Paying too much for business electricity? You’re not alone. But don’t worry—there’s a simple way to understand your bills and lower your costs starting today.
What Are Business Electricity Rates and Why Do They Matter?
Business electricity rates are what companies pay to use electricity. These rates are different from what homes pay. And they can be much higher. That’s why it’s so important to pay attention to them.
When you run a business, electricity keeps the lights on, the machines running, and your team working. So, if your rates are too high, you’re losing money. Every dollar spent on power is a dollar you can’t use to grow your business.
Let’s look at how they work, what affects them, and how you can lower them.
How Are Business Electricity Rates Set?
Electricity prices change based on many things. Here are the main factors that set business electricity rates:
1. Your Business Size
Big businesses often use more power. So, they may pay lower rates because they buy in bulk. Smaller businesses use less energy and might pay more per unit.
Real-world data: In the UK, small businesses pay about 18.2p per kWh, while large businesses often pay under 14p per kWh based on 2023 data from Ofgem.
2. Your Business Location
Different places have different rules and supply chains. If your area is far from power stations, it might cost more to deliver electricity. Some regions may also charge taxes or fees that others don’t.
3. The Time of Day You Use Electricity
Some businesses pay more during the busiest times of day. These are called “peak hours.” If you use most of your power at night or early morning, you might pay less.
4. Your Contract Type
If you’re on a fixed-price contract, your rate won’t change for a while. But if you have a variable contract, your price can go up or down with the market. Choosing the right one is key.
How to Check If You’re Overpaying
Most business owners don’t know what they’re paying for electricity. But you should! Here’s what to do:
Step 1: Look at Your Current Bill
Check your rate per kWh. Also look for standing charges (fees just for having an account). These add up fast.
Case study: A hair salon in Manchester saved £1,200 a year by finding a supplier with a lower standing charge and lower kWh rate.
Step 2: Compare With Market Rates
Use a price comparison site or ask an energy broker. They can show you what other companies like yours are paying.
Step 3: Check Your Usage Pattern
Do you use more power in the morning, afternoon, or evening? A smart meter can help you track this. You can then switch to a time-of-use plan that matches your habits.
Ways to Lower Your Business Electricity Rates
Now let’s talk about action. Want to pay less? Try these proven steps:
1. Switch Energy Suppliers
This is the fastest and easiest way to save. Many businesses stay with the same supplier for years and overpay. You can often cut costs by 10% to 30% just by switching.
Example: A small bakery in Leeds saved £2,500 per year by switching from a big-name supplier to a smaller, green energy provider.
2. Negotiate a Better Deal
If you like your current supplier, ask for a better rate. Use quotes from other companies as leverage. They’d rather keep you than lose you.
3. Use Less During Peak Hours
This is called “load shifting.” If you run machines at night instead of 4–6 p.m., you can pay less. Adjust your schedule if possible.
4. Get a Smart Meter
A smart meter shows how much electricity you’re using in real time. It helps you find areas to cut back. Over 50% of UK businesses already have one—and they’re saving money each month.
5. Invest in Energy-Saving Tools
Switch lights to LEDs. Use power strips that auto-turn off. Maintain heating and cooling systems better. These small upgrades lower your usage without affecting your business.
Stats: According to Carbon Trust, small businesses can cut energy bills by up to 20% with simple changes.
Why Picking the Right Contract Matters
There are two main types of electricity contracts:
Fixed-rate Contract
You pay the same price per unit for a set period (e.g., 12 months). This protects you from future price hikes.
Variable-rate Contract
Your price can go up or down with the market. It’s risky, but you might save when prices drop.
Choosing the right contract depends on whether you want stability or possible savings.
Tip: If you like budgeting and hate surprise bills, go fixed.
Mistakes That Cost Businesses Money
Even smart business owners make these common mistakes:
Sticking with the same supplier “just because.”- Ignoring contract end dates. When your deal ends, you might be moved to a higher “out-of-contract” rate.
- Not reviewing usage patterns. You might be wasting power and not even know it.
Can Green Energy Help You Save?
Yes—and it’s more than just good for the planet.
Some green energy suppliers offer better rates. They also help future-proof your business in case of government rules on pollution.
Case Study: A printing company switched to a 100% renewable supplier and saved £1,800/year. Their customers also liked the eco-friendly choice.
Quick Tips to Make Smarter Choices
- Read your meter every week. Know what you use.
- Avoid rolling contracts. Always negotiate when your deal ends.
- Find out if you can join a group buying plan in your area.
Conclusion
Want to pay less for business electricity? Here’s what to do.
- Check your current rate and usage with a smart meter.
- Compare offers from other suppliers—it’s fast and free.
- Choose the right contract and change usage habits to save money.
Small changes = big savings. Start now and watch your power bill shrink.
