is definitely a good idea to check if you are overpaying for your business energy. Chances are that you could be spending less for the amount of energy that you use.

Check out our free and fast comparison tool to receive an instant energy quote for your business.

How to reduce your Business energy bills

Invest in a Smart Meter

Avoid being overcharged by receiving accurate meter readings. Smart Meters record energy consumption much more frequently and send daily reports.

Find the Best Business Energy Supplier

There are over 50 business energy suppliers in the UK, each offering multiple tariffs. To avoid wasting your time finding the best one on your own, why not check out our guides on the best energy providers in the UK?

Go Green

Avoid energy taxes such as the Climate Change Levy (CCL) altogether by switching to renewable energy. Not only will you be saving the planet, but you will also be able to take advantage of government tax incentives.

Don’t know where to begin? Have a read of our Green Business Energy guide to find out the top renewable energy suppliers in the UK.

Become More Energy Efficient

Invest in newer office equipment that use less energy and translate into more savings. A one-time purchase of newer, smarter computers or lighting will pay off every month in your energy bills.

Change behaviors e.g. switch off computers when not in office

Encourage energy efficient practices in your office so that every employee contributes to reducing energy consumption. This can be switching off and unplugging computers when not in the office or turning off the lights in rooms that are not being used such as bathrooms or break rooms.

Use direct debit

It is not uncommon for energy suppliers to offer discounts when you choose to pay with direct debit. Setting up automatic payments makes their life and yours a lot easier.

Key Points to Remember

  • Know your business type, annual consumption and spending on energy before selecting a supplier.
  • Explore easy ways to reduce your energy bills such as using smart meters and energy efficient equipment.
  • Compare business energy suppliers and tariffs to understand all of your options.

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