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Energy bills don’t make for interesting reading and at first glance they can look pretty complicated – making it an even less enjoyable task. But understanding your bill is the first step towards cutting costs and making savings – here’s what to look for.

Business energy bills are made up of several different charges and it’s not always obvious what some of them are, so here’s a breakdown:

  • Wholesale energy price – this is the raw price of energy that your supplier pays for the gas and electricity it sells to you.
  • Metering costs – this covers the cost of meter maintenance.
  • VAT – most businesses pay the standard 20% on gas and electricity but if you run a microbusiness and use less than 33kWh (kilowatt hour) of electricity or 145kWh of gas, then you could qualify for the lower rate of 5%.
  • Climate Change Levy – this is a government tax to encourage the development and use of renewable sources, suppliers often pass this on to consumers although some companies are exempt depending on the amount of green energy they use.
  • Supplier margin – this will also cover overheads such as marketing, advertising, and customer acquisition.
  • Transmission Network Use of System (TNUoS) – this covers the cost of developing and maintaining the energy network, as well as transporting it nationally.
  • Distribution Use of System (DUoS) – this covers the cost of maintaining regional energy networks, costs vary depending on where you are in the country.

Being aware of the various charges can help you make a more informed choice about which supplier to go for – but the two most important costs you need to bear in mind are:

  • Unit cost – this is the price you pay for each unit of gas or electricity you use, it’s measured in kilowatt hours (kWh).
  • Standing charge – this is a daily charge that covers the cost of providing you with an energy supply.

No two commercial energy bills will ever be the same and your bills will depend on the tariff you’re on, where your business is located, and how much energy you use. But to give you a rough idea of how much you should be paying, here are some tables on the average energy cost according to business size.

Average business electric bill costs

Business size Average annual usage (kWh) Average price per kWh Daily standing charge Average annual price
Microbusiness 5,000 – 15,000 13p – 13.5p 26p – 30p £650 - £1,800
Small business 15,000 – 30,000 11.8p – 13p 24p – 26p £1,900 - £2,900
Medium business 30,000 – 50,000 11.3p – 11.8p 21p – 23p £3,300 - £5000

Average business gas bill costs

Business size Average annual usage (kWh) Average price per kWh Daily standing charge Average annual price
Microbusiness 5,000 – 15,000 4.1p – 4.5p 23p – 26p £300 - £700
Small business 15,000 – 30,000 3.8p – 4.0p 21p – 22p £800 - £1,400
Medium business 30,000 – 65,000 3.5p – 3.7p 18p – 20p £1,500 - £2,0000

Saving energy can feel like a real chore – but it doesn’t have to mean fewer cups of tea or powering down essential tools.

Simple changes like switching off lights when they’re not needed or shutting computers down properly can all help make savings. More often than not, colleagues and staff don’t actively seek to waste energy so a few posters to reinforce the message really can help cut costs (and save the planet too).

If you’re able to invest a bit more, then upgrading equipment to the latest most energy efficient models and improving your building’s insulation could significantly lower bills.

Spending money to save a few pounds on your energy costs might seem a bit roundabout but the long-term savings often far outweigh what you’ve initially stumped up. If you want more advice about lowering energy use, check out this GOV.UK energy efficiency guide.

Of course, the quickest way to reduce your average energy bill, is to compare prices and find a better deal – so for help and advice on all your business gas and electricity needs, click the ‘GET AN ENERGY QUOTE’ button at the top of the page to request a callback or chat to one of our experts on 0800 158 5296.

What would you spend your savings on?

or call 0800 158 5296

or call 08001585296

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