Business gas prices

How to get the best business gas prices for your small business and what to look for in a contract, explained here

Business gas is approached differently to domestic gas both in terms of price and supply. This is why, as a small business owner, it’s a good idea to wrap your head around business gas prices so you’re as in-the-know as can be to avoid being grossly overcharged.

Did you know that 40% of UK businesses have never switched energy providers? You might be surprised by the savings you’re missing out on. Read on for a comprehensive breakdown of business gas prices, or, simply fill in the form at the top of the page to receive tailored business electricity quotes.

It’s important to keep in mind that business gas prices are variable. This spectrum of price depends on a number of factors, including location, size of business and the wholesale market price; more detail on this to follow.


What’s on this page?

  • How are business gas prices calculated?
  • Rates and tariffs
  • Cheap business gas
  • Business gas taxes and levies

  • How are business gas prices calculated?

    Your gas bill depends on the following factors:

    • Business size
    • Business type
    • Business location
    • Tariff type
    • Weather and temperature
    • How the gas is stored
    • Amount of gas used
    • The wholesale price

    Your business gas bill will comprise of:

    • The unit rate –
      This is the amount paid per unit (measured in kWh) of gas used by your business
    • The standing charge –
      This is a daily fee that goes towards national grid maintenance

    It’s difficult to provide an exact figure in terms of what you’ll be paying for your business gas. but an overview of gas charges will give you a rough idea of what to expect: on average small businesses spend approximately £5,100 on electricity and £4,100 on gas per year.

    The below table details the gas prices from the top energy providers. The figures are
    based on the assumption that the energy consumer is a small non-daily meter user on a deemed contract. The listed prices are based on London rates with the assumed gas consumption of below 73,200kWh per year.

    Note: much lower rates will be found when getting a quote for a fixed term contract. To use our helpful quote finder, simply fill in the form at the top of the page.

    Supplier Standing charge (pence per day) Price per kWh
    British Gas 96.07p 6.41p
    EDF Energy 80.00p 5.90p
    E.ON 99.00p 4.90p
    Npower 123.30p 5.322p
    Scottish Power 30.00p 6.50p
    SSE 80.00p 5.00p
    Extra Energy 99.00p 5.50p
    Yü Energy 76.34p 11.3p – 11.8p
    Bulb 27.40p 3.25p

    Small business gas rates and tariffs

    When it comes to business energy, the term tariff gets bandied around quite a lot, so you might be wondering what exactly tariff means.

    Your tariff refers to how your bill is classified, and therefore calculated, by your energy company. There are two types of tariff:

    Fixed rate – the price you pay will be set for the duration of your contract
    Flexible – the charges will change with the market

    Your tariff is based on how much energy you use, and your energy use is measured by a meter. This information is sent sent to your energy provider, who calculates your bill accordingly.

    When it comes to small business gas prices, the wholesale price can have either a very large or negligible impact on your business energy costs, depending on your contract type. If you have a fixed-rate contract then the wholesale price probably won’t affect your bills, however, if you have a flexible-rate contract then your bill will change according to the ebbs and flows of the wholesale market.

    But, what is the wholesale market?

    Wholesale basically means the bulk buying, or selling, of energy ie: gas or electricity. In the UK, wholesale energy prices are determined between the energy producers and the energy retailers, and these rates change daily. So the wholesale market simply refers to the buying and selling of energy, but in massive quantities.


    Cheap business gas

    Due to the variable nature of business gas prices, different providers offer more affordable tariffs for different businesses. Just as no two businesses are the same, no two gas bills are the same either.

    So, whilst we can’t point you straight to the cheapest provider, we are able to give you some handy hints and tips on how to find the lowest price for your business gas.

    Firstly, it’s good to have a general idea of how much gas you’re likely to be using annually. This will help in getting the most accurate quote for the lowest price. Also, as a general rule of thumb, fixed rather than variable tariffs are usually cheaper. And, it’s a good idea to know your contract types:

    1. Rollover Contracts

      This means that at the end of your fixed term contract, you might automatically be rolled over into a more expensive deemed-rate contract that’s not only expensive to pay, but also comes with a high exit fee. In order to get the best tariff it’s important that you keep a close eye on when your contract is due for renewal.

    2. Bundled Plans

      if you’re looking for both gas and electricity, it can be cheaper to buy a complete energy bundle from one supplier. Some UK energy companies will offer lower business gas prices if you also take out a commercial electricity contract with them.

    Here are five things you should note down and have to hand when chasing a cheap commercial gas quote:

    1. Your MPRN (Meter Point Reference Number)
    2. Your annual gas usage (if you know it)
    3. When you’re most likely to be using gas (time of day, days in the week etc)
    4. Your business’ electricity usage (if you fancy a bundled plan)
    5. The date your current contract expires (if you have one)

    Having the above information handy during your quote-hunting will make it much easier to gain the most accurate quote possible from suppliers.

    Once you’ve got all of the information you need, you can start shopping around for suppliers. Keep these things in mind when you do so:

    • Commercial gas prices depend on the market rate
    • Gas prices are calculated differently for business and domestic customers – you might need to shift out of your domestic-gas mindset and focus-in with your business brain
    • VAT on gas is usually applied at a higher rate for businesses, but it’s worth looking into whether or not your business might be eligible for a tax break
    • Providers often offer discounts for direct debit payments
    • Find out if it’s possible to supply multiple sites with the same provider (if applicable)
    • If you’re on the hunt for a business electricity provider too, consider looking for a bundle

    To save on the legwork, why not let Startups bear the brunt of the task? All you have to do is fill in our online form at the top of the page and you’ll receive tailored quotes from business gas suppliers.


    Taxes

    It probably goes without saying that the more gas your business uses, the more expensive your bill will be. However, there are also certain costs that some businesses will encounter and other businesses can avoid.

    The Climate Change Levy (CCL)

    The CCL is a tax on energy usage that encourages businesses to reduce emissions and act in a more environmentally friendly way. This can affect your business’ gas bill and is determined by a factors such as the scope, type and purpose of your business. For more information regarding the climate change levy, take a look at this page.

    You may be exempt, or have reduced rates on certain taxes, if:
    You use a lot of gas because of the type of business you are
    Your business is so small that it doesn’t use a lot of gas

    VAT
    Businesses tend to be charged VAT at 20%. If you’re company is defined as a small or micro-businesses (based on gas usage) or you run a charity or a not-for-profit organisation, you may be eligible to receive VAT at 15%, so check with your supplier.

    According to Ofgem, your business is classed as a micro-business if it uses 293,000 kWh of gas or less annually. You can find out more about micro business gas consumption here.


    Next steps

    Now we’ve touched upon the basics of business gas prices, it’s time to take a look at some of our supplier reviews.

    For more information about gas suppliers – or, more generally, business energy in all its forms – be sure to head to the Startups section on business energy. Here you’ll find reviews, comparisons, and a wealth of information.

    Or, if you feel well-armed with all the information you need, why not fill in the form at the top of the page to get the ball rolling and receive tailored quotes and compare business gas prices with providers able to cater to your needs?

    Get Business Energy Quotes Today!

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