No standing charge business energy tariffs: who they suit and the trade-off

A no standing charge business tariff has no fixed daily fee. Instead, the cost of keeping your premises connected is folded into the price you pay for each unit (kWh). If you use very little energy, or your site is shut for weeks at a time, that can cost less. If you use a lot, it usually costs more. Whether it suits you comes down to simple arithmetic, shown below.

What a standing charge is

A standing charge is a fixed amount charged every day your supply is connected, whether or not you use any energy. It helps pay for the network that serves your premises and for supplier costs. It appears on your bill as pence per day. Our page on business energy standing charges explains how they are built up and why they vary by region.

For scale, a comparison site's October 2026 panel averages for fixed deals showed electricity standing charges of about 58.0p/day for micro businesses, 118.9p/day for small, 90.1p/day for medium and 173.0p/day for large, and gas standing charges of roughly 45p to 67p/day. These are indicative averages from a commercial publisher; your own figure depends on your meter, region and contract.

How the no standing charge model works

You pay only for what you use, at a higher unit rate. The supplier still has to recover the cost of the connection, so it moves from the daily fee into the per-unit price. For example, Octopus Energy announced a trial no standing charge tariff for business customers in October 2023, on a 12-month fixed term, open to sites in standing charge bands 2 to 4 but not band 1; check whether it, or anything similar, is on offer when you buy. Eligibility rules differ by supplier, so always check the quote.

There is no regulated or standard "no standing charge" product for business. Availability, eligibility, contract length and rates are set by each supplier and can change at short notice. Quotes are normally fixed-term, so you cannot back out in a cooling-off period once agreed.

Who is most likely to benefit

• Seasonal businesses, such as holiday lets, seaside kiosks, village halls or farm shops that close for months. A normal tariff charges you every day you are closed.
• Very low users with a small shop-front, storage unit, or a second site that is rarely used.
• Part-week operators who open a few hours a day.

Who usually loses out

• Cafes, restaurants, pubs and hairdressers that run all day with refrigeration, ovens and lighting.
• Offices with long operating hours, servers or air conditioning.
• Any site that uses a lot of electricity or gas. The higher unit rate is multiplied by every extra kWh.

Worked example: finding your break-even point

Take an electricity quote of 28.4p/kWh plus a 58.0p daily standing charge. Over a year:

• Standing charge: 58.0p x 365 = £211.70.
• Now suppose, hypothetically, a no standing charge tariff has a unit rate 3p higher (31.4p). That is an extra £0.03 per kWh.
• Break-even usage: £211.70 / £0.03 = about 7,057 kWh a year.

Below roughly 7,057 kWh a year, the no standing charge tariff would be cheaper in this example. Above it, you would pay more. At 10,000 kWh the standard tariff costs 10,000 x £0.284 + £211.70 = £3,051.70; the no standing charge one costs 10,000 x £0.314 = £3,140.00, which is £88.30 more. The 3p gap is an assumption: use the actual rates in your own quotes with the same sum.

Seasonal business example

A seaside kiosk closed for 120 days a year still pays 58.0p x 120 = £69.60 in standing charges while shut, on top of the rest of the year. That alone does not decide the choice, but it shows why closed periods push the sum in favour of no standing charge.

Other things to check in the quote

• Contract length and exit. Check fees and terms in the Principal Terms. See contract terms to check.
• Meter type. Some tariffs are limited to certain meter types or profile classes. Learn yours in electricity profile classes.
• Other charges. Climate Change Levy (0.801p/kWh from 1 April 2026) and VAT are on top of either tariff.
• Gas. Gas has standing charges too, and the same sum applies.

Ask for two quotes for the same term: one standard, one no standing charge. Put your annual kWh into both and compare the full-year total, not the headline rates.

Standing charges and your other options

If a low standing charge or none is too costly per unit, the alternatives are to reduce usage, to compare suppliers (standing charges differ widely between them) or to check whether you are on the right meter. Use our business energy cost calculator to total up a year.

Common mistakes when comparing

Comparing unit rates only

A quote with a low unit rate and a large standing charge can cost more than a quote with a higher unit rate and none. Always convert each quote to a full-year total: units used multiplied by unit rate, plus daily charge multiplied by 365 (or 366 in a leap year).

Using the wrong usage figure

If you have only just moved in, or your trading pattern has changed, last year's bill may mislead you. Use a realistic estimate, ideally from meter readings over several months. A shop that adds a second freezer or a salon that adds a tanning bed has moved up the usage scale.

Forgetting the second fuel

Many premises have gas as well as electricity. The best tariff for one fuel may not be the best for the other, and you can usually switch fuels separately. See switching gas or electricity separately.

Ignoring how a bill looks when you are shut

Even with no standing charge, some energy still flows to fridges, alarms and standby equipment. Switching off what you can during closures helps on any tariff.

Next steps

1. Find your annual kWh on a bill or in your supplier portal.
2. Get a standard quote and a no standing charge quote for the same term.
3. Do the break-even sum above.
4. Read the Principal Terms before signing; see how to switch.