Will business energy prices fall in 2027?

Nobody can say for certain. Wholesale gas and power markets move on weather, global events and demand, and no source we have checked guarantees a fall. What we can do is separate the costs that are already set for 2027 from the ones that are not.

Already known for 2027

• Climate Change Levy goes up. The main rate rises from 0.801p/kWh to 0.827p/kWh on 1 April 2027, for electricity and gas alike. That is a rise of 0.026p/kWh. On 10,000 kWh it is 10,000 × £0.00026 = £2.60, or £3.12 with 20% VAT. It is small, but it is a rise, not a fall.
• Temporary 0% VAT ends. From 1 October 2026 to 30 June 2027 (HMRC first announced 31 March 2027, then Budget 2026 extended it), electricity used for qualifying domestic or charity non-business purposes in Great Britain has 0% VAT. It does not apply to ordinary business use, which stays at 20%. Read zero rate VAT for businesses.
• Smart meter contract terms. DESNZ says new fixed-term non-domestic contracts must include smart or advanced meter terms from 1 September 2027. Details are on our business smart meters page.

Not known

• Wholesale prices. These are the largest piece. Ofgem notes that gas often sets the wholesale electricity price in Great Britain.
• Network charges. Transmission charges (TNUoS) rose by around 60 per cent on average for businesses from April 2026, according to one supplier's analysis of the confirmed tariffs. Whether they rise again is a matter for the regulator and network companies. See TNUoS and DUoS explained.
• Government support. There is no general business support scheme in 2026. Targeted help is for energy-intensive manufacturers, as in industrial competitiveness support.

How to plan without a forecast

If your contract ends in the next year, you are choosing between fixing and staying flexible. A fixed deal gives certainty, while a flexible one follows the market. Our page on fixed vs flexible contracts weighs the options, and the price forecast page covers more of the outlook.

A simple stress test

Budget for your bill at today's price, then see what a 10% rise would do. At 15,000 kWh and 27p/kWh the energy cost is £4,050 (15,000 × 0.27). A 10% rise adds £405. If that would hurt, lock in a price or cut usage. If you are lucky enough to have slack, a flexible deal might suit.

Diary your renewal window for 90 to 120 days before the end date, and start collecting quotes then. Do not wait for the market to fall, because rolling onto a default rate costs more than a modest move in the market.

Be careful with forecasts

Plenty of firms publish forecasts, and many are written by companies that earn money when you sign a contract. Treat any claim of a certain fall as a sales line, and ask what evidence sits behind it.

Next steps

Find your end date, gather your numbers and compare quotes using the cost calculator.