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 energy standing charge is a set daily rate that you must pay regardless of how much energy you use. Even if you use no energy at all – say your business premises has been empty – you'll still be charged this fee.
The business electricity standing charge is the amount you pay 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 and can make a big difference to the cost of your business energy bills.
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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.
What is the average standing charge on business energy bills?
It can be difficult working out the average energy business rate standing charge. That’s because there are so many variables at play when it comes to calculating your business energy bills, including the size of your business and where it’s located, as well as how and when it uses energy.
To give you an idea of the sorts of energy standing charge business rates you can expect to pay, let’s take a close look at individual standing charges on business gas and business electricity.
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.
SME owners should expect to pay anything from 25p to 61p per day*, depending on their 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 between 25p and 33p per day*. Owners of small and medium-sized businesses can expect to pay between 25p and 34p per day*.
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 do claim to offer business energy with no 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. Always be cautious and do your sums when comparing business energy suppliers without standing charges.
Instead of looking for a deal with no standing charge, it might be worth considering a small business energy account with a low standing charge. Although the unit rates on these deals will most likely be higher than on other deals, you might still save money if you don’t use an excessive amount of energy at your business premises.
In this instance, a low daily rate could help you cut costs without having to worry about your supplier making up the shortfall through excessively high unit rates.
Are no standing charge energy deals available for micro businesses?
When it comes to energy, your business is defined as a microbusiness if it meets one or more of the following criteria:
- It employs fewer than 10 employees (or their full- time equivalent) and has an annual turnover or balance sheet no greater than €2 million; or
- It uses no more than 100,000 kWh of electricity per year or uses no more than 293,000 kWh of gas per year.
If you run a microbusiness, you should expect to pay standing charge rates of between 25p and 33p a day* for electricity and between 25p and 37p per day* for gas. Speak to our energy experts to compare micro business no standing charge energy deals.
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.
*Standing charge rates based on businesses that switched or renewed gas and electricity with Bionic between January 2021 and March 2021.