Why doesn't the household price cap apply to businesses?

The household price cap is a limit on what suppliers can charge domestic customers who are on default tariffs. Ofgem describes it as applying only to those households. Businesses are not covered, which is why business prices vary so widely.

What the cap actually limits

The Ofgem cap sets a ceiling on the unit rate and standing charge for domestic customers on standard variable or default tariffs. It does not touch fixed deals, and it does not apply to any non-domestic contract. A shop, café or office is a business customer even if it sits in a house or is run by one person.

Why businesses were left out

The cap was created for domestic customers only, and we have not found an official statement setting out every reason businesses were excluded. The differences below help explain why a single business cap would be hard to design:

• No single default product. Business supply ranges from a one-room office to a factory, and prices depend on usage, site, meter type and contract length.
• Competition and negotiation. Businesses are expected to shop around, and larger users can negotiate directly.
• Different risks. Suppliers price credit risk, closure risk and usage swings into business deals.

Whether the market should be capped is a political choice. The point for you is that, as things stand, the price you pay is whatever you agree, or the supplier's default rate if you agree nothing. For the full picture, see our main page on the business energy price cap.

The protections businesses do have

Ofgem's rules for microbusinesses include:

• Key contract details in a Principal Terms summary, including any broker cost.
• No termination fee when you are out of contract, and no notice requirement for a microbusiness apart from evergreen contracts (up to 30 days).
• Rollover contracts limited to 12 months.
• Access to the Energy Ombudsman for micro and small businesses.

There is also no cooling-off period once you agree a business contract, so protection comes from reading terms, not from changing your mind afterwards. Our guide to Ofgem rules for business energy lists more.

What this means in pounds: a worked example

DESNZ's Quarterly Energy Prices for April to June 2026 put the average non-domestic electricity price at 24.51p/kWh, including the Climate Change Levy. At 10,000 kWh, that is 10,000 × £0.2451 = £2,451 before standing charges and VAT. A business that drifts onto a deemed rate may pay far more per kWh, as our deemed rate comparison shows. No cap stops that happening.

What you can do instead

1. Know your contract end date and diary the renewal window.
2. Get quotes before your fixed deal ends, not after.
3. Avoid sliding onto default rates.
4. Compare the total cost, not only the unit rate. See comparing business energy.

Next steps

Check whether any support exists for your sector in government help with business energy bills. There is no general business support scheme in 2026, as the Energy Bills Discount Scheme ended on 31 March 2024.