Business energy cost calculator

How the calculation works

A business energy bill has two main parts. The unit rate is the price per kilowatt-hour (kWh) you use. The standing charge is a fixed daily amount you pay whatever you use, which covers getting energy to your premises and the supplier's fixed costs. The calculator multiplies your yearly kWh by the unit rate, adds 365 days of standing charges, then adds the taxes.

Climate Change Levy

The Climate Change Levy (CCL) is an environmental tax on energy supplied to businesses. The main rate is the same for electricity and gas: 0.801p per kWh from 1 April 2026 and 0.827p per kWh from 1 April 2027. Supplies small enough to fall under the de minimis limits — below 1,000 kWh a month of electricity or 4,397 kWh a month of gas — are treated as domestic use and excluded. Some quotes show CCL separately, others include it in the unit rate; pick the matching option so it isn't counted twice.

VAT: 20% or 5%?

Business energy normally carries VAT at 20%. The reduced 5% rate applies when average use is no more than 33 kWh a day for electricity or 145 kWh a day for gas, or when at least 60% of the supply is for qualifying domestic or charity non-business use. During the temporary zero rate (1 October 2026 to 30 June 2027), HMRC's VAT notice treats small de minimis supplies as domestic use, so small-user electricity appears to qualify for 0% — the calculator applies that, but confirm with your supplier. The calculator works this out from your annual usage, but your supplier applies it bill by bill, so a business that uses more in winter can see different rates on different bills. Use the VAT and CCL checker to test a single bill.

Temporary zero rate: from 1 October 2026 to 30 June 2027, electricity in Great Britain that would otherwise get the reduced rate (qualifying domestic or charity non-business use) is charged at 0% VAT instead of 5%. HMRC first set the end date as 31 March 2027 and extended it in Budget 2026 (HMRC VAT Notice 701/19: fuel and power). Gas and Northern Ireland electricity stay at 5%, and ordinary business use stays at 20%.

Comparing two quotes

A low unit rate can hide a high standing charge, and the reverse. For a small, low-use site such as a kiosk or lock-up, the standing charge can be the biggest part of the bill; for a busy café or workshop, the unit rate matters far more. Run each quote through the calculator with the same usage figure to see which is really cheaper over a year. Your annual usage is on your bills, usually shown as an estimated annual consumption (EAC) for electricity or an annual quantity (AQ) for gas.

What this doesn't include

Estimates leave out one-off charges, meter costs, late-payment fees, security deposits and any broker fee charged to you directly. Broker commission included in your unit rate or standing charge is already covered — suppliers must show it in the principal terms of your contract.