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18 Jun 2020
Steve Ramsey avatar Steve Ramsey

Business energy standing charges

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How much are standing charges adding to your energy bills?

What are business energy standing charges?

When looking for a new energy package, you’ll come across the term ‘standing charge’.

The business electricity standing charge is the amount you pay each month to have your electricity supplied to your business. And for keeping you connected to the main energy grid.

The business gas standing charge covers similar costs for providing your gas supply.

Standing charges can vary significantly depending on your circumstances. What you pay depends on the business energy package you sign up to.

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Do I have to pay a standing charge?

Almost every business energy package comes with a standing charge – so you just have to make sure you are paying the least amount possible.

You may find some suppliers claiming to offer energy deals with no standing charge but they often feature higher-than-normal unit prices.

So just because there’s no standing charge doesn’t mean you’ll be paying less per month.

How much are business gas standing charges?

Business gas standing charges depend on a number of things, like how much gas you use, the length of the contract you want and whether you need supply to multiple locations or not.

That’s why it can be difficult to give you an accurate quote without first having some information about your business.

You should expect to pay anything from between 19p to £6 per day depending on your annual consumption.

The charge increases if your energy consumption does – and you’ll have to pay this charge for the duration of your contract.

How much are business electricity standing charges?

There are currently no deals for business electricity without a standing charge. So the prices that UK energy suppliers are offering are all pretty similar. They often only really vary depending on your business’s specific requirements

For electricity, the standing charge covers the maintenance of the national grid and the physical supply of electricity to your premises.

For microbusinesses, the daily standing charge will be around 26p-30p.

This figure falls to 24p-26p for small businesses, and 21p-23p for medium-sized businesses.

As you’ll have noticed, the daily amount decreases as the size of your business increases.

That makes it important to know the size of your business before signing up to a new agreement. If you go in blind, you could end up being overcharged.

Are energy deals with no standing charge available?

The answer to this question is both yes and no.

Most energy suppliers will insist on a daily commercial gas or electricity standing charge. Therefore, if you’re looking to enter a new business energy deal, it is highly likely that you’ll have to pay.

Some energy suppliers claim to have got rid of their standing charge.

But be careful. Energy packages with no standing charge often have higher kWh prices, so you pay more for every unit you use. This means you could end up paying much more for your energy depending on how much you use.

What are the pros and cons of no standing charge business energy deals?

Each energy package has its own advantages and disadvantages.

And the same is true for no standing charge business energy deals.

We recommend you look into the various pros and cons of each before choosing what’s right for your business. We’re happy to help guide you through.

For example, one advantage of a no standing charge business gas deal is that you only pay for the gas that you use.

This is particularly useful for seasonal businesses that may not operate at all for long periods of the year.

This contrasts with a deal featuring a standing charge, where you’d pay this fee every day, whether or not you’re actually using any gas.

However, as unit costs will likely be higher, you’ll be paying more for each unit of gas than you would on a package that includes a standing charge.

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