Is Your Business Electricity Bill Wrong?

There is no Ofgem price cap for business energy. Your supplier is under no obligation to offer you their most competitive rate. And if your fixed contract has expired, you are almost certainly paying 30–50% more per unit than a business on a properly negotiated deal.

The UK commercial electricity market is structurally designed to reward the businesses that engage with it — and to extract maximum margin from those that don’t.

I’ve spent twenty years watching the same pattern repeat. A business signs a contract, files it, forgets the end date, rolls onto a deemed rate, and pays thousands more per year than it needs to — not because cheaper deals don’t exist, but because nobody told them to look. Suppliers certainly won’t. That’s not cynicism. That’s how the market works.

What business electricity actually costs right now

There is no single official rate for UK business electricity. The most authoritative reference is the DESNZ Quarterly Energy Prices report, which recorded an average of 17.08p/kWh for industrial electricity consumers in Q2 2025 (excluding CCL). For non-manufacturing SMEs, market comparison data for April 2026 places current fixed contracts broadly around 27p/kWh on average, with the best available deals in the low-to-mid 20s p/kWh.

Here is what UK SMEs are broadly paying in April 2026:

Business Size	Indicative Unit Rate (p/kWh)	Standing Charge (per day)	Indicative Annual Spend
Micro (under 5,000 kWh/yr)	28–32p	40–55p	£1,400–£2,200
Small (5,000–30,000 kWh/yr)	26–29p	55–75p	£1,500–£9,200
Medium (30,000–100,000 kWh/yr)	24–27p	70p–£1.60	£7,500–£28,000
Out-of-contract / deemed rate	32–45p	Same or higher	30–50% more than above

Indicative rates from live market comparison data, April 2026, excluding VAT and CCL. Business electricity rates vary by supplier, location, consumption profile, and contract length. Official historical data is published quarterly by DESNZ in the Quarterly Energy Prices report.

The number that matters most is the bottom row. If your fixed contract has expired — or if you never signed one and defaulted onto a deemed rate when you moved in — you are paying the most expensive rate your supplier offers. Full stop.

The Iran conflict has changed the timing calculation

The standard advice used to be “compare in April–May or late September when wholesale dips.” That advice no longer applies.

The conflict with Iran, which began in February 2026, has severely disrupted shipping through the Strait of Hormuz and curtailed LNG exports from Qatar and the UAE. Wholesale gas prices are rising sharply — and because gas sets the price of UK electricity approximately 98% of the time via marginal cost pricing, business electricity rates are moving upward. Several suppliers have already pulled their cheapest fixed-rate products or repriced them higher. The July 2026 domestic price cap is forecast to rise by approximately 9%, with further increases expected into 2027.

If your contract is up for renewal, or you are currently out of contract, waiting for a better moment is a bet against a rising market. The right time to compare is now.

The out-of-contract trap is the most expensive position in UK energy

Rollover tariffs are the single most expensive position any UK SME can be in. When a fixed-term contract expires, most suppliers automatically roll you onto a variable or deemed tariff. Market analysis consistently reports these rates running 50–80% higher than the equivalent fixed contract — and because there is no Ofgem cap on commercial energy, there is no regulatory ceiling on what they can charge.

Since 2024, Ofgem rules give businesses 30 days to exit rollover tariffs without exit fees. If you have already rolled over, you have a 30-day window to switch without penalty from the point your rollover begins.

If you do not know when your business energy contract ends, find out today. Check your contract documents or call your supplier and ask for your contract end date and current unit rate. If you are out of contract, you are overpaying — and every week you wait costs real money.

What you actually need before you compare

Before any comparison is meaningful, you need five pieces of information:

Annual electricity consumption in kWh — from your bills, or by totalling 12 months of invoices
Current unit rate (p/kWh) and standing charge (p/day)
Meter type — single-rate, Economy 7, or half-hourly
Your MPAN — the 13-digit Meter Point Administration Number on your electricity bill
Contract end date — the single most important date in your energy management

If you have a smart meter, you can pull half-hourly consumption data that gives whoever is quoting you a far more accurate load profile to price against. More accurate profiling means more competitive quotes. This is not a marginal difference — the spread between the cheapest and most expensive quote on the same meter regularly exceeds 30%.

The components that catch people out

Business energy quotes combine several moving parts that are easy to confuse if you’re not doing this regularly.

Unit rate is the cost per kWh consumed — the primary lever for saving money. Standing charge is a fixed daily cost regardless of consumption; for low-usage businesses, the standing charge can matter more than the unit rate. Climate Change Levy is a government tax on business energy — most businesses pay full CCL, but registered charities and some renewable generators are exempt.

Contract length deserves particular attention in the current market. Earlier in 2026, with wholesale forwards broadly flat, longer fixes offered the best blended rate. Following the Iran conflict’s impact on wholesale markets, that calculus is less straightforward. Some are recommending shorter 12-month terms to retain flexibility; others argue locking in before further rises is the priority. The answer depends on what the forward curve looks like at the point you compare — which is exactly the kind of question an independent consultant can model for you.

Exit fees on fixed-term contracts are real. Understand the penalties before you sign.

And a note that shouldn’t need stating but does: the cheapest gas supplier is rarely the cheapest electricity supplier. Dual-fuel discounts for SMEs are mostly marketing. Always price each fuel independently.

Why using a single comparison channel is a mistake

No single comparison platform accesses every supplier or every available tariff. The businesses that consistently find the best rates use at least two channels.

Online comparison platforms compare quotes from multiple suppliers simultaneously. They earn a commission on any contract placed, so the service is free to you. Be aware that not all suppliers appear on every platform’s panel — and these platforms are optimised for volume, not for finding the structural nuances in your load profile.

Direct supplier quotes are worth requesting from two or three suppliers, particularly smaller or challenger suppliers — Yu Energy, Pozitive Energy, Crown Gas & Power, Opus Energy — who sometimes offer rates that don’t appear on major comparison platforms.

An independent energy consultant adds a different dimension entirely. For businesses spending more than £10,000 a year on electricity, a dedicated consultant can access wholesale market pricing, tender your contract to a wider supplier panel, model the forward curve against your specific load profile, and manage the switching process. The difference between a consultant and a comparison platform is the difference between a tailored procurement strategy and a price-sorting algorithm.

I’d say that, wouldn’t I. But after twenty years of doing this, I can tell you the number of businesses I’ve worked with who were already on their supplier’s best available rate before they came to us. It’s vanishingly small.

What smart switching actually looks like

A small independent retailer in the Midlands consuming 22,000 kWh a year had their contract expire in October 2025 without noticing. They rolled onto their supplier’s variable rate of 38p/kWh. When they ran a comparison in February 2026, the market best for their profile was 23p/kWh on a 24-month fix. Switching saved them approximately £3,300 a year — and cost them 30 minutes.

That retailer isn’t unusual. They’re typical. The gap between out-of-contract rates and the best available fixed deal is consistently the single largest saving available to any SME on its energy bill. And it requires no capital investment, no technology, no operational change. Just the decision to look.

The structural question nobody asks

Why is there no price cap for business energy?

Domestic customers have one. It’s imperfect, and it only applies to default tariffs, but it exists. Businesses get nothing. No cap, no regulatory ceiling, no obligation for suppliers to offer anything resembling a fair rate to an out-of-contract customer.

The policy rationale is that businesses are sophisticated enough to negotiate their own deals. That assumption may hold for a FTSE 250 company with a dedicated procurement team. It does not hold for a four-person accountancy practice in Bournemouth or a family-run hotel in the Lake District. These businesses face the same deregulated market as a multinational — with none of the leverage, none of the data, and none of the bandwidth.

The consequence is a market where the best-informed buyers pay dramatically less than the least-informed, and suppliers have no regulatory incentive to close that gap. The commercial energy market doesn’t punish businesses for being uninformed — but it does charge them for it. Handsomely.

That asymmetry is the reason independent energy consultancies exist. Not to sell you energy — we don’t supply a single unit — but to ensure you’re not negotiating against a counterparty that knows your consumption data better than you do.

The question for business owners right now

You know whether your energy contract is fixed or not. You know whether you’ve compared rates in the last twelve months. You know whether you have a renewal date in your calendar.

If the answer to any of those is “I’m not sure” — that uncertainty has a price, and you’re already paying it.

The UK business electricity market will not move in your direction unless you ask it to.

And it will not tell you when you’re overpaying. That is a feature, not a bug.

Find out your contract end date. The rest follows.

Sources:

Iran conflict and current market:

Primary / official sources:

Market / industry sources (indicative rates):

Business Electricity UK 2026 — Connection Technologies

Telnergy Limited is an independent commercial energy consultancy established in 2002, based in Christchurch, Dorset. Ofgem registered TPI · ADR Ref E3561 · CRN 04576876.