Business electricity prices per kWh in the UK

The headline numbers

Two different kinds of figure circulate, and mixing them up leads to bad decisions.

• Official average: the government's Quarterly Energy Prices (September 2026 edition) shows an average non-domestic electricity price of 24.51p/kWh for April to June 2026, including the Climate Change Levy. This is an average across all businesses and contract ages, so it is a benchmark, not an offer.
• Indicative new fixed deals: comparison site Moneysupermarket Business published average fixed rates for October 2026 on 21 October 2026. Its page has some internal inconsistencies, so treat the figures as a rough guide.

Size (as labelled by publisher)	Avg unit rate	Avg standing charge
Micro	28.4p/kWh	58.0p/day
Small	27.2p/kWh	118.9p/day
Medium	27.7p/kWh	90.1p/day
Large	26.1p/kWh	173.0p/day
Out-of-contract	40.0p/kWh	254.0p/day

Source: Moneysupermarket Business, 21 October 2026. Another commercial source, Aquaswitch, reported one-year fixed electricity in August 2026 of 27.2p for small users, 25.2p for medium and 25.0p for large. Rates move weekly, so a quote today beats any table.

Why the official average is lower than new quotes

The government average includes older contracts agreed when wholesale prices were different, and it covers larger users who pay less per unit. A shop signing a new one-year deal should not expect to match it. Our page on rates by business size goes deeper on the bands.

What the unit rate does and does not include

The unit rate is the price per kilowatt hour (kWh) of electricity you use. A quote usually rolls several things into it:

• the wholesale cost of the power and supplier margin,
• network charges for the wires (see TNUoS and DUoS),
• policy and scheme costs, and
• in some tariffs, extras such as a broker fee.

Whether these are bundled or listed separately depends on whether the contract is fixed or pass-through; see pass-through vs fixed charges. Two quotes of 27p may not be like for like.

On top of the unit rate come the daily standing charge (see standing charges), the Climate Change Levy (CCL) and VAT. The CCL main rate is 0.801p/kWh from 1 April 2026 and 0.827p/kWh from 1 April 2027, according to GOV.UK. VAT is 20% for normal business use. Reduced 5% VAT applies to small amounts (up to 33 kWh a day, about 1,000 kWh a month) or qualifying domestic and charity non-business use, per HMRC VAT Notice 701/19: fuel and power. Electricity supplied in Great Britain for qualifying domestic or charity non-business use is temporarily zero-rated from 1 October 2026 to 30 June 2027 (HMRC first announced an end date of 31 March 2027). Ordinary business use stays at 20%.

Worked example: turning a quoted rate into a real bill

A shop uses 20,000 kWh a year on a micro-business indicative rate of 28.4p/kWh and 58.0p/day.

Item	Sum	Amount
Units	20,000 × £0.284	£5,680.00
Standing charge	365 × £0.58	£211.70
Subtotal		£5,891.70
CCL	20,000 × £0.00801	£160.20
Subtotal incl. CCL		£6,051.90
VAT at 20%	£6,051.90 × 0.2	£1,210.38
Total		£7,262.28

The "effective" rate before CCL and VAT is £5,891.70 ÷ 20,000 = 29.5p/kWh, higher than the headline 28.4p because of the standing charge. Our VAT and CCL calculator does this for your numbers. Most VAT-registered businesses reclaim the VAT, so the cost that matters is usually the pre-VAT figure; see reclaiming VAT.

Check whether you are exempt from the CCL: the small-amount rule is under 1,000 kWh a month for electricity.

Day, night and other time-based rates

Some meters record use in separate time bands. A day rate applies in the main part of the day and a cheaper night rate overnight. If you run equipment, storage heaters or a bakery overnight, a split tariff can pay off; if most use is in the day, it can cost more. Read day and night rates before agreeing. Larger sites on half-hourly meters can be charged differently by time of day; see half-hourly meters.

What moves your rate up or down

• Contract type: fixed, flexible or out-of-contract. Out-of-contract rates in the table above are about 11.6p higher per kWh than the micro fixed average (40.0 minus 28.4).
• Volume and load shape: bigger, steadier users get cheaper units.
• Region: network charges differ across Great Britain; see why charges vary by region.
• Timing: wholesale prices on the day, and credit checks; see credit scores and prices.
• Broker fees: may be inside the unit rate. Brokerage costs must be shown in your contract's Principal Terms.

Why 2026 quotes carry higher network costs

Part of every electricity price pays for the national transmission network through Transmission Network Use of System (TNUoS) charges. Supplier TotalEnergies said in February 2026 that published TNUoS rates for 2026/27 were about 60% higher than the year before, as Ofgem's network price control funds new investment. Depending on your contract, that cost may sit in your unit rate, your standing charge or a separate pass-through line, which is another reason to compare total annual cost rather than one headline figure.

Worked example: does a day/night split pay?

Illustrative rates, not market prices. A bakery uses 30,000 kWh a year, 12,000 of it overnight.

• Single rate at 27p: 30,000 × £0.27 = £8,100.
• Two rates, 29p day and 21p night: (18,000 × £0.29) + (12,000 × £0.21) = £5,220 + £2,520 = £7,740.
• Saving on the split tariff: £8,100 − £7,740 = £360 a year.

Now suppose only 4,000 kWh is used at night: (26,000 × £0.29) + (4,000 × £0.21) = £7,540 + £840 = £8,380, which is £280 more than the single rate. The split only pays if a real share of your use happens in the night hours, so check your meter registers before agreeing.

Checking your own price per kWh

1. Take the units and the energy charge (before standing charge, CCL and VAT) from a recent actual-read bill.
2. Divide the charge by the units to confirm the unit rate matches your contract.
3. Add the standing charge for the period and divide again to see your effective rate.
4. If the bill uses estimated readings, repeat with the next actual reading before drawing conclusions.

Finding the cheapest rate honestly

"Cheapest" depends on the whole annual cost, not just the p/kWh. Always compare total annual cost at your own usage, check term length and exit terms, and read whether the cheapest deal is the best. There is no Ofgem price cap on business energy; see business energy price cap.

Next steps

1. Find your annual kWh on your last bill.
2. Use the cost calculator to estimate a full bill.
3. Get at least two quotes with unit rate, standing charge and any broker fee.
4. Compare totals, not headline rates.

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