Is gas or electricity cheaper per kWh for a business?
Gas is cheaper per kWh. DESNZ's April to June 2026 averages for non-domestic customers, including Climate Change Levy, were 5.28p/kWh for gas and 24.51p/kWh for electricity, so electricity cost roughly 4.6 times as much. Heat pumps narrow the gap in running costs.
Gas is much cheaper per kWh. DESNZ's figures for April to June 2026 put the average non-domestic price at 24.51p/kWh for electricity and 5.28p/kWh for gas, both including the Climate Change Levy. Electricity cost about 4.6 times as much per kWh.
The numbers side by side
| Source | Electricity | Gas |
|---|---|---|
| DESNZ, Q2 2026 non-domestic average, including CCL | 24.51p/kWh | 5.28p/kWh |
| MoneySuperMarket Business, October 2026, micro fixed average (indicative) | 28.4p/kWh | 8.8p/kWh |
The second row gives a ratio of 28.4 ÷ 8.8 = about 3.2 times. The ratio changes with the source, size of business and date, but electricity is always the dearer fuel per kWh.
Why the gap exists
- Electricity is made from other fuels and carried over costly wires, and a larger share of network and policy costs is recovered through electricity prices.
- Gas wholesale is cheaper per unit of energy, and Ofgem notes gas often sets the wholesale electricity price. See why electricity tracks gas.
- Standing charges differ too: the same MoneySuperMarket page shows 58.0p/day for micro electricity and 44.9p/day for micro gas.
The cheaper unit is not always the cheaper way to heat
A kWh of electricity can deliver more heat than a kWh of gas when used in a heat pump. Here is an illustration. It uses two assumptions of ours (a 90% efficient gas boiler and a heat pump delivering 3 kWh of heat per kWh of electricity), and real systems vary.
To supply 20,000 kWh of heat:
- Gas boiler: 20,000 ÷ 0.9 = 22,222 kWh of gas × £0.0528 = about £1,173
- Heat pump: 20,000 ÷ 3 = 6,667 kWh of electricity × £0.2451 = about £1,634
- Plain electric heaters: 20,000 × £0.2451 = £4,902
So gas still wins on these assumptions, but a good heat pump narrows the gap a lot, and the figures exclude installation, standing charges and VAT. Our page on business heating efficiency has more.
Check units before comparing
Gas meters may show cubic metres or hundreds of cubic feet. Convert with the gas units to kWh converter, or your comparison will be wrong.
What about the standing charge and tax?
Per-kWh prices are only part of the picture. Both fuels carry a daily standing charge, and the Climate Change Levy applies to both at the same main rate: 0.801p/kWh from 1 April 2026, rising to 0.827p/kWh from 1 April 2027. Because the levy is a fixed amount per kWh, it is a bigger share of the gas price than of the electricity price. On gas at 5.28p, 0.801p is about 15 per cent of the unit price, while on electricity at 24.51p it is about 3 per cent. VAT at 20% is then added to both unless the reduced rate applies.
Next steps
For each fuel, see business gas prices per kWh and electricity prices per kWh. If you use both, ask whether dual fuel helps.
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.