Written by Mark Langshaw Reviewed by Jessica Peck
Sources
21 August 2026
First Published
If you run a restaurant, pub, hotel, or any sort of hospitality business, your energy bill likely makes up a significant part of your overheads. So it’s important to choose the right energy arrangement for your usage and business type, as it will help you manage long-term operating costs.
If your hospitality business is struggling with high utility costs, reviewing your energy contract is one of the fastest ways to improve your finances. Here, we explain how commercial energy works for restaurant and hospitality businesses, where to get the best rates and tariffs, and practical steps to slash your consumption.
Are there energy deals for restaurant businesses?
Although there are no specific energy tariffs for restaurants, there are commercial energy contracts designed to match the high consumption and unique operating hours of the hospitality industry.
Because restaurants and pubs often use energy during peak evening hours and weekends, you can access bespoke commercial tariffs that differ entirely from standard business energy deals.
Depending on your energy usage and the number of sites you operate, suppliers can build custom contracts (such as multi-site tariffs or Time of Use contracts) to suit your exact trading hours and volume.
How your tariffs will be calculated
Unlike domestic energy, commercial energy pricing is highly bespoke. When an energy supplier calculates a tariff for your restaurant or hospitality venue, they will factor in:
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Unit Rate: This is the price you pay for the actual gas or electricity you consume. For high-usage commercial kitchens, securing a low unit rate is critical.
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Standing charge: A fixed daily fee covering grid distribution and network maintenance. Hospitality venues often require high-capacity connections, meaning your standing charge may be higher than a standard shop.
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Meter type: Most busy restaurants consume enough electricity to require a Half-Hourly (HH) meter. This automatically sends your exact usage data to the supplier every 30 minutes, allowing for highly accurate, bespoke pricing.
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Taxes and levies: Most hospitality businesses pay the standard 20% VAT rate and the Climate Change Levy (CCL). However, small cafes with very low usage (under 33 kWh of electricity a day) may qualify for the de minimis 5% VAT rate.
How to get the best energy deal for a hospitality business
To secure the best rates and find the most competitive deal for your hospitality business, here are some simple steps to follow:
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Speak to an expert: Before looking at tariffs, have an experienced business energy advisor review your current bills, meter data, and operations. An energy expert can audit your consumption patterns to spot hidden billing errors, check for overpaid VAT, and determine the contract type your venue actually needs.
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Leverage your hours: If your pub or restaurant does the majority of its trade in the evenings and weekends, look for Time of Use (ToU) tariffs. These offer cheaper unit rates during off-peak hours, which can drastically reduce the cost of something like overnight refrigeration.
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Lock into fixed rates: The energy market can be unpredictable. Securing a fixed-rate contract for a set period (usually up to 4 years) protects your business from sudden price spikes, so you can plan ahead and forecast menu margins and projected overheads.
If you’d like to have a free initial chat with an experienced business energy advisor, you can get started below.
Get a free business energy healthcheck
Switching to a new business energy supplier
Switching energy supplier for your hospitality business can be a simple process with some expert guidance. There’s no physical disruption to your premises, no need for new pipes or cables, and absolutely no risk of your power being temporarily cut off during a busy service.
The most important factor when switching is timing your contract renewal window. Commercial energy contracts don't have cooling-off periods. If you don't negotiate a new deal before your current one expires, your supplier will automatically roll you onto uncompetitive out-of-contract (deemed) rates.
To switch, you simply sign a Letter of Authority (LOA) with your commercial energy broker. This allows them to search the whole market, negotiate with suppliers on your behalf, and handle the entire switchover process while you focus on running your hospitality business.
Renewable energy options for restaurants
Sustainability is becoming a major selling point in the hospitality industry. Diners are increasingly more eco-conscious, and operating a "greener" restaurant can help you become more efficient while also driving new business. Here are some renewable options to consider:
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Commercial heat pumps: Air-source or ground-source heat pumps are ideal for restaurants because they deliver exceptional energy efficiency. Many commercial heat pump systems can handle high-volume domestic hot water needs for the kitchen while providing integrated heating and air conditioning for the dining area.
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Green energy tariffs: Many business energy suppliers now offer 100% renewable electricity tariffs backed by REGO (Renewable Energy Guarantees of Origin) certificates, allowing you to power your venue cleanly without upfront infrastructure costs.
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Solar power: If you own your hospitality premises, installing solar panels on the roof can directly offset the heavy daytime electricity draw of prep shifts, refrigeration, and front-of-house lighting.
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Biogas (green gas): For heavy gas users relying on items like traditional gas ranges, some suppliers offer green gas (biomethane) tariffs sourced from agricultural and food waste, helping you close the loop on your restaurant's carbon footprint.
Small business energy for restaurants
If your restaurant is classed as a small business or micro-business - perhaps a cafe, takeaway or small pub - your energy needs will likely look different from something like a large chain of restaurants. For example, you may use a standard commercial energy meter rather than a Half-Hourly meter.
For micro-businesses, the biggest threat is neglecting your contract end date. Because smaller venues don’t have the purchasing power of a large group, energy providers are less likely to offer you their best rates. So, it’s vital to compare the whole market rather than simply accepting the first renewal quote from your current supplier.
Tips to save money on your hospitality business energy bills
Energy waste in a commercial kitchen or hospitality business can quickly erode your profit margins. Implementing a few hospitality-specific changes can yield massive savings:
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Upgrade kitchen equipment: Traditional gas hobs lose lots of heat to the surrounding air, forcing your extraction and HVAC systems to work twice as hard. Switching to induction cooking is much more energy-efficient and can keep a kitchen drastically cooler.
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Optimise refrigeration: Walk-in fridges and freezers run constantly. Ensure door seals are airtight, install plastic strip curtains to prevent cold air from escaping during busy service, and regularly clean the condenser coils so the motors don't overwork. Also, ensure your energy tariff suits your refrigeration needs.
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Manage dishwashers: Commercial dishwashers are incredibly energy-intensive because they rapidly heat water to high temperatures. Train your kitchen porters to run only full racks, rather than half-empty cycles during a busy rush. Also, consider using timers to run overnight for possibly cheaper rates.
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Automate dining room environments: Install tools such as smart thermostats and zoned heating so you don't pay to heat empty rooms. Also, consider swapping all front-of-house lighting to dimmable LEDs (this may even help with atmosphere and ambience).
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Consolidate multiple sites: If you run a chain of cafes or several hospitality locations, don’t leave them on separate, mismatched contracts. Your energy broker can negotiate a multi-site energy deal that unlocks cheaper wholesale rates and aligns all locations to a single renewal date.
Get a free energy health check for your restaurant
Running a busy hospitality venue leaves very little time to sit on hold with energy suppliers or read through dense contract terms. But unfortunately, if you ignore your utilities, you could end up paying uncompetitive rates that can quickly eat into your hard-earned profits.
Here’s why hospitality businesses across the UK use Money Helpdesk to help improve their commercial energy arrangement:
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Access to specialist energy advisors for hospitality businesses
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Complete market comparisons to find the best tariffs and rates
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Expert guidance on how to handle switching energy suppliers
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Free initial energy review with no obligation to proceed further
If you want to ensure your hospitality business is on the best possible rates, you can arrange a free energy health check with an expert energy advisor here.
FAQs
Yes, most restaurants, pubs, and hotels pay the standard 20% VAT rate on their commercial energy. Only businesses with exceptionally low energy consumption (under 33 kWh of electricity or 145 kWh of gas per day) qualify for the 5% de minimis VAT rate, which is very rare for commercial kitchens.
A Half-Hourly meter automatically sends your exact energy consumption data to your supplier every 30 minutes. If your hospitality business has a peak electricity demand of 100kW or more, you must have an HH meter.
They are worthwhile for busy restaurants because they allow suppliers to offer highly accurate, tailored pricing based on your exact operating hours.
If you expand and open new locations, you don’t need to manage multiple separate energy contracts. A commercial energy broker can help you set up a multi-site tariff.
This aligns all your hospitality venues onto a single contract with one renewal date, reducing your admin and leveraging your combined energy usage to negotiate cheaper wholesale rates.