How much do energy prices vary for businesses?

The prices charged by suppliers for business electricity, commercial gas and other utilities can vary significantly. It is not uncommon for one business to pay two or even three times more for gas and electricity than a neighbouring business, or even another site owned by the same organisation.

In recent years, we have seen electricity rates range from over 30 pence per kWh to less than 6 pence per unit, depending on the supplier and contract terms.

What rates are available to my business?

Energy suppliers typically require businesses to meet a minimum credit rating before offering contracts. The stronger your credit profile, the more supplier options will be available.

New businesses or those with a weaker credit history may find their options limited to two or three suppliers.

Several factors influence the cost of business electricity and gas, including:

• Postcode and supply region

• Business structure (e.g. sole trader, limited company)

• Industry sector (e.g. retail, manufacturing)

• Annual energy consumption

• Seasonal and time-of-day usage patterns

• Meter profile (the first two digits of the meter reference number range from 00–08; most small businesses fall under profile classes 03 or 04)

• Payment terms

Direct Debit is usually the preferred payment method and is often required to secure the most competitive rates.

Who are the ‘Big Six’ energy suppliers?

The media and Ofgem frequently refer to the “Big Six” suppliers dominating the UK energy market. While there appear to be more suppliers at first glance, several operate under multiple trading names, which can make the market seem more competitive than it is.

The traditional Big Six suppliers include:

• E.ON (also known as Powergen)

• npower (also known as RWE)

• Scottish & Southern Energy (SSE) – including Southern Electric, Scottish Hydro Electric, SWALEC, and Atlantic Electric & Gas

• ScottishPower

• EDF Energy – incorporating London Energy, SWEB and Seeboard

• British Gas – including Scottish Gas, Electricity for Business, Bizzenergy, Enron and Electricity Direct

How can I be sure you are offering the best deal?

We are fully independent and work with a wide range of energy suppliers. 

Our commitment is to present the most competitive options available, regardless of the commission offered by suppliers.

How much does your service cost?

Commission Structure Overview

Our commission is included in your energy unit cost through a small uplift, which is built into the energy contract you agree with your chosen supplier.

This uplift is determined by Business Sense and varies depending on the supplier and your energy usage. As our commission is based on projected future consumption, the figures are estimates.

Example:

A contract is place with an electricity standing charge of £0.50 per day and a unit rate of £0.25 per kWh from a supplier for a fixed 1-year contract. Business Sense then apply an uplift of £0.006 per kWh, resulting in a final contracted unit rate of £0.256 per kWh.

Our commission is calculated as follows:

• Uplift: £0.006 per kWh
• Annual consumption: 50,000 kWh
• Contract term: 1 year

Estimated Commission:
£0.006 × 50,000 kWh × 1 year = £300

In this scenario, our estimated commission represents approximately 2.4% of the total projected cost under the supply contract.

Why do you need a copy of my bill?

Your electricity or gas bill contains key information that allows us to provide an accurate quote.

This includes:

• Your Meter Point Administration Number (MPAN) for electricity (21 digits)

• Your Meter Point Reference Number (MPRN) for gas (10 digits)

• Your consumption levels

• Meter type

• Supply region

This information ensures we obtain accurate prices and suitable contract options for your business.

What does a meter reference number look like?

Your meter reference number normally begins with “S” and is typically printed on your bill.

Example format:

S 03 801 456
23 0123 0123 789

What if I do not know my contract end date?

If you are unsure whether you are currently in a business energy contract or when it expires, your supplier can confirm this through a contract enquiry.

Alternatively, you can authorise us to obtain this information on your behalf.

Types of Business Energy Contracts

What is a rollover contract?

A rollover contract (also known as an evergreen or automatic renewal contract) is an agreement that automatically renews for a further term unless cancelled within a specific notice period.

Unlike domestic energy contracts, most business energy contracts automatically renew if notice is not provided.

Some suppliers renew more than 90% of their customers in this way, often moving them onto significantly higher rates if the contract is not terminated in time.

How can I avoid being placed on a rollover contract?

Each supplier has different rules regarding contract renewal. Suppliers usually contact customers between 60 and 120 days before the contract end date.

This communication often marks the start of the renewal window, during which you must submit written notice if you wish to switch supplier.

In many cases, this window may remain open for only one or two weeks, making it easy to miss.

Does it make a difference if I am a not-for-profit organisation?

In the eyes of energy suppliers, not-for-profit organisations are generally treated the same as businesses. This includes community buildings such as:

• Churches

• Village halls

• Scout huts

However, these organisations can still compare energy prices and switch suppliers.

They may also qualify for:

• Reduced VAT rates

• Climate Change Levy exemptions

These savings can make a significant difference to overall energy costs.

Are there other types of contracts to be aware of?

• Deemed (out-of-contract) rates

What are deemed (out-of-contract) rates?

Deemed rates are usually the highest energy tariffs and typically apply when:

• A business moves into new premises, or

• A previous contract has ended without a new agreement being arranged.

Like 28-day contracts, businesses can normally switch away from deemed rates with 28 days’ notice.

What is a half-hourly (100kW) supply?

Half-hourly meters are typically installed in energy-intensive businesses where peak demand exceeds 100kW during any three months of the previous year.

You may have a half-hourly meter if:

• Your meter has a communications link allowing remote daily readings, or

• Your MPAN begins with “00”.

We have specialist advisers who obtain competitive prices from suppliers operating within the half-hourly market.

What if I am new to a property?

If you have recently moved into new premises, you will initially receive energy from the supplier used by the previous occupant.

However, you will likely be charged deemed (out-of-contract) rates, which are typically higher than average.

It is therefore important to arrange a new commercial energy contract as soon as possible.

If you provide your address, we can:

• Identify your current supplier

• Obtain your meter details

• Compare energy prices

• Recommend the most suitable contract

A meter serial number (Meter ID) is different from an MPAN or MPRN. It is the 9–10 digit number printed directly on the physical meter.

Can you arrange installation of a new meter?

Yes. We can assist with arranging new meter installations or upgrades for both gas and electricity supplies.

This may be required when:

• Dividing a property into multiple units

• Installing separate meters for tenants

• Upgrading a site to support higher energy demand

• Installing half-hourly or maximum demand meters

The Switching Process

Do I need to do anything to switch supplier?

Because each supplier has different rules, the easiest approach is to allow us to guide you through the process.

What happens if my current supplier objects to the transfer?

If the correct notice has been provided, objections are uncommon.

However, suppliers may object if:

• There is outstanding debt, or

• The contract is still active.

We manage the process carefully to ensure any switch proceeds smoothly.

How long does it take to switch supplier?

Switching suppliers usually takes approximately 4–6 weeks.

We manage the entire process on your behalf and will keep you informed throughout. Your energy supply will not be interrupted during the switch.

You will also receive:

• Direct contact details for your adviser

• Ongoing support throughout the contract term

• A renewal reminder before the contract end date

This ensures you always retain the option to switch to the most competitive rates available.

Additional Charges

What rate of VAT applies to business energy?

Business electricity and gas are normally subject to 20% VAT.

However, some businesses qualify for a reduced rate of 5% VAT under the De Minimis rules if their energy consumption is below certain thresholds:

Electricity:

• Average 33 kWh per day (approx. 1,000 kWh per month)

Gas:

• Average 145 kWh per day (approx. 4,397 kWh per month)

Businesses meeting these criteria may be charged the reduced VAT rate on their energy bills.

What is the Climate Change Levy?

The Climate Change Levy (CCL) is a UK government tax introduced in 2001 on energy used by businesses, agriculture and the public sector.

Its purpose is to encourage organisations to improve energy efficiency and reduce greenhouse gas emissions.

Current rates include:

• Electricity: 0.811p per kWh

• Gas: 0.406p per kWh

Which organisations qualify for reduced VAT and CCL exemption?

Certain organisations and property types may qualify for reduced VAT and exemption from the Climate Change Levy, including:

• Residential accommodation

• Care homes and hospices

• Armed forces accommodation

• Children’s residential facilities

• Monasteries and nunneries

• Some charitable organisations

• Self-catering holiday accommodation

• Caravans and houseboats

These properties may qualify for the reduced 5% VAT rate on gas and electricity.