Business Electricity

What’s the best energy supplier for your business?

We compare quotes from a panel of suppliers to find a deal that works for your business. If you’d prefer to switch to any specific suppliers on the list, let us know.

If you run a large, high-energy consumption business, we offer a range of additional services, including bespoke procurement, bill validation, metering and data collection, and meters for multiple sites. We can also compare deals from a range of other providers, including: 

How much should your business pay for energy?

When you compare business energy rates, it’s unlikely that the rates you’re quoted will be cheaper than the rates you’re currently paying. This is because inflation means prices tend to go up over time. If you’re renewing after a long-term fixed deal, rates may have risen considerably since you last took out a new contract.

And even though energy prices have been coming down since they spiked in 2022, and the market has become less volatile, rates are still higher than at any point since about September 2021.

At iB12, we aim to find the best possible rates for your next energy contract compared to what you would be facing elsewhere or your current supplier’s out-of-contract rates. Unless you signed a contract when prices were at their highest, it’s unlikely that you’ll be able to get rates lower than those you’re currently paying.

Our experts will support you with the switch, but it always helps to be armed with a bit of knowledge before you run a business energy comparison. When looking for the best business energy rates, it’s worth knowing what rates similar-sized businesses are paying.

To find out what the average business gas prices per kWh are in February 2024, check out the table below:

Latest business gas rates in February 2024

To find out what the average business electricity prices per kWh are in February 2024, check out the table below:

Latest business electricity rates in February 2024

^{Note: Prices correct as of February 2024. Rates and bill size may vary according to your meter type and business location. The prices you’re quoted may be different from the averages shown. The figures shown are the average unit rates and standing charges quoted by iB12 per business size from February 1 to February 7, 2024. Rates do not include any Energy Bills Discount Scheme discount.}

How much energy does your business use?

The average amount of energy a business uses will depend upon the size of the business, along with how and why it uses energy.

But to give you a rough idea of how much energy your business should be using, here are the average energy usage figures for SMEs and large businesses:

• Microbusinesses use an average of 10,000 kWh of gas and up to 15,000 kWh of electricity a year
• Small businesses use an average of 25,000 kWh of gas and up to 25,000 kWh of electricity a year
• Medium-sized businesses use an average of 45,000 kWh of gas and up to 50,000 kWh of electricity a year
• Large businesses use more than 65,000 kWh of gas and more than 50,000kWh of electricity a year

To find out more, check out our guide to average business energy consumption.

What is an average business energy bill in 2024?

The amount you pay for your energy will depend upon the type of deal your business is on, how and when you use energy, as well as the energy efficiency of your workplace. The size and location of your business will also play a part.

But, to give you a rough idea of how much you should be paying, check out the following estimates:

^{Note: Prices correct as of February 2024. Rates and bill size may vary according to your meter type and business location. The prices you’re quoted may be different from the averages shown. The figures shown are the average unit rates and standing charges quoted by iB12 per business size from February 1 to February 7, 2024. Rates do not include any Energy Bills Discount Scheme discount.}

What support is the government offering for high business energy bills?

The Energy Bill Relief Scheme was brought in on October 1, 2021, to help businesses struggling with high energy bills, but that support ended on March 31, 2023. On April 1, 2023, it was replaced by the Energy Bills Discount Scheme. This discount scheme will run until March 31, 2024, and no further government support has been announced. 

The scheme is not a business energy price cap. Instead, it offers a discount on the unit rate of eligible non-domestic gas and electricity contracts signed on or after December 1, 2021. Variable, deemed, and out-of-contract rates are also covered by the scheme. And as with the Energy Bill Relief Scheme, you’re not eligible for a discount if the rates you’re paying are below the minimum threshold.   

That’s why it still makes sense to do a business energy comparison and compare business energy suppliers to find the lowest possible rates. Getting a fixed deal means you’ll not be affected by any further price volatility and help you avoid rolling on to your suppliers’ (usually more expensive) out-of-contract rates.

What is the Energy Bills Discount Scheme?

The Energy Bills Discount Scheme is the government’s latest business energy support scheme. It will replace the Energy Bill Relief Scheme from April 1. As with the scheme it’s replacing, it’s not a cap on business energy prices but will instead offer discounted unit rates on fixed-price contracts signed on or after December 1, 2021, as well as deemed and out-of-contract rates, subject to a minimum threshold. 

Who is eligible for the Energy Bills Discount Scheme?

The Energy Bills Discount scheme is open to anyone on a fixed non-domestic energy contract that was signed on or after December 1, 2021. It’s also available on new fixed-rate contracts, as well as any deemed, out-of-contract, or variable-rate contracts. 

If you’re a large business on a flexible purchase or similar contract, you’ll also be eligible. In this instance, it might also be worth finding out if your business falls into the Energy Trade Intensive Industries category as the scheme works differently.

There are some additional conditions though. If your unit rates are below the government’s minimum threshold then you’ll not be eligible for the scheme. And you’ll only get a partial discount if not all of the maximum discount is needed to get your rates to the government threshold level.

For reference, the following discount and threshold rates apply to most businesses:

• Gas – A maximum of £0.00697 (about 0.7p per kWh) off the difference between the wholesale element of the unit rate you pay to your business gas supplier and the price threshold of 10.70p per kWh.  
• Electricity – £0.01961 (about 2.0p per kWh) off the difference between the wholesale element of the unit rate you pay to your business electricity supplier and the price threshold of 30.20p per kWh. 

 The following discount and threshold rates apply:

• Gas – 4.0p off the difference between the wholesale element of the unit rate you pay to your supplier and the price threshold of 9.9p per kWh.  
• Electricity – 8.9p off the difference between the wholesale element of the unit rate you pay to your supplier and the price threshold of 18.5p per kWh.  

What types of business energy deals are available?

When comparing new business energy deals, there are four main types of tariffs to choose from: 

• Fixed term energy tariffs –These usually lasts between one and four years, during which time the unit cost and standing charges stay the same.   
• Blend and extend tariffs – These deals allow you to extend the length of your current contract with the same supplier, who will then reward your loyalty with lower rates. 
• Flex approach tariffs – With this type of tariff you can take advantage of favorable wholesale rates by buying your energy for the months or years ahead, usually when costs are low.   
• Pass-through tariffs – A pass-through tariff splits your bill in two between the wholesale energy costs, which is fixed, and the other elements that make up the unit rates, which vary and are most suited to businesses who don’t need price certainty.  

Each is designed to meet the different needs of business energy users.

What affects business energy prices?

It might feel like energy prices are always rising, but they actually fluctuate, which can make the timing of your switch all the more important. There are a number of reasons why prices go up and down:

• An increase in demand – Energy prices dropped to record lows during the first lockdown of 2020, as industrial energy demand plummeted. But as things have gotten back to normal and the demand for power increases, the prices go up.
• Global events – Oil prices are influenced by global events, and it can all come back to supply and demand – if there’s conflict, uncertainty, or a natural disaster in a country that produces oil or gas, this will limit production and accessibility, which then pushes up prices. For example, in 2019, a political crisis and U.S. sanctions on Venezuela caused a spike in oil prices that pushed up global energy prices.   
• The strength of the pound – As with any commodities, fluctuations in currency value can affect the cost of energy. As the UK imports a lot of its energy from Europe, the strength of the pound against the euro plays a part in costs. If the pound is strong against the euro, then prices should fall as energy is cheaper. If the pound is weak against the euro, prices are likely to rise. Brexit is one reason why prices have risen.     
• The weather – There are a few ways the weather can affect energy prices. A cold winter increases the demand for energy to heat our homes and workplaces and so prices go up. But as we’re using more renewable energy sources – a drop in wind means more natural gas is diverted to power stations, leading to increased prices. Energy suppliers buy wholesale energy in advance, and prices are linked to forecasts. This means that if a ten-day forecast suggests that there will be particularly good weather, then short-term forward prices will probably drop fall. Long-term temperature forecasting is more difficult, but can still affect prices.
• The price cap – Introduced to end ‘rip-off’ energy prices, the price cap has given suppliers a baseline they can use for their energy prices. As predicted by many before the cap kicked in, prices are bunching around the level of the cap, which means there are fewer and fewer competitively-priced deals, even if you switch to a fixed rate tariff. Although the price cap only directly affects domestic energy customers, prices have risen right across the board. 
• Distribution and transport costs – these include green taxes like the Climate Change Levy (CCL) payments and VAT costs which make up other costs you pay for aside from wholesale energy.

What is the difference between business energy and household energy?

There are a number of ways that business energy contracts differ from domestic energy deals, including:

• There are no ‘off-the-shelf’ business energy tariffs. All contracts are bespoke and designed to meet the needs of the individual business
• Business energy contracts are fixed-term with no option to terminate early. Unlike domestic energy deals, there’s no cooling-off period with business energy. It’s important to make sure you know the terms of your contract before you sign.
• New business energy contracts can be signed up to ten months before the current contract’s end date, but the new contract won’t start until the current one has ended. Domestic energy users can switch to another contract at any time. They might be hit with an early exit fee unless their contract has entered its final 49 days.
• Businesses can get gas and electricity from the same supplier but there is no dual fuel option.

The rules are slightly different if you work or run your business from home or if you’re classed as a micro business