Is a no standing charge electricity tariff right for your business?

Standing charges have been steadily increasing since the war in Ukraine began. Today, most energy suppliers offer tariffs based on a zero standing charge (ZSC), but are they right for your business? We find out and provide an online calculator so you can see if they’ll save you money.

What is a standing charge?

Every tariff has two elements: a charge per unit of energy used and a fixed daily amount. The latter is called a standing charge and is payable even if you don’t use any gas or electricity during the year. Think of it as the rental price of your meter.

Why are these charges so high?

Prior to 2022, standing charges had only risen in line with inflation. But the energy price cap in April 2022 almost doubled the daily amount for consumers with electricity meters, from 24.89p to 45.34p. Four years later, and it stands at 57.19p per day.

The reasons behind the increases include costs for:

• Compensating energy companies for accepting customers from failed suppliers at the start of the war in Ukraine
• Additional liabilities for government net-zero policies
• Levelisation of prepayment and direct debit customer meters
• Expansion of the Warm Homes Discount scheme

Standing charges vary greatly by region

Although the price cap has an average standing charge for electricity prepayment meters at 57.2 per day (Q2/ 2026), different regions vary by over 20% above or below this figure.

London has the lowest standing charge in the UK at 44.8p per day, which is 22% lower than the cap, whereas North Wales and Mersey are 70.8p per day, which is 24% higher.

When should you consider a ZSC tariff?

This depends on a single factor: price. There is a break-even point when the ZSC tariff becomes more expensive, and you’re better off staying on a regular tariff.

These tariffs are aimed at low-usage customers.

Which suppliers offer these tariffs?

As yet, there are no available zero-standing-charge tariffs for UK homeowners. The government has stated numerous times that Ofgem should rule that energy companies must offer a ZSC option,, but this has yet to happen.

Because many industry costs are paid via the standing charge, Ofgem is calculating how to spread them amongst the existing tariffs.

But what about businesses?

Zero standing charge tariffs for businesses

There are quite a few tariffs available for business customers, but these are aimed at low-volume users.

To illustrate how they work, we have selected two tariffs from Octopus Energy for Q2 2026. These are only available to business customers and are quoted with VAT included.

These are both 12-month fixed contracts in tariff band 2.

• Tariff 1: 27.97p/ kWh + 71.03p/ day
• Tariff 2: 35.69p/ kWh + 0p/ day

Although you save 71.03p/day or £259.48 per year by avoiding a standing charge, the unit price of electricity is 27.6% higher.

The online calculator below shows that the ZSC tariff is cheaper if your annual consumption is below 3,358 kWh; at this point, both tariffs cost the same.

According to Ofgem, most consumers fall into this bracket, but this amount is used by micro businesses. Most companies use over 5,000 kWh, so a ZSC tariff would be unlikely to be useful.

Zero standing charge calculator

Calculate if you’re better off with no standing charges or with a regular tariff and lower unit rates.

You can change the fields marked red in the zero standing charge calculator to suit your requirements. Please share this page with others so they can see if it makes financial sense to switch tariffs.