Unit rate

What it is

The unit rate is the price per kWh, quoted in pence. Your bill multiplies it by the energy you used. It sits alongside the standing charge, which is a fixed daily fee.

Where you will see it

On your bill, contract Principal Terms and any quote. Some electricity contracts have two or more unit rates: a day rate and a night rate. Check whether the rate already includes Climate Change Levy; quotes should say. VAT is normally added on top at 20% unless a reduced rate applies.

Why it matters

The unit rate drives most of the bill for medium and heavy users. A small difference adds up. Contract type matters too: a fixed rate holds the rate for the term, while other deals can change it.

Benchmarks

DESNZ reported Q2 2026 non-domestic averages of 24.51p/kWh for electricity and 5.28p/kWh for gas, including CCL. Moneysupermarket Business listed average fixed microbusiness rates of 28.4p/kWh electricity and 8.8p/kWh gas in October 2026, and 40.0p/kWh electricity for out-of-contract customers. Treat those as indicators, not offers.

Worked example

A salon uses 12,000 kWh of electricity a year.

• At 28.4p: 12,000 × £0.284 = £3,408
• At 40.0p out of contract: 12,000 × £0.40 = £4,800

The difference in units alone is £1,392 a year. To test your own numbers use the business energy cost calculator.

Related terms

See business electricity prices per kWh and gas prices per kWh.