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What costs make up your business electricity bills?

Businesses use electricity every day, whether to power essential equipment and machinery or just turn on the lights. But if you don't keep on top of your usage and your rates, your costs can quickly add up. This guide explains more about business electricity bills as well as how to save energy and money.

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What costs make up your business electricity bills?

There are two main charges that make the biggest difference to your business electricity bills:

Unit cost - This is the price you pay for each unit of electricity (measured in kWh) that your business uses.
Standing charge - This is a daily amount that covers the maintenance of the national grid and the cost of transporting electricity to your premises.

Knowing how much you should be paying in unit costs - also known as price per kWh - and standing charges can be difficult. Unlike domestic electricity customers who can compare all the predefined electricity deals readily available on the marketplace, business electricity customers must approach energy suppliers individually for bespoke quotes.

This means that it’s hard to know how much you should be paying for your electricity and difficult to know whether your business will pay an average unit rate for electricity - even if two businesses are identical on the face of it, the location of their premises and the energy efficiency measures that are in place can all affect prices. But to help you get a rough idea of what an average electricity bill for a small business should be, we’ve compiled a list of average figures below.

What are the average electricity rates?

Business sizeAnnual usageUnit price per kWhDaily standing charge Cost per year
Micro Business5,000 to 15,000 kWh26.6p64.6p£2,895
(based on annual usage of 10,000kWh) 
Small Business15,000 to 25,000 kWh25.6p83.0p£6,062
(based on annual usage of 20,000kWh) 
Medium Business25,000 to 55,000 kWh26.1p65.5p£12,636
(based on annual usage of 40,000kWh) 
Large BusinessMore than 55,000 kWh26.4p68.5p£14,770
(based on annual usage of 55,000kWh) 

Note: Prices correct as of January 2024. Rates and bill size may vary according to your meter type and business location. The prices you’re quoted may be different from the averages shown. The figures shown are the average unit rates and standing charges quoted by Bionic per business size from January 2 to January 5, 2024. Rates do not include any Energy Bills Discount Scheme discount.

How to save on business electricity bills

The best way that you can save on your business electricity bills is to shop around and switch to a more competitive deal. The first thing you need to know when considering changing your electricity deal is that unlike domestic electricity customers, business electricity customers are more tightly bound by the terms of their contracts.

You are only allowed to switch, or even approach suppliers for quotes with which to compare business electricity bills, once your current contract enters its ‘renewal window’. This typically occurs six months before the contract is due to expire and your supplier will get in touch with a new offer once this switching window has opened. This offer is unlikely to be as competitive as other deals on the market, so you should always compare tariffs at the first available opportunity.

You can do this in just a few simple steps:

  • Give the energy experts at Uswitch for Business a call on 0800 188 4930, or put your postcode in the box above and we’ll give you a call back.
  • After a quick chat, we’ll compare energy deals to find the ones that best suit the needs and budget of your business.
  • You choose the deal you prefer, then we take care of the rest. We’ll let your old supplier know you’re making the switch and you can start enjoying cheaper electricity when your new deal starts.

When you switch with Uswitch for Business, we’ll compare energy rates from a range of trusted suppliers to make sure you get a quality service alongside competitive prices. And we can also keep an eye on your renewal date and compare deals on your behalf as soon as your switching window opens, saving you even more time and money.

While you’re waiting for your renewal window to come up, here are some things you can do in the meantime to be more energy efficient, reducing your business electricity bills and your carbon footprint.

Carry out a business energy audit

If you’re looking to cut your energy usage to save money, conducting an audit of your business’s energy usage offers a good starting point. This will help you to see where your business is using the most of its energy and where it’s being wasted. Relatively small businesses and microbusinesses can purchase a device known as an energy-saving power meter to do this for them, but it might be best to ask your supplier to run a professional audit on your behalf.

Unplug and shut down to save money on business electricity

Up to 70% of energy is wasted by equipment such as computers and monitors being left on standby overnight and during the weekend. To minimise this wastage and cut the cost of your business electricity bills, products are available that automatically shut down appliances left on standby. For example, a PC automatic standby shutdown extension lead can recognise when a computer has been powered down and automatically removes power to equipment connected to the sockets. It’s also worth trying to implement a more energy-conscious culture in your workplace, which sets out a policy of switching off lights and equipment when not in use.

Fit energy-efficient lighting

Swapping your standard light bulbs for energy-efficient bulbs can help cut the average business electricity bill. You should also have all light fittings regularly cleaned so they’re free of dust.

If you compare business electricity bills before and after employing these measures, you should be able to see some savings. However, switching plans is still the most effective way that you can save on business electricity bills.

Talk to Uswitch for Business today on 0800 188 4930 to hear how we can help you find the best deal for your business. We’ll run a business electricity plan comparison and take care of all the details involved in switching.

What costs make up your business electricity bills?
How to save on business electricity bills

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