Can a business have a prepayment meter?
Possibly, but there is no general right to one and availability depends on your supplier and meter. If a supplier does offer business prepayment, get the rates, top-up methods, emergency credit and any debt recovery terms in writing, and ask how you can move back to a credit meter later.
Prepayment means you pay in advance, by topping up, rather than receiving a bill. For businesses it is much less common than for households, and availability depends entirely on the supplier and the meter at your site.
What the rules say
We have not found a rule that either gives every business a right to a prepayment meter or bans them. Ofgem has written to suppliers about treating non-domestic customers fairly during debt collection and disconnection, singling out microbusinesses and people living in premises supplied on a business contract as needing particular care. That letter is not a set of prepayment rules, so ask the supplier for its own policy in writing.
Who might ask for one
- A new or seasonal business that wants to control spend.
- A business with debt, where the supplier proposes it as an alternative to disconnection (see disconnection and reconnection).
- A landlord or tenant sharing a meter.
Questions to ask first
| Question | Why |
|---|---|
| Are the unit rates and standing charge the same as on credit terms? | Prices may differ from credit terms |
| How can I top up, and when is it unavailable? | A shop can't trade with no power on a Sunday |
| Is there emergency credit? | Avoid losing power mid-service |
| Can I switch supplier or move to a credit meter? | You shouldn't be locked in |
| Is debt recovered through top-ups? | Affects how much of each top-up you keep |
Alternatives
- A payment plan; see payment plans.
- Paying by direct debit, which many suppliers discount; see direct debit.
- Monitoring consumption with a smart meter to control spend.
If one is imposed
If a supplier fits or threatens one without proper process, complain in writing, then use the Energy Ombudsman if you're eligible (see who can use it). Citizens Advice also helps microbusinesses.
Read the full prepayment meters guide.
Example: comparing the cost
Suppose a pay-as-you-go tariff costs 3p/kWh more than the credit tariff on 15,000 kWh a year. The extra is 15,000 x £0.03 = £450 a year. Whether that is worth the control it gives depends on your cash flow. The numbers are illustrative; ask for real rates.
Risks to weigh
- Running out of credit at a bad moment, such as a Saturday service.
- Rates or fees that may differ from a credit contract.
- A debt repayment taken from each top-up.
- Limited choice of supplier if you want to switch.
Before you agree: a short checklist
- Get the prepayment rates and the credit-meter rates side by side, for the same term.
- Ask what happens on a bank holiday if top-up points are closed.
- Ask whether a smart meter in prepayment mode can be switched back to credit remotely.
- Get any debt repayment rate in writing, as pounds per week or a share of each top-up.
Your protections
Microbusinesses have additional protections under Ofgem rules; see microbusiness protections. Citizens Advice can explain your position. Keep records of any conversation about a meter change.
Sources
General information only. Energy prices, rules and supplier terms change; check the latest position with your supplier, Ofgem or the Energy Ombudsman before you act.