How to Find the Best Business Electricity Rates in the UK?

by | Nov 2, 2021

When you’re running a business, you’ll always want the best business electricity rates in the UK, knowing that this could have a huge impact on your finances. After all, electricity and other utilities keep your business operations going, but that shouldn’t mean letting your business electricity spending get out of control.

how to compare business electricity rates in the uk

It’s a good thing it’s possible to choose utility rates that will not leave you overspending. You just need to know what factors to consider before committing to a specific provider for a long-term period.

Understanding the Rates

Different utility plans apply different ways to calculate your total bill. Understanding these differences will help you figure out what works best within your own business operations. This will also help you decide on what the best rates are, as you ask for price quotes and consider your options.

  • Fixed rate

Using a fixed rate means that you can expect almost the same utility bill every month, knowing that your total consumption is being calculated at a constant rate throughout the contract.

The biggest advantage of being under a fixed rate is that you can benefit from the same rate, even when markets change and utility rates go higher. Fixed-rate contracts are also thus usually unaffected by peak rates. However, this also means that when utility rates sink lower than the rate on your contract, you’ll end up paying more than everyone else.

  • Flexible rate

Unlike a fixed-rate contract, having a flexible rate means that your utility rates change depending on market trends. This means that even if your total usage remains consistent, your total bill will still go up and down throughout the year.

As utility costs go higher, your rates increase as well. This means that you might pay more than you want during certain months. However, you also get to enjoy and maximise the months when utility costs are lower.

  • Smart meter

Smart meters record your specific usage and send it to your supplier in regular intervals throughout each day. This makes it easier for you to track your energy use and find ways to cut back depending on the patterns you see.

As the data from your meter is sent to the energy provider every 30 minutes or so, this requires consistent mobile connectivity. This also means that the rate throughout the day could change. If your operations cover peak hours, then this could mean higher rates for you.

There are also unique rate packages depending on your usage. In some cases, for example, you get perks for using renewable energy.

Factors That Affect Electricity Rates

Finding the best business electricity rates in the UK also means knowing what factors affect these rates. This could help you strategise better in terms of your energy usage.

Here are some of the most critical factors that can affect the ever-changing electricity rates:

  • Weather and climate

Severe weather and climates can push energy costs up. When the weather is extremely cold, people turn up their heating. When it’s extremely hot, people turn up the cooling. This heavy consumption can put a strain on utility systems, making it more costly to provide power.

  • Location

Different cities impose different regulations, which could affect the utility rates from one place to another. This is one critical thing that business owners should think about, especially when they want to balance logistics and business electricity costs.

  • Cost of fuel

Fuel is one of the main commodities that allow energy providers to generate and distribute power throughout specific areas. However, the cost of fuel changes depending on the global supply and demand. This directly impacts the average business electricity rates in the UK.

  • Energy source

Some energy sources are more expensive than others. Normally, renewable energy costs a bit more than any non-renewable source. However, the long-term benefits of using green energy also outweigh the cost advantages.

Some energy providers offer special rates for businesses that choose green energy though, so that could be something worth considering. Some also give the option of letting you combine renewable and non-renewable energy.

  • Transmission and distribution costs

Energy providers spend a lot to produce and distribute energy. Part of these costs includes the expense of maintaining their systems, equipment and facilities, as well as upgrading them as needed. Without regular maintenance, the likelihood of power outages increases. This is why energy providers also consider their transmission and distribution costs when they calculate the right rates.

Energy rates will rise and fall – this is a fact of life. Knowing how critical electricity is in running a business, you know that this is something you can’t do without. However, you can always find ways to adapt and strategise to allow your business to save on costs.

Now that you know what factors affect your energy rates, you can think about what factors to consider when you’re looking for the best electricity rates. Call Smarter Business now at 0144 484 7932 and find out how you can save on your business’s electricity costs.

Ways to Reduce Business Energy Costswhere to look for the best business electricity rates in the uk

  1. Conduct an energy audit – One way to cut down costs is to identify which aspect of your business takes up the most energy. You can start reducing those costs if you know what part of your business consumes the highest amount of energy.
  2. Switch to a cheaper provider – Your provider might be one of the reasons why your electricity bill is always high. You can always opt for a cheaper provider to get the best business electricity price deals in the UK.
  3. Turn lights off when they are not in use – It seems simple, but it’s one of the most effective ways to reduce your expenses. Lights that are on needlessly are constantly consuming energy.
  4. Opt for more energy-efficient appliances – Nowadays, many office appliances have include energy-saving models. Using them can work wonders for saving on energy costs.

Factors That Influence Electricity Rates

  1. Location – Local fuel costs and power plant availability are major factors when it comes to the price of the energy you pay. These factors directly affect your electricity rates too.
  2. Weather – Harsh weather conditions, whether it’s cold or hot, can increase the consumption of energy. Increased consumption will inevitably lead to higher electricity rates.
  3. Fuel Costs – The price of fuel may vary depending on your location. Since fuel is the main source of electricity, low fuel prices result in lower overall business electricity rates.
  4. Regulations – Different areas have different rules, which can affect business electricity tariffs in the UK.

Simple Ways to Save Money on Your Business Electricity Rates

  1. Look for cheaper providers – There are around 50 electricity providers in the UK, and all you need to do is look for better small business electricity rates. Although it might take a lot of work, the amount of money you save in the long run will be worth it. Moreover, we at Smarter Business will be more than happy to take some of that burdens off your shoulders.
  2. Be wary of the appliances you turn on – By simply unplugging unused appliances and turning off unnecessary lights, you can save a lot more. Although savings may seem minuscule at first, everything will eventually add up.
  3. Invest in a smart meter – Monitoring your electricity usage and regulating it is one of the best ways to cut down costs when it comes to your electricity rates.

Smart Ways to Minimise Business Electricity Usage

With many business owners looking to cut down their electricity costs, all sorts of cost-saving tips and tricks have emerged. However, not all of them are effective. Here are some of the ways you can reduce your electricity bill without compromising major things in your business.

Use energy-efficient appliances

Buying energy-efficient appliances is worth it in the long run. While they may be costly to buy at first, they help drastically reduce your electricity bill for years to come. Even investing in energy-efficient lightbulbs can help you reduce your overall expenses.

Unplug appliances when not in usewhat is the importance of finding the best business electricity rates in the uk

When it comes to saving on energy bills, it’s a no-brainer to turn off office appliances while they’re not in use. However, even turned-off appliances consume a small amount of electricity. For this reason, it’s ideal to unplug appliances altogether when they’re not being used. When you’re running a large business, even a small drop in electricity usage will help a lot in reducing expenses.

Work with energy-saving experts

Lastly, you can also get the services of an energy consultant. Working with the experts helps optimise your energy usage in various ways, whether by helping you find the best energy deals or suggesting power-saving plans for your business.

With the help of a reliable energy consultant like Smarter Business, you are sure to get more savings that you can allot to other areas of your company. Get in touch with us today!


What is a good rate for business electricity?

What’s considered a “good business electricity rate in the UK” depends on the size of your company. The average electricity rate for all businesses is 11.99 pence per kilowatt-hour (p/kWh). Business electricity rates for small companies can be as high as 16.36 p/kWh, while the largest ones could end up paying as low as 10.09 p/kWh.

Is electricity cheaper for businesses?

The price for gas and electricity is generally lower for business consumers compared to domestic consumers. Companies pay a lower per-unit price for the energy they consume as a result of the volumes and economies of scale. The larger the business, the lower the price per unit that they pay for energy consumption.

How much should I be paying for electricity per kWh?

The unit rate you’ll pay will vary depending on your energy price plan and even the region you’re in. Both gas and electricity are measured in kWh.


The average cost of electricity in most regions is around 14.37p/kWh, while the average gas cost per kWh is around 3.80p.

What is the UK’s average yearly electricity bill?

The average business electricity prices in the UK for the year 2020 was at around £707. On a monthly basis, that clocks at around £59, which is an increase of 1.3% compared to 2019. These numbers are based on the Government’s figures for a yearly consumption of 3,600 kWh of electricity.

What is business energy?

“Business energy” simply refers to gas and electricity used by businesses. The energy industry for most companies involves the research and integration of various energy sources such as oil and gas reserves, drilling and refining. Furthermore, businesses can also utilise a multitude of alternative energy sources such as renewable sources.

How can businesses reduce electricity costs?

You can do so by performing simple steps such as switching off lights and other machinery when they are not in use. You can also save energy by replacing standard lightbulbs with energy-saving ones. If you don’t want to use energy-efficient lightbulbs, you can always opt for a fluorescent lightbulb that uses 10% less energy.

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