What is the average business energy bill?

What is included in business energy bills?

You may quickly bin your business energy bill when it arrives, especially if your company has a direct debit set up to pay the charges. But if you study your monthly bill, you’ll find out important information that will help you stay on top of your energy contract and potentially save you money.

What makes up the cost of my business energy bills?

The amount you owe your energy company will include:

If you’re facing a spike in energy bills, as many businesses have recently, you might be wondering how suppliers set their per-unit rates and standing charges. Many energy company costs feed into the prices you pay, including:

• £

  Wholesale energy costs (33% of your energy bill)

  The cost of generating or procuring the electricity and gas you use on the wholesale markets.^[4]

• £

  Network costs (25%)

  These costs cover the operation, maintenance, and upgrading of the electricity grid and gas pipes that bring energy across the country and into your business. Network companies charge energy suppliers a regulator-set price to use this energy network, a cost that is then passed onto energy consumers including your business.^[5]

• £

  Social and environmental obligation costs (25%)

  Large energy suppliers are required to contribute to government schemes, including those that fund energy efficiency upgrades in homes and businesses, assist vulnerable households with their heating bills, and support the uptake of renewable energy and technologies.^[6]

• £

  Operating and margin costs (16%)

  Energy suppliers have their own costs, including for customer service and billing. They also set their prices with a margin for profit.^[6]

• £

  Other costs

  These include costs for installing and reading meters, including the £13.5 billion rollout of smart meters.^[7]

What is the average business gas bill in the UK?

Natural gas prices have stabilised recently, although they remain elevated compared to before 2021, reflecting ongoing tensions with Russia, formerly a major supplier of gas to Europe.^[8]

The rates businesses pay for natural gas vary widely, depending on their usage, size, contract type, and supplier. Typically smaller businesses with lower consumption pay higher per-unit rates but in return have lower standing charges. Large businesses benefit from lower per-unit rates, reflecting their bulk usage, but have higher standing charges. Standing charges also vary by region, as they’re linked to maintenance of local gas infrastructure.

Typical rates and bills for natural gas, as of the summer of 2024, are as follows:

*Qualifying for the de minimis VAT rate of 5% for using less than 52,764 kWh of gas per year

What is the average business electricity bill in the UK?

With a third of Britain’s electricity generated by natural gas, electricity prices have had the same wild ride as natural gas prices recently: spiking to unprecedented levels in 2022 and then stabilising a lower, but still elevated, level.^[9][1]

The rates businesses pay for electricity and their overall bills vary greatly, depending on their consumption, size, contract type, supplier, and region.

*Qualifying for the de minimis VAT rate of 5% for using less than 12,000 kWh of electricity per year

How to reduce your business energy bill

Your business’s energy bill will likely form a significant part of your annual expenditure. While you can find savings by switching business energy suppliers and locking in cheaper rates with a fixed tariff, you’ll make the biggest dent in your bills by reducing your consumption. Greater energy efficiency will also insulate your business from future turbulence in the energy market and reduce your carbon footprint, a big pull for environmentally-conscious consumers and clients.

1. 1

   Conduct an energy audit

   An energy audit will identify where and at what times you’re using energy and help you home in on potential changes. A smart meter, displaying your energy usage in real-time, can assist with this audit.

2. 2

   Don’t leave electrical equipment on standby

   A sleeping computer still uses electricity. Turning it off entirely at night and over the weekend can reduce its annual energy use by 75%, according to the Carbon Trust.^[10]

3. 3

   Use energy efficient appliances

   Although more efficient energy appliances are often more expensive upfront, the energy bill savings will pay for themselves. If you don’t have the budget to replace ageing appliances, having them regularly serviced can ensure they’re operating as efficiently as possible.

4. 4

   Make your lighting efficient

   Lighting your office space could account for 40% of your business’s energy bill, EDF says.^[11] To reduce this usage, switch to LED and lower-wattage bulbs and energy-efficient lighting fixtures. Remind your staff to turn off lights when they leave the rooms and overnight. Motion sensors can correct human error and ensure you’re not lighting empty rooms.

5. 5

   Watch your thermostat

   You’re likely overheating or over-cooling your premises, inflating your energy bills. Turning down your heating by just 1 degree Celsius could reduce your energy bill by 10%.^[12] A programmable thermostat can guarantee you’re only heating the spaces you need when you need them. For instance, the thermostat could be set to turn on the heat an hour before your employees arrive and turn it off after they depart.

6. 6

   Go paperless

   Printers and copiers are electricity-hungry. A photocopier left on standby all year, even on nights and weekends, could use £63 of electricity a year.^[13] Keeping those emails digital saves not just paper but also electricity.