When running a business, managing your energy costs efficiently can significantly impact your overheads. Business energy contracts work differently from domestic tariffs, and understanding how prices are calculated, how switching works, and where to find the best suppliers can ensure you’ve got the most competitive deal.
Here we explain how business energy works, the pricing structure for commercial tariffs, where to compare options online to switch suppliers, and how a business energy broker can help you find the cheapest business energy prices and rates.
How does business energy work?
Business energy refers to the electricity and gas supplied to commercial premises, such as offices, shops, warehouses, and industrial sites, as well as other types of properties. Business energy prices are often tailored to each company’s needs rather than offered as a standard “one-size-fits-all” tariff.
Unlike domestic energy, most business energy contracts are fixed-term agreements, typically lasting between 1 and 5 years. During this time, the unit price you pay for energy is usually locked in based on your agreed contract to offer a degree of predictability for planning and forecasting costs.
Business energy suppliers take into account multiple factors when generating quotes. Because of this, businesses rarely receive identical pricing, even if they operate in similar sectors.
How commercial energy prices are calculated
Business energy prices are usually calculated based on several key inputs, including your annual energy usage, the type of tariff you choose, your meter type, and the length of your contract.
Suppliers also consider your business location and the overall wholesale cost of energy when generating bespoke quotes.
Common business energy tariffs
The best tariff type for your business often depends on how much price certainty you want and how comfortable you are with potential fluctuations in energy costs.
Below are the key business energy tariffs worth understanding if you’re looking to compare commercial energy plans and rates in the UK.
Fixed-rate tariffs
This is the most common type of business energy tariff. With a fixed-rate tariff, the unit cost of your electricity or gas is locked in for the duration of your contract. This can provide predictable monthly costs and protect your business from underlying energy price volatility.
Fixed contracts are popular because they allow your business to maintain stable operating expenses with predictable energy overheads.
Variable-rate tariffs
Variable tariffs mean your business energy prices can fluctuate during the contract period based on market conditions. While this may sometimes result in lower prices if wholesale costs fall, it also means your energy bills could increase unexpectedly.
Because of the added uncertainty and unpredictability, many businesses prefer fixed tariffs over variable rates to enable more accurate cost projections and cash flow planning.
Pass-through tariffs
Some suppliers offer pass-through or flexible tariffs, where certain charges (such as network costs or environmental levies) can vary during the contract.
These business energy tariffs can offer lower headline rates but may lead to fluctuations in your overall energy costs throughout the contract.
Flexible purchasing tariffs
Larger businesses can use flexible tariffs that allow energy to be purchased in blocks at different times.
This strategy is often used to manage risk and take advantage of favourable market conditions, but it adds a layer of complexity to your usage and billing.
Deemed (or out-of-contract) rates
If your business moves into a property without agreeing a contract with an energy supplier, or your previous contract expires without renewal, you will usually be placed on deemed rates.
These are typically much higher than negotiated tariffs, similar to a lender’s standard variable rate (SVR) on mortgages, which is why businesses are usually advised to arrange a new contract or switch suppliers to avoid them.
Switching business energy suppliers
When your contract approaches its end date, you typically have the option to renew with your current supplier, switch to another provider, or negotiate a new deal.
Switching business energy suppliers can reduce operating costs, particularly if your current contract is ending or you’ve been moved onto higher out-of-contract rates. The energy switching process usually involves:
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Speak with an energy broker to review your current contract
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Gathering details about your energy usage and meter type
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Comparing available business tariffs across different suppliers
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Agreeing a new contract term with your chosen business energy supplier
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Arranging the transfer of supply and starting your new contract
Switching suppliers can give your business access to more competitive rates, renewable energy tariffs, or contract terms better suited to your usage patterns. In most cases, the physical energy supply itself does not change; only your tariff and the company responsible for the billing and acting as your point of contact.
With the right support, switching business energy suppliers can be frictionless with zero disruption to the day-to-day running of your business.
How a business energy broker can help
A business energy broker can significantly simplify the process of comparing and switching commercial energy contracts. Rather than contacting suppliers individually, a broker can access pricing from multiple energy providers and present you with the best options tailored to your needs.
A major advantage of using a broker is the ability to carry out a whole-of-market comparison. Skilled business energy brokers can negotiate exclusive deals or discounted rates with energy suppliers that are not advertised publicly. This can be particularly useful for businesses with high usage or complex needs.
Along with sourcing and comparing quotes, business energy brokers can also assist with contract timing, supplier negotiations, and help manage the switching process from start to finish. If you’d like to review your options with an experienced energy broker, you can get started below.
Get a free energy health check for your business
Comparison of the Best UK business energy suppliers
Numerous commercial energy suppliers operate across the UK, but the best option for your business energy needs will depend on factors unique to your company.
Some of the most well-known UK business energy suppliers include:
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Octopus: Business energy options with Octopus are available for both large and small businesses. Octopus Business Energy offers electricity or gas, and if you operate multiple sites, you can still manage everything in a single, joint portfolio. Octopus also has tariffs like “Shape Shifter” - providing cheaper electricity outside peak hours if your usage patterns are flexible.
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EDF: Whether you’re classed as a small or large business with EDF business energy depends on your usage. The threshold is 100 MWh for electricity and/or 300 MWh for gas. You can fix for 1 to 4 years, and EDF offers a range of sustainable energy initiatives for businesses through smart meters, electric vehicles, and solar energy.
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E.on: Typically offers business energy for small to medium businesses (which it categorises by your level of electricity and gas usage) under the E.on next banner. Then, for larger companies using over 100,000 kWh of electricity or 293,000 kWh of gas per year, you’ll be using npower Business Solutions.
While these business energy suppliers are widely used across the UK, pricing and contract terms can vary significantly depending on your company profile. Comparing multiple suppliers with guidance from an energy broker is usually the most effective way to find the cheapest business energy.
Getting an online business energy price quote
Because commercial energy tariffs are often tailored to individual businesses, the most accurate way to find current prices and carry out a business energy price comparison is to get a bespoke quote.
Energy suppliers and brokers usually require information such as:
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Your business postcode
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Current energy supplier
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Estimated annual usage
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Meter type or MPAN/MPRN number
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Contract end date
Using this information, brokers can quickly generate a personalised energy quote based on your usage and contract preferences.
Speak to an independent business energy broker today
Business energy contracts are more complex than domestic tariffs, with pricing often based on your company’s usage, turnover, type of business, location, contract length, and more.
Many suppliers don’t publish their commercial rates, making it difficult to know whether you’re getting a competitive deal. We can connect you with an experienced broker who can quickly compare rates and get a commercial deal tailored to your needs.
Here’s why businesses across the UK use Money Helpdesk to compare energy suppliers:
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Access to experienced business energy brokers
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Whole-of-market comparisons across leading energy suppliers
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Support securing fixed tariffs and negotiating competitive rates
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Free energy health check for your business with no obligation to proceed
If you’d like to compare current business energy prices or explore switching suppliers to reduce your company’s energy costs, you can get started here.
FAQs
Some UK businesses may be eligible for grants or access funding schemes that support renewable energy installations, such as grants for solar energy business panels.
Availability varies depending on current government programmes, local authority schemes, and sector-specific initiatives. If you’re considering solar energy for your business, it’s worth discussing valid schemes with your business energy broker.