Compare Business Electricity Rates (Get 2025 Live Prices)

Energy prices have been a challenge for UK businesses over recent years. With no cap in place to limit how much suppliers charge, you need to understand how business rates are calculated and what you can do to reduce your costs.

Wholesale prices are falling drastically compared to their peak in 2022, with 2025 offering some of the cheapest electricity prices in recent years. However, the actual rates offered by suppliers are still fluctuating, so it’s important to shop around to find the most competitive deals.

Researching the best deals on your business electricity is about looking at more than just wholesale costs – you need to know all of the factors that influence a supplier’s quote, what the market average is and which tariff is right for you.

To help you make the best decision, we’ve put together a comparison of electricity rates from UK suppliers alongside a guide to business electricity rates. On this page, you’ll get answers to questions such as:

• What does a supplier use when calculating quotes?
• What do unit costs and standing charges mean?
• Are business electricity prices getting cheaper?
• What are the cheapest electricity prices on the market?

Keep reading to start saving money on your business electricity rates in 2024 and beyond.

How business electricity pricing works

The pricing structure for business electricity is entirely different to consumer rates. Each business has unique energy requirements, so suppliers will create bespoke quotes when you contact them.

Pricing for business electricity is calculated differently from household bills, with the actual electricity cost per unit typically cheaper than a domestic rate – but you’ll pay a higher VAT rate. Your total rates comprise two different costs:

• Unit cost: The price of each unit of electricity you use, measured in kWh
• Standing charge: A daily fee that accounts for the cost of transporting electricity to your premises and maintaining the national grid

Recognising both of these costs and how they affect your rates is important. If, for example, you install lots of electricity-saving measures, but you’re on a contract with a high standing charge, you won’t see much benefit from a reduction in unit costs. On the other hand, if you’re a business that uses lots of electricity, a slight decrease in unit cost per kWh will have a far greater impact on your overall bills.

What goes into a business energy rate quote?

Suppliers are usually tight-lipped about the factors used to produce quotes. They’ll tell you that the rate terms depend on the size of your business and estimated energy consumption. (That’s one reason why steelmakers and other manufacturing facilities that use a lot of power had to close during peak pricing hours in 2021.)

However, those aren’t the only things that contribute. We can reveal that business electricity rates are also made up of:

• Wholesale energy cost
• Cost of transmission and distribution
• Levies – typically environmental and social obligations
• Supplier operating costs, also known as metering costs
• Supplier margin
• VAT

These factors all contribute to your overall business electricity price, which is why any changes in wholesale pricing have a lasting impact on your bottom line. Some companies also offer new rates for larger businesses that consume over 150,000 kWh that are willing to switch to green electricity to increase their corporate social responsibility standing and reduce their carbon footprint.

Choosing a business electricity tariff

Rates aren’t the only thing you need to decide between. When you’re shopping for business electricity, you’ll notice different arrangements, which include:

• Fixed-rate tariffs: Fixed business rates see you enter into a contract with a supplier with a pre-agreed price across a period, usually two years. Fixed rates are often the cheapest option, but make sure you compare before agreeing to any single supplier’s offer to ensure you’re getting the best deal.
• Variable-rate tariffs: Variable rates are similar to fixed-rate contracts in terms of length, but they are more exposed to the market price for electricity. These tariffs vary up or down depending on the market conditions.
• Out-of-contract rate: If your fixed deal expires and you haven’t renewed or replaced the contract, a supplier will place you on their out-of-contract rate, which is usually much more expensive than their fixed rate plan. You can switch out of this by giving them 28 days notice. These are also called deemed rates and automatically apply when a business moves into a new premises that has no previous contract in place.
• Rollover tariff: Some suppliers will place you into a rollover tariff if you haven’t agreed to a new deal, establishing a one-year contract with a higher unit price.

Compare business electricity rates by supplier

Using deemed rates to establish a baseline

We’re looking at deemed rates to identify which suppliers offer the best prices because they’re the most standardised form of data available from suppliers. Deemed rates are those rates given by a supplier when you come to the end of a contract and have not negotiated a new contract or switched to a new supplier. Also known as ‘default’ rates as these are the rates you’ll default to if you don’t take action.

Deemed rates are based on the wholesale market price and will fluctuate. Therefore, most suppliers will contact you to notify you of any price changes and to discuss contacts. If your contract period ends, the supplier will move you onto deemed rates rather than cut off your supply.

Contract rates are usually cheaper and more competitive as they give the energy supplier more security around consumption, volume and timescales for your supply – but suppliers don’t offer this information readily until you’ve approached them, so it’s more effective to use deemed rates as a comparison.

You won’t want to remain on deemed rates, however, as they’re the more expensive option. Switching between rates and suppliers is the best way to find a good deal.

Supplier rankings sorted by relevance

We’ve taken all of the main energy suppliers in the UK into account and then devised a system to compare their provided rates accurately. Where available, we’ve listed each supplier’s London deemed rates, whereas for others, we’ve chosen their standard lowest-cost non-half hourly meter rates.

The table below allows you to compare deemed business electricity rates, breaking the costs down by:

• Unit price: The cost of electricity in pence per kWh
• Standing charge: The fixed daily cost in pence for your electricity regardless of usage
• Trustpilot review score: An indication of the company’s reputation in the eyes of consumers. We’ve used business ratings where possible, but some ratings do come from homeowners.
• Geographical dependency: does this supplier only offer energy in a particular region?
• Sustainability: Is the company 100% renewable? This can be an important factor for companies aiming to reduce their carbon footprint.

Is business electricity getting cheaper?

Yes – business energy is getting cheaper, much to the relief of many UK businesses who have struggled with rising costs over the past few years. As wholesale costs fall, so too does the rate offered by suppliers.

The only exception is if you were tied into a long-term fixed rate deal before energy prices began to rise sharply in 2021. In such a case, a business might find that new deals in 2025 are more expensive than their 2021 fix.

For the vast majority of businesses, however, prices are now falling rapidly compared to recent years. To find the best price, you’ll need to determine the size of your business to compare average rates offered by suppliers. You should also pay close attention to any additional charges or fees that can creep into some supplier rates..

As of November 2025, businesses pay between 26.1p to 29.6p per kilowatt hour (kWh) plus an average 70p per day as a standing charge. Rates depend on annual usage and exclude VAT and Climate Change Levies. Below is a chart showing how prices change as usage increases.

Note: Prices from November 2025 based on quotes from the past 12 months.

Outside of fixed-rate contracts, however, prices are more volatile and variable. Even here, however, there are signs that 2026 will bring customers better electricity prices.

Electricity price predictions moving forward

What suppliers can charge their business customers depends largely on the wholesale market price. According to this graph from Ofgem, prices are trending downwards at a rapid rate, bringing some welcome drops to customers in 2025. Current pricing has fallen drastically from 2022’s peaks, with the UK benefitting from increased wind capacity and better access to gas-powered electricity generation via interconnector technology.

Where possible, business customers looking to capitalise on lower pricing should act quickly. Pricing analysts, Cornwall Insight, shows small businesses pay 70% more than before the energy crisis began.

The idea that you should capitalise on prices now is further reinforced by this free government publication, Though prices are dropping in early 2025, you can see that the long-term trend is for prices to continue rising. Finding a good deal from a supplier now and locking in your rate is the best way to secure the benefits of the latest wholesale drops.

Business Electricity FAQs

Are business electricity rates higher than domestic?

If you’re asking yourself: is business electricity cheaper than domestic energy? It’s probably because you’ve seen a rate such as a wholesale price that doesn’t account for the additional costs of business electricity. While some businesses may be able to get a cheaper rate compared to a domestic household, you’ll typically be consuming more energy and, therefore, paying more. In addition, you’ll pay a higher rate of VAT at 20% compared to the 5% levied against domestic supply. You may also have to pay for the Climate Change Levy.

Is there VAT on electricity for businesses?

In short, yes. Businesses pay a higher VAT rate on electricity than homeowners, at 20%. Unfortunately, even VAT-registered companies cannot claim their electricity costs back. You may, however, be able to pay the 5% rate reserved for homeowners if your business uses no more than 33kWh of business electricity per day.

Why is business electricity so expensive?

Business electricity has risen in cost just like domestic electricity. Deemed rates are often more expensive than an agreement with a supplier – as they are the default rate and don’t take any specifics into account. With the addition of VAT and the climate levy, rates can become expensive – especially if your business has poor energy efficiency and uses lots of electricity.

Can I cancel my business electricity contract?

Cancelling your business electricity contract can be tricky. It usually involves sending a termination letter to your supplier during your window of opportunity. This window is the period outlined in your agreement between the contract end date and when you can prematurely end the contract. However, some unscrupulous suppliers can try to force you into unusual terms and agreements.

They may, for example, be a business built on cold-calling new businesses that have taken over premises, trying to force them to choose a high rate. Never agree to a rate over the phone. If you have doubts about an agreement you’ve made, ask for proof of contract and contact the Energy Ombudsman if you have any further doubts.