Written by George Sweeney Reviewed by Craig Watson
28 August 2026
First Published
If you operate a residential care home or nursing facility, your energy bill is likely one of your largest overheads. Between keeping residents warm 24 hours a day, running commercial laundry, and powering essential medical equipment, care homes have uniquely high energy demands.
If your care home is struggling with rising utility costs, reviewing your energy contract is well worth it. Here, we explain how business energy works for care homes, how tariffs are structured, whether renewable solutions are worth pursuing, and practical steps to reduce consumption without compromising residents’ comfort.
Are there specific energy deals for care home businesses?
While there are no specific tariffs for care homes, you can get bespoke commercial energy contracts designed to support the intense 24/7 energy demands and safeguarding requirements of the care sector.
Unlike standard offices that close for the evening, care homes require continuous heating, overnight lighting, and round-the-clock electricity. Certain suppliers understand this usage and can build custom contracts with multi-site tariffs for care groups or flexible off-peak deals to suit your specific consumption needs.
Also, because you’re housing vulnerable residents, energy suppliers offer critical safeguarding protections. Care homes can be added to the Priority Services Register (PSR), ensuring your facility gets priority support and advance warnings in the event of something like a power cut or gas supply interruption.
How your tariffs will be calculated
Commercial energy pricing can be tailored to your care home's specific premises. When an energy supplier calculates a tariff for your care home, they will factor in:
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Unit rate: The price you pay for the gas or electricity the business consumes. Because care homes use high amounts of gas for space heating and hot water, securing a low unit rate is essential.
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Standing charge: A fixed daily fee covering grid distribution. Care homes often require high-capacity connections to run areas like kitchens and laundry rooms, meaning your standing charge may be higher than a standard retail contract.
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Meter type: Due to high electricity consumption, many care homes require a Half-Hourly (HH) meter. This automatically sends your exact usage data to the supplier every 30 minutes, resulting in highly accurate billing.
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Taxes and levies: This is critical for care homes. Because your premises act as a residential dwelling, qualifying care homes can pay the reduced 5% domestic VAT rate on energy, rather than the standard 20%. Qualifying for this reduced rate also automatically exempts your care home from paying the Climate Change Levy (CCL).
How to get the best energy deal for a care home
To secure the best rates and find the most competitive deal for your healthcare facility, here are three simple steps to follow:
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Speak to an expert energy advisor: Before signing anything, have a specialist business energy broker audit your bills. An expert can validate everything, confirm whether you’re receiving the 5% VAT and CCL exemptions, check for billing errors, and determine the exact contract type your care home needs.
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Consolidate multi-site homes: If you operate a group of care homes, do not leave them on separate, mismatched contracts. Your broker can negotiate a multi-site energy deal that pools your total purchasing power together, unlocking cheaper wholesale rates and aligning all your properties to a single renewal date.
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Lock into fixed rates: Budget certainty is crucial in the care sector. Securing a fixed-rate contract for a set period (usually up to 4 years) protects your business from sudden wholesale price spikes, so you can accurately forecast annual operating costs.
If you’d like to have a free initial chat with an experienced business energy advisor, you can get started below.
Get a free energy health check today
Renewable energy for a care home business
Sustainability is an increasingly important focus for the healthcare sector. Implementing renewable technologies can drastically cut your reliance on expensive grid energy while future-proofing your facility:
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Commercial heat pumps: Air-source or ground-source heat pumps are incredibly efficient alternatives to traditional gas boilers. They can handle the high-volume domestic hot water needs of a care home while providing consistent heating for residents.
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On-site solar power: Installing solar panels on your care home's roof can directly offset the heavy daytime electricity drain of things like commercial laundry machines, kitchens, and medical equipment.
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Green energy tariffs: Many commercial suppliers now offer 100% renewable electricity tariffs backed by REGO (Renewable Energy Guarantees of Origin) certificates, providing clean power for your care home without any upfront infrastructure costs.
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Biogas (green gas): If your care home is heavily reliant on gas for heating, some suppliers offer green gas tariffs sourced from agricultural and food waste, helping lower your carbon footprint.
Small business energy for care homes
If you run a small, independent residential care home, your energy needs and purchasing power will look very different from a large national care group. For example, you may operate on standard commercial meters rather than Half-Hourly meters.
For smaller independent homes and micro-businesses, the biggest financial threat is neglecting your contract end date. Because smaller facilities don’t have the massive bulk-purchasing power of a national group, energy suppliers are less likely to automatically offer you their most competitive retention rates.
It’s usually vital to use a broker to compare the whole market for your small care home business rather than simply accepting your supplier's first renewal offer.
Tips to help your business save money on energy bills
Energy waste in a residential care home facility can quickly drain your budget. Implementing a few care-specific changes can result in significant savings without impacting the comfort of your residents:
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Upgrade commercial laundry equipment: Care homes typically wash large amounts of bedding and towels daily. Switching to modern, A-rated industrial washing machines and heat-pump tumble dryers can drastically cut electricity and water-heating costs.
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Install smart zoning and TRVs: Residents have different temperature preferences, and unused communal spaces don’t need heating all day. Smart thermostats and Thermostatic Radiator Valves (TRVs) let you heat occupied rooms efficiently while saving energy in empty areas.
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Switch to automated LED lighting: Care homes require well-lit corridors for safety at all times. Swapping all fixtures for low-energy LEDs with motion sensors ensures hallways and bathrooms are safely lit only when in use, drastically reducing overnight electricity waste.
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Maintain boilers and HVAC systems: A poorly maintained commercial boiler uses significantly more gas to reach ideal temperatures. Regular servicing can help keep your heating system as efficient as possible.
Money Helpdesk's Analysis
Business Energy Adviser
Get a free energy health check for your care home
Running a busy care home leaves little time to sit on hold with energy suppliers or wade through complex energy contracts. Unfortunately, if you ignore your utilities, you could end up overpaying or falling onto uncompetitive rates.
Here’s why care home operators across the UK use Money Helpdesk to help improve their commercial energy arrangements:
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Access to specialist energy advisors who understand the healthcare sector
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Expert checks to ensure you’re receiving the correct exemptions
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Market comparisons to find the best tariffs and multi-site rates
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Free initial energy review with no obligation to proceed further
If you want to ensure your care home energy is on the best possible rates, you can arrange a free energy health check with an expert energy advisor here.
FAQs
No, most qualifying residential care homes don’t have to pay the standard 20% commercial VAT rate. Because care homes provide residential accommodation, they generally qualify for the de minimis domestic rate of 5% VAT.
If you’re currently paying 20%, an energy advisor can help you submit a VAT declaration form to your supplier to correct this and potentially claim back up to four years of overpayments.
Generally, no. If your care home qualifies for the reduced 5% VAT rate as a residential dwelling, you’re automatically exempt from paying the Climate Change Levy on that energy supply. However, it’s worth getting an expert evaluation of your situation.
The PSR is a free UK-wide support service. By registering your care home, you can alert local network operators that your facility houses vulnerable people. This ensures you receive priority updates, advance warnings of planned outages, and emergency support during unexpected power cuts or gas supply interruptions.
A Half-Hourly meter automatically sends your exact energy consumption data to your supplier every 30 minutes. If your care facility has a peak electricity demand of 100kW or more, you must have an HH meter installed.
They’re really useful for large care homes because they eliminate estimated billing and allow suppliers to offer custom pricing based on your continuous 24/7 operating hours.