Gas and Electric for Business: Help With Energy Bills

business building mobile phone landline phone coins and flame above energy bills

Business electricity rates are not as simple to follow compared to domestic usage. The cheapest electricity supplier for small businesses depends on the size, and type of your company. You need to compare business electricity and gas suppliers; crucial to protect your net profit.

If you don’t set aside enough money for your company’s energy supply, your company can run into debt and your net profit will plummet, fast. Prices for business energy can vary greatly depending on a number of factors. Before you go mad trying to calculate gas usage for your business or business electricity prices per unit, follow the simple three-step process below. You’ll get accurate figures and join the cheap energy club for a more profitable business.


Business electricity and gas: Where do I start?

So how much money should you reserve? That depends on how much energy your business will be consuming. The first step is to figure out the size of your business. Is yours a micro, small or medium-sized business? The answer to this question will help you predict your consumption based on a similar sized company. If you’re still unsure what size your business is, click the drop-down for each business size to see some examples.

Number Of Employees Annual Turnover
Micro Business Up to 10 Up to £2 million
Small Business Up to 50 Up to £10 million
Medium Business Up to 250 Up to £50 million

Source:UK government and EU definition


British gas-electric market: Where does my business fit in?

Before you look at the business energy rates in the final step further below, the second stepto have an idea of whether your business can expect a low or high consumption of energy. You can judge this for yourself by taking a look at the UK’s top 10 biggest business energy consumers in the chart below. Where does your industry it in?

Source:Gazprom Energy

  • Good To Know...
  • The UK consumer 140,668 ktoe (kilotonnes of oil equivalent) of energy in 2016
  • The services sector accounted for 14% all consumption in 2016
  • Convert ktoe to kWh here

Business electricity: What’s the average price for a business of my size?

You will already have seen that business electricity prices are composed of a standing charge and a unit rate. The third step in budgeting for your business energy bills is to find out what these figures will be and how they’ll affect your business electricity bills each year. See below what the average business electricity and gas prices are for your business.

Average business electricity prices per kWh
Business size Average annual usage (kWh) Average price (per kWh) Standing charge (daily) Average annual price
Micro business 5,000 - 15,000 14.4p - 15.9p 23p - 29p £900 - £2,244
Small business 15,000 - 25,000 14.3p - 15.1p 23p - 28p £2,367 - £3,660
Medium business 25,000 - 50,000 14.3p - 14.7p 23p - 27p £3,774 - £7,234

Source:Business energy

Average business gas prices per kWh
Business size Average annual usage (kWh) Average price (per kWh) Standing charge (daily) Average annual price
Micro business 5,000 - 15,000 5p - 5.1p 19p - 25p £400 - £820
Small business 15,000 - 30,000 4.5p - 5p 19p - 25p £820 - £1458
Medium business 30,000 - 65,000 4.3p - 4.5p 24p - 25p £1458 - £2239

Source:Business energy


Bonus Step: 5 Steps to Reduce Your Annual Energy Bills

You can save money and reduce your overall yearly invoice by following these five simple steps:

1. Get an accurate meter

gas and electric meter with orange flame

A fully functioning meter ensures you’re not overcharged. Double check that your meter is operating as it should and is generating the correct readings.

2. Switch Contracts Regularly

As you’ve already seen in our Business Energy Bills Guide, you’ll want to avoid “deemed rates” to get the cheapest available tariff available. Do be fooled into believing that the longer you stay with your supplier, the lower your rate will be. In the business energy market, brand loyalty doesn’t exist. You should switch every 12 months.

3. Be Energy Efficient

green lightbulb

You’ve seen the good news that you can reduce your business energy bills by being energy efficient and how to do this. Avoiding the Climate Change Levy is just one of them. You will want to introduce some basic energy efficiency practices in your company that could reduce your bill by 10%.

This could be as simple as having smart heating controls installed, optimal radiator thermostats and heating system that turns the heating off when you all leave work according to a fixed heating schedule. This will bring your unit costs down significantly.

4. Pay by Direct Debit

While it may be tempting to pay your gas and electricity bills quarterly or yearly for budgetary purposes, it often works out cheaper to pay by direct debit. That’s because your business energy supplier will discount your bills by an additional 6% for direct debit payments.

5.Upgrade Old Appliances

radiator

Replace old and worn-out appliances with more modern, energy efficient models. This is especially important for gas boilers, since they may not be covered by your supplier, if the model is over 5 years old. The intial cost will be amortised very quickly when you consider the cumulative savings made from an efficient boiler.


  • Good To Know...
  • Average electricity bill for UK businesses: £3,061 / year.
  • Average Unit Price: 14.36p / kWh.
  • Average Standing Charge: 28p / day.
  • Most businesses use from 15,000 to 25,000 kWh / year.

Flame and light bulb

Protect Your Business’ Net Profit.

Call Selectra to get the tariffs best suited to your company’s size and sector. It’s time to join the cheap energy club!


Points To Remember...

Business electricity and gas prices will change daily.

They’re based on the up-and-down fluctuations in the wholesale market. Choose a business energy supplier who can help you keep track of these movements. That way you can plan ahead and use more of your energy needs while prices are low, and do the opposite while prices are high.

Octopus Energy, for example, has launched its Octopus Tracker. It’s the first tariff to truly follow the wholesale price of energy. On any given day you can see what you’re spending and compare it to what you’d spend on the average variable tariff. That means you can compare your average electric bill per month against wholesale market prices.

That way you’ll have peace of mind that you’re on the best tariff for your type of business. If ever it becomes cheaper on the variable tariff, you’ll have the opportunity to switch at no extra cost.

two graphs showing your gas and electricity bills compared to the wholesale price

Source: Octopus energy tracker

Budget for your business energy bills.

Base your calculations on the size and sector of your business using the tables above. But note that your supplier should provide you with more accurate figures by using the latest usage estimates to update your energy forecast for the following 12 months. If your supplier doesn’t offer this, it may be time for a business energy switch.

Shop around, even when you’re already on a great tariff.

On the Octopus Tracker, you can compare your bill to what it would be if you were on any of the currents Big 6 variable tariffs. That means those offered by British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE.

Its technical software includes a fast gas consumption calculator based on accurate British gas-electric data from current and past usage. You can ask it to “calculate my gas bill” on the go while you’re away from work. That way you can switch business gas and power provider when the time is right. Watch the video below to find out how it works.