Restaurant business energy: what a café or takeaway pays

A restaurant, café or takeaway is one of the more energy-hungry small businesses: heat for cooking, cold for storage, hot water for washing, and ventilation to keep it all comfortable. This guide covers what drives the bill, how it is calculated and where the real levers are.

Where the energy goes

We do not quote a typical annual kWh for a restaurant, because use depends on covers, opening hours, menu and equipment. Your own last 12 months of bills are the only reliable benchmark.

• Cooking. Hobs, ovens, fryers and grills run on gas, electricity or both. This is often the biggest single use.
• Refrigeration. Fridges and freezers run 24 hours a day, including when you are closed.
• Hot water and dishwashing. A commercial dishwasher heats a lot of water.
• Extraction and ventilation. Canopies pull heated air out of the building, which you then have to replace.
• Heating, cooling and lighting for the dining area.

An Everards guide to pub energy (the same logic applies in a kitchen) points out that roughly 65% of the energy going into cooking equipment leaves through the canopy as hot air, only about 5% ends up in the food, and the remaining 30% warms the kitchen. In other words, most of what you pay for is waste heat, which is why switching things off between services matters.

Gas, electric or both

Most restaurants have a dual fuel arrangement, but you can buy the two fuels from different suppliers. Gas is cheaper per kWh than electricity, which is why kitchens have traditionally cooked with it. Government figures put the Q2 2026 non-domestic average at 24.51p/kWh for electricity and 5.28p/kWh for gas including the Climate Change Levy, so a kWh of electricity costs several times a kWh of gas. See is business gas cheaper than electricity for the detail.

That gap does not automatically make gas cheaper to cook with, because electric induction and modern electric ovens waste less heat. The Sustainable Restaurant Association published a guide in March 2026 with modelling for three UK kitchens: it estimated annual savings of 17% for a gastropub, 21% for a Chinese takeaway and 8% for an Indian restaurant from electrifying equipment. Those are modelled projections, not guarantees, and they depend on what you currently run, so treat them as a reason to get your own numbers rather than a promise.

Worked example: a 40-cover café

These are illustrative rates, not quotes. Electricity: 30,000 kWh at 26p/kWh with a 90p/day standing charge. Gas: 40,000 kWh at 8.8p/kWh with a 45p/day standing charge. Both fuels pay the main Climate Change Levy rate of 0.801p/kWh from 1 April 2026, and VAT at 20%.

Line	Electricity	Gas
Energy used × unit rate	30,000 × £0.26 = £7,800.00	40,000 × £0.088 = £3,520.00
Standing charge (365 days)	365 × £0.90 = £328.50	365 × £0.45 = £164.25
Climate Change Levy	30,000 × £0.00801 = £240.30	40,000 × £0.00801 = £320.40
Subtotal	£8,368.80	£4,004.65
VAT at 20%	£1,673.76	£800.93
Total	£10,042.56	£4,805.58

The café's yearly energy cost comes to £14,848.14. Cut the electricity unit rate by 1p and you save 30,000 × £0.01 = £300 plus VAT of £60, so £360. Cut gas use by 10% (4,000 kWh) and you save 4,000 × (£0.088 + £0.00801) = £384.04 plus VAT of £76.81. Use our cost calculator to run your own numbers.

Takeaways, bakeries and food trucks

Takeaways tend to have intense, short peaks (fryers and woks at full blast on Friday night) and long quiet gaps. If you have a half-hourly meter, you pay for the actual pattern and capacity charges may apply, so it pays to avoid switching everything on at once. Bakeries run ovens and proofers overnight, which means lots of out-of-hours usage; check whether a day/night tariff would suit you. Food trucks and market stalls often use bottled gas and generators or a hook-up. Bottled LPG is bought from a gas distributor rather than through a mains gas supply contract, so the rules on this page about mains supply contracts do not apply to it; a fixed-site base kitchen will have its own supply.

Contract points that catch restaurants out

• Seasonal or closed periods. Standing charges apply every day, whether you are open or not. See standing charges when closed.
• Taking over a site. If you move into a previous restaurant and do nothing, you land on a deemed rate. Sort a contract before you start. Read moving premises and deemed contracts.
• Renewals. Check your end date so you do not roll over unintentionally (see business energy renewals).
• Size. Most independent restaurants are microbusinesses, giving extra protections such as clear Principal Terms.

Practical ways to bring the bill down

• Switch off cooking equipment between services rather than leaving it on idle.
• Defrost freezers regularly, keep door seals intact and coils clean; an iced-up freezer works harder.
• Keep the canopy and filters clean, and run extraction only while cooking.
• Read the meter daily for a fortnight to find your overnight base load. If it is high, something is running that should not be.
• Tell staff the numbers: the Everards guide notes that staff awareness and energy-management training can cut catering energy use by up to 30%, though the actual effect will vary.

Overnight consumption is the quickest test. If your electricity use at 3am is more than your fridges and freezers explain, you are paying for something you do not need.

Do you pay reduced VAT or skip the levy?

Almost certainly not. A commercial kitchen is business use, so the standard 20% VAT rate and the Climate Change Levy apply. The exceptions are small: if a very small café uses no more than 33 kWh of electricity a day on average (about 1,000 kWh a month) or 145 kWh of gas a day, the de minimis rules may apply, but a kitchen with fryers, ovens and a dishwasher will usually be well above that. If you live above the premises on the same meter, the 60% rule may affect part of the VAT; see which VAT rate applies to my business energy. Our VAT and CCL calculator shows both effects.

Next steps

1. Pull your last 12 months of bills and total the kWh and cost for each fuel.
2. Check your contract end date and whether it rolls over.
3. Compare quotes on a like-for-like basis, including standing charges and pass-through charges.
4. Walk the kitchen with the checklist above, and consider a business energy audit before any big equipment spend.