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Average Business Energy Bills

Average business energy bills

If you’re running a business, you’ve probably got more interesting things to think about than the contents of your energy bill. But while it may be tempting to just pay every month and forget about it, this could leave you out of pocket.

It’s worth getting to know your energy bill so you can make sure it’s accurate, and ensure you’re not being charged for anything you shouldn’t be. Understanding your bill is easier than you might think - it doesn’t take long to get familiar with it, and once you know what you’re looking at you’ll be in the best position to make sure you’re getting the best deal for your business.

How to read your business energy bill

Your energy supplier crams a lot of information into your bill. The way it’s structured will vary from one supplier to another, but they all include the same information.

  • Bill date, bill number and VAT number: the date the bill was issued, the number of the bill (so your supplier can identify it quickly) and your business’s registered VAT number.
  • Account number: your customer account number - this is one of the ways your supplier can identify you.
  • Contract details: a brief outline of the energy contract you’re currently on.
  • Billing period: the period of energy usage you’re being charged for.
  • Type of charges (accurate/estimated): the type of reading your charges are based on. Accurate charges are based on meter readings, whereas estimated readings are just that - an estimate.
  • Outstanding charges from previous bills: this shows any amount you still owe from previous bills.
  • Charges for the billing period: the charges you’ve incurred during the billing period.
  • VAT charges: the amount of VAT that’s been added on to your bill.
  • Total amount due: the amount you’re due to pay, including this month’s costs, any outstanding amount from a previous bill, and the VAT.
  • MPAN/MPRN number: unique reference numbers used by your supplier to identify your property and your meters.
  • Breakdown of charges: a breakdown of all your charges, to show you exactly what you’re being charged for.

What costs are included in your business energy bills?

Your business gas and electricity rates are made up of two types of charges:

  • Daily standing charge: the amount it costs your supplier to physically supply gas and electricity to your property, plus a contribution towards the cost of maintaining the national grid.
  • Charge per unit (kWh) of energy: the amount you pay for each unit of gas or electricity you use.

To break these charges down, these are the main things that contribute to your standing charge and your unit rates:

  • Wholesale costs: the amount your supplier pays to acquire the energy you use - this makes up part of your unit rate. When wholesale costs go up, suppliers usually tend to pass these increases on to their customers- this means your unit rate would go up.
  • Transmission use of system charges (TNUoS): this covers what your supplier has to pay towards the upkeep of the national grid, which is how gas and electricity are transported to your premises. This usually makes up part of your standing charge, and can vary depending on where your business is based.
  • Paying for distribution use of system (DUoS): this covers the costs incurred by your Distribution Network Operator (DNO) – a company licensed to distribute electricity in your area. It includes day charges and night charges, as well as maximum supply requirements for larger businesses.
  • Climate Change Levy (CCL): a tax on each unit of energy your business uses, designed to encourage businesses to be more energy efficient and reduce their carbon footprint. It’s possible to be exempt from this levy, depending how much you’ve done to improve your business’s energy efficiency.
  • VAT: your supplier will usually charge VAT at 20%, but it’s possible to cut this down to as little as 5% if you use less than 33 kWh of electricity of 145 kWh of gas per day.

What is an average business gas bill?

The amount you’re charged for business gas varies depending on your supplier and where your business is based, but these average figures should give you a general idea of what to expect to pay.

The average unit price for business gas is 2.84p per kWh, with an average standing charge of 40p per day.

  • A small business using 10,000 kWh per year has an average gas bill of £430 a year
  • A medium business using 25,000 kWh per year has an average gas bill of £856 a year
  • A large business using 45,000 kWh per year has an average gas bill of £1,424 a year

What is an average business electricity bill?

As with gas charges, the amount you pay for business electricity is influenced by your business’s location and your energy supplier, but these average amounts will give you an idea of what to expect to pay:

Business size Average annual electricity usage Average price (per kWh) Average annual electricity bill
Micro business 7,500 kWh 14.16p £1,164
Small business 15,000 kWh 13.59p £2,137
Medium business 25,000 kWh 12.58p £3,240
Large business 60,000 kWh 12.24p £7,435

How to cut your business energy bills

If you think you’re paying over the odds for your business energy, there are things you can do to bring your bills down.

  • Get to know your energy bill: your bill will include fixed and variable charges, so you might be able to negotiate a better deal on the variable elements, or change your habits so you incur lower charges.
  • Review your contract: talk to your supplier to negotiate a better deal.
  • Choose the right contract period: the length of your contract can affect how much you’re charged, so do your research and make sure your contract length gives you the best deal for your business.
  • Make your business more energy efficient: reduce the amount of energy your business uses by using energy efficient lighting and computers, encouraging your staff to go green, and installing energy generation technology. There can be an upfront cost associated with this, but this should be outweighed by the savings you make on your business energy bills in the long run.
  • Switch energy supplier: switching business energy supplier can knock hundreds of pounds off your annual gas and electricity bills. Call Make It Cheaper today on 0800 970 0077. Or, if you’d prefer, leave your details in the form at the top of the page and we’ll call you back.
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