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Energy bills are increasing continuously. As a result, small and medium sized businesses are facing difficulties to continue business smoothly. Our aim is to reduce your energy rates by independently comparing the best available tariffs on the market. Our UK-based, specialist Business Energy Advisers can help you to reduce your business energy bills today.
We also review energy supply contracts annually which enable to make sure that businesses are not renewed or automatically rolled over onto non-competitive rates. If you are looking for a fixed term contract with fixed price or more flexible solutions for your business energy.
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A guide to business gas tariffs!
With a fixed-rate energy contract, the price you pay per unit of energy remains the same for the duration of your contract. However, your monthly bill will still vary depending on how much energy you use.
With a variable-rate energy contract, the price per unit of energy you pay can go up or down at any time, depending on changes in the energy market. This type of tariff comes with some risk, as you could end up paying more for your energy if the market price increases.
If you don’t switch energy suppliers or renew your contract at the end of your current contract, your supplier will usually automatically place you on an extended deal.
This means that you will continue to receive energy from your current supplier, but at a different price. Extended deals are typically more expensive than standard contracts, so it is important to be aware of this if you are placed on one.
If you don’t take any action at the end of your current energy contract, your supplier will automatically place you on a new contract, typically at a higher price. This is known as a rollover contract.
Buying all the gas your business needs upfront can be a good way to save money, as you get the wholesale price. However, this is a risky option for smaller businesses, as the upfront costs can be high.
An out-of-contract tariff is a rolling contract with high rates that energy suppliers offer to customers who don’t have a formal contract. This is a bad deal, as you will likely be overpaying for your energy.
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How is the amount of money I owe for my
business gas usage determined?
To calculate your business gas bill, your supplier will first multiply your meter reading by your unit rate. This will give you the total amount you owe for the gas you have used. The supplier will then add the standing charge to this amount to give you your final bill total.
Average gas kWh Prices by business size
|
Business size
|
Annual usage
|
Unit price (per kWh)
|
Daily standing charge (pence)
|
Annual cost
|
|---|---|---|---|---|
|
Micro business
|
1,000 to 5,000 kWH
|
11.2p
|
30.0p
|
£1,508 (based on annual usage of 8,000 kWh)
|
|
Small business
|
5,000 to 10,000 kWh
|
15.3p
|
60.0p
|
£3,000 (based on annual usage of 12,000 kWh)
|
|
Medium business
|
10,000 to 30,000 kWh
|
21.1p
|
90.0p
|
£6,000 (based on annual usage of 17,000 kWh)
|
|
Large business
|
More than 50,000 kWh
|
28.0p
|
140p
|
£10,500 (based on annual usage of 25,000 kWh)
|
Disclaimer: Energy prices can change every hour, so the prices you are quoted may be different from the averages shown. Prices may also vary depending on the type of meter you have and where your business is located. This information was updated in June 2023.
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Discount Scheme for Businesses' Energy Bills
The Energy Bill Discount Scheme (EBDS) is a government scheme that provides a discount on energy bills for eligible businesses in the UK. The scheme was launched in April 2023 and is due to run for 12 months.
Click here to find out more about the Energy Bill Discount Scheme.
|
Business size
|
Wholesale Price Threshold
|
Maximum Discount
|
|---|---|---|
|
Non electricity-intensive industries
|
20.5p/kWh
|
1.961p/kWh
|
|
Electricity Intensive Industries
|
12.5p/kWh
|
8.9p/kWh
|
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Frequently Asked
Questions
There are two main types of business gas tariffs in the UK: fixed-price tariffs and variable-price tariffs.
- Fixed-price tariffs: With a fixed-price tariff, you will pay the same price per unit of gas for the duration of your contract. This can be a good option if you want to budget your energy costs and avoid the risk of price increases.
- Variable-price tariffs: With a variable-price tariff, the price per unit of gas can change at any time. This can be a good option if you are comfortable with taking on some risk, as you could potentially save money if the price of gas falls.
Dual fuel means getting your electricity and gas from the same supplier. This can make billing easier, as you only have to receive one bill for both utilities. Some suppliers offer discounts for dual fuel customers, but it is important to compare multiple deals and tariffs before choosing one.
The energy price cap is a limit that is placed on how much suppliers can charge for gas and electricity on a standard variable tariff.
To read our full guide on the price cap, read our full breakdown and what it means for you in the future.
Whether or not you can get a smart meter depends on if your gas supplier offers them and where you live. The government is aiming to have smart meters installed in at least 85% of homes in the UK by the end of 2024.
To request a smart meter, you can either log onto your supplier’s website or call their helpline. An engineer will then be scheduled to install your smart meter.
The price per kWh for gas is always cheaper than electricity. Electricity is generally 3x more expensive per kWh.
Your MPRN (Meter Point Reference Number) is a unique number that identifies your gas meter. It is also sometimes referred to as an “M” number or “supply number.”
Reducing your gas usage can help you save money, but it won’t be as effective if you’re already paying high rates. You can compare commercial gas prices per kWh yourself, but this can be time-consuming and difficult. As an alternative, you can ask LGP to get immediate pricing from UK gas suppliers, which will give you competitive pricing when you’re ready to switch.
Most businesses pay 20% VAT on their business gas, but some businesses, such as charities and non-profit organizations, may be eligible for a VAT reduction. To find out more, contact your business gas supplier and request a VAT declaration form.