Best small business electricity rates and suppliers for SMEs

Business energy rates are still creeping up, so if you’re looking to keep costs down, we’d recommend doing so with our top-rated small business electricity supplier Octopus Energy, as it has a No Standing Charge tariff. 

In November 2025, Rachel Reeves unveiled the Autumn Budget. Despite entrepreneurs’ hopes, it crucially didn’t address any plans to stop new SME increases such as the Nuclear Levy. Business electricity rates are still expected to increase, and so locking in a fixed rate deal now could shield you against future rises.

The market is volatile for businesses, but with the right research, it’s possible to find a cheap business electricity provider. If you’re in the renewal window (the six months before your contract ends), now is the ideal time to start shopping for quotes from the best small business electricity suppliers or an energy switching service.

Best electricity suppliers for UK small businesses

We compare and contrast the key features and set charges of each provider, so you can find the one with the most competitive rates, reliable supply, and flexible payment structure.

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		Best for	Unit rate (pence per kWh)*	Standing charge (pence per day)*
Octopus Energy	Utilita	EDF Energy
Seasonal businesses	Small retailers and hair salons	Businesses in the service sector
29.73	24.01	27.1
No charge (Octopus No Standing Charge plan)	42.55	75
Compare Quotes	Compare Quotes	Compare Quotes

*Costs were collected by Startups.co.uk in November 2024, and are based on a one-year fixed rate tariff for a business based in North London and using 48,000 kWh of energy per year. All pricing is estimated and subject to your business location and energy usage.

1. Octopus Energy: best for no standing charges

The Octopus business electricity bill will tell companies how much they pay for electricity during off-peak (night) and peak (day) hours.

Octopus is known for its innovative contracts and focus on renewable energy (helping it to win big clients like Caffè Nero). We recommend it to firms with low and varying energy consumption due to its market-leading No Standing Charge (NSC) tariff. 

Customers using more than 3,571 kWH of electricity a year can sign up to an Octopus tariff and then switch to a fixed 12-month NSC contract. To make up for the lack of standing charge, your unit rate might be higher. But the payoff to this extra cost is you’ll know exactly what you’ll pay each month.

Naturally, because you’ll only pay for the electricity used, your energy bill will likely be lower. But the reverse is also true (the more electricity you pay, the higher your bill) so Octopus is unsuitable for manufacturers guzzling thousands of kWHs worth of electricity.

Is Octopus Energy worth the cost?

We recommend Octopus Energy’s NSC tariff, which is worth the price if you’re a:

• Seasonal business with low electricity use off-season, such as an ice-cream shop
• Sole trader with a home office, such as a freelance writer
• Firm with low electricity consumption during peak hours, such as a security provider

Another USP for Octopus is its sustainable focus. Every Octopus tariff boasts 100% renewable electricity, which means it’s a strong offering for eco-conscious companies.

There’s even a special ‘Panel Power’ contract designed specifically for businesses with solar panels. They’ll be given 100% renewable energy and will be paid 15p/kWh for every unit they export back into the grid.

Octopus Energy Pricing

Based on the average fixed rate for a customer in London using 48,000 kWh annually, Octopus quoted us a 29.73p per kWh for unit rate with no standing charges.

• Exit fees? Octopus charges 25% of your remaining contract balance if you exit with less than 49 days notice
• Deposit? Yes. Octopus takes a security deposit from new customers. For every 25% of your contract term, Octopus will return 25% of your deposit
• Late payment fees? Yes. Octopus will charge you £15 for the first missed payment and an additional £20 for each subsequent delay
• Out-of-contract / deemed prices: if your contract expires, you’ll be charged an undisclosed fixed rate

Expert comment: the Startups Editor's advice for SMEs

Energy costs and locked-in high rate contracts have been a business survival issue for several years now, even more so after the recent nuclear levy bombshell dropped. Whilst the government has offered some free expert advice and audits on how to cut both costs and carbon emissions, its scope has been limited to only 600 small and medium-sized hospitality businesses. I’d encourage business owners to look at the immediate, practical and often overlooked ways to reduce energy use in commercial spaces – from smart meter data analysis, to infrared heaters and small-scale staff incentive schemes.

Zohra Huda Editor, Startups.co.uk

2. Utilita: best for small retailers and hair salons

Utilita presents a clear breakdown of your business energy bill including the date your contract ends, and the fee you’ll pay for early termination (exit fee).

Utilita specialises in supplying customers through Pay As You Go (PAYG) smart energy meters. That means, rather than being billed regularly, business owners have flexibility on when to pay to top up their electricity credit online, over the phone, or via a mobile app.

It also means a much bigger emphasis on data insights for managing consumption, as smart meters can track exact electricity usage down to your next tea break. The company’s Smart Energy Monitor software lets you:

• Monitor electricity usage in real-time and identify any spikes or areas for reduction
• View current and past energy bills
• Set daily or weekly energy consumption targets
• Display your energy usage in pounds – helpful for budgeting 
• Receive a ‘Smart Score’ (a measurement of how energy efficient you are)

Is Utilita worth the cost?

Being able to closely monitor energy usage is an advantage for every SME, but it specifically benefits small firms with unavoidable utilities as they commonly need to keep to a strict budget. We recommend Utilita if you’re a:

• Retailer running commercial fridges and air conditioning units
• Hair salons powering hairdryers and mirror lights
• Printer shop with photocopiers and computers to power

Businesses wanting to reduce their carbon footprint will also appreciate Utilita’s data insights – but we should note that Utilita has a poor track record on investing in eco-friendly energy. According to Which?, Utilita does not currently generate any renewable electricity.

Utilita Pricing

Based on a one-year fixed rate tariff for a customer in London using 48,000 kWh, Utilita quoted us 24.01p per kWh unit rate and an expensive standing charge of 42.55p per day (this represents an uplift of 2p from Utilita’s average standing charge in 2023).

• Exit fees? No. Utilita does not charge exit fees on any business energy tariff
• Deposit? No. Utilita does not take an advance payment from new customers
• Late payment fees? Yes. Utilita charges £10 if a payment is more than two weeks late, and £30 if more than 23 days. If your payments are delayed repeatedly, a smart meter may need to be fitted for which there will be a £150 charge. On top of this, there is an £8 charge if your Direct Debit payment fails
• Out-of-contract/deemed prices: if your contract expires and you don’t renew it, you’ll pay a daily £14.40 standing charge and a day rate of at least 27p per kWh until you do

3. EDF Energy: best for businesses in the service sector

EDF’s emphasis on easy customer service is obvious, with numerous support channels listed at the top of every small business bill.

EDF is one of the traditional “Big Six”: the UK’s six biggest energy suppliers, all of which have a reputation as a trusted supplier that provides top-quality customer support and a reliable service provision. 

While many suppliers shut down their help desks, EDF has doubled down on customer service. It invested in Kraken, a customer tool that uses AI to provide basic support 24/7 and ensure power outages are quickly resolved for minimal business disruption.

Is EDF worth the cost?

EDF’s reputation and fast, round the clock support make it worth paying for, especially for businesses that need a completely reliable electricity supply, including:

• Offices looking after sensitive customer data eg. accountants or mortgage brokers
• Time-poor firms that can’t carry out in-depth research into electricity suppliers
• Health or medical clinics with concerns about reliability and meeting regulations
  

EDF Energy pricing

Based on a one-year fixed tariff for a customer in London using 48,000 kWh annually, EDF Energy quoted us a low-cost 27.1p per kWh and a huge standing charge of 75p per day (making it a poor choice for companies with low electricity usage).

• Exit fees? EDF Energy charges a bespoke exit fee on some tariffs if you leave your contract with less than 49 days notice
• Deposit? According to EDF, it may ask for a security deposit at any time (this will be returned in one year, with interest)
• Late payment fees? Yes. If you miss a monthly payment, EDF Energy will charge you a £30 +VAT, regardless of delay time
• Out-of-contract/deemed prices: if your contract expires you’ll pay a daily £2 standing charge and a day rate of at least 37.72p per kWh 

What to look for in a business electricity supplier

With numerous suppliers offering various tariffs and complex pricing, entrepreneurs can struggle to compare plans effectively and understand the true cost of each option.

Various factors influence a supplier’s overall rating, so there isn’t a one-size-fits-all approach to getting the best rate. The below is a good list of what to look for in a chosen electricity supplier:

1. Price

• Direct debit discount: in exchange for guaranteed and on-time payments, many suppliers offer a direct debit discount on the final bill.
• Pay as you go (PAYG) payment: as of April 2024, the price cap for prepayment meters is now lower than direct debit for the first time

2. Customer service

Choose a supplier known for efficient, responsive support channels (such as phone, email, or live web chat) who can help you resolve a problem promptly if it arises. Big Six providers can typically be relied upon to fulfil this requirement.

3. Business needs

• Size – some suppliers offer more flexibility, shorter contract lengths, or zero exit fees for new businesses or microbusinesses. Contacting sales representatives directly to ask about startup discounts can sometimes also lead to money off your bill
• Consumption – time-of-use or TOU tariffs offer discounts for using electricity during off-peak hours. For example, a bakery whose main operations (ovens, mixers) are concentrated in the early mornings with minimal electricity use during the day

4. Green tariffs

Wind and solar are the UK’s greenest, and now cheapest, sources of electricity thanks to the increasing wholesale costs of crude oil. These might even exempt you from the Climate Change Levy (CCL).

Octopus Energy is the best choice for green energy, due to its commitment to moving towards net zero and providing 100% renewable electricity. Its ‘Electric Match’ feature provides time-matching, allowing you to trace back the time and source of your green energy.

Octopus is also currently in the beta stage of its Power Panel solar export tariff. If your business has solar panels, this will allow you sell the energy you produce via them back to the grid. Octopus Energy will give you 12p per kilowatt-hour of electricity you export.

Maximilian Schwerdtfeger, Deputy Editor at The Eco Experts, gives his opinion on green tariffs for businesses: 

Expert opinion: Maximilian Schwerdtfeger on green tariffs

Even if you don’t see huge savings straight away from your green tariff, by choosing one you’re taking steps to future-proof your bills. Clean energy is going to get cheaper in the future as the government is legally bound to its zero-emissions strategy, which will make green tariffs the standard for households and businesses. In her 2025 Budget Chancellor Rachel Reeves announced she was removing certain green levies from electricity bills, a move which should bring down bills and accelerate the uptake of clean technology such as heat pumps.

Maximilian Schwerdtfeger Deputy Editor of Eco Experts and Movehub

5. Add-ons and extras

Even if their upfront costs are high, suppliers with add-ons that save you time and money – such as a mobile app (for easy access to managing and paying your energy bill) – can provide value for money in the long run than a ‘budget’ provider.

6. Business energy meters

Overwhelmingly, there is a shift towards smart meters for tracking business energy consumption, but it’s still important to understand the different types available: 

Traditional manual meters:

Many small businesses will still have an old-school meter that requires a manual reading to be taken from it. These are split into three types:

• Single rate: you’ll be the charged the same amount, regardless of the time of day
• Two rate: this offers an off-peak rate and on-peak rate, and is favoured by businesses that operate during nighttime hours
• Three rate: these offer three separate rates for day, evening, and night (prices are most expensive in the day and cheapest at night)

Half-hourly meters:

These do exactly what they say on the tin: they provide meter readings on a 30-minute basis. These are becoming popular among modern small businesses because they provide highly accurate readings, so you’ll get a more reliable bill, and they don’t require manual readings to be taken (however, they can be more costly than a traditional reader).

To qualify for a half-hourly meter, your business must either:

• Have a maximum demand of at least 70 Kilovolt-amperes during any half-hour period in a day
• Or consume a minimum of 50,000 kilowatt hours of electricity per year

Smart meters:

Smart meters are quickly becoming the most popular type of meter. They come with several benefits – for one, they communicate data directly to your supplier, so there’s no need for manual readings or third parties.

They also give you a much closer look at your energy consumption, automatically displaying your usage on a smart panel, and giving time data on your bill.

Sticking with my current provider vs. switching: which is better value for money?

It can be tempting to stick with your current supplier without exploring potentially better alternatives, but finding a better tariff before your contract expires could save you a bundle.

Renewal offers from suppliers are often not the cheapest option. Most providers save their best offers for new customers, which is why switching energy providers can help businesses to save money – especially as wholesale oil prices threaten to rise.

How to switch your business electricity supplier

Switching small business electricity suppliers can feel complicated, but it’s not overwhelming when you follow the key steps: gather information, compare suppliers, then sign up with your choice.

1. Get all your current information to hand

Firsts things first, find your current contract’s end date. Unlike domestic electricity suppliers, business contracts are typically fixed-term. To avoid exit fees, you should switch during your renewal window (typically six months before your end date).

You’ll also need to have the following information to hand:

• Your annual energy usage
• Your current standing charges and energy costs per unit
• For electricity, your Meter Point Administration Number (MPAN), a 21-digit number found on your bill, as your new supplier will use this to give you an accurate quote (for gas, you’ll also need your Meter Point Reference Number (MPRN)).

2. Gather quotes and compare suppliers

The next step will be to decide which supplier to switch to. This guide should help you out with this part, and you can use our free quote matching tool to receive no-obligation quotes from top suppliers. You could also enlist the help of a business energy broker. When comparing offers, remember to focus on:

• How much you’ll pay per unit of energy
• The daily standing charge
• Any hidden or extra costs
• The length of the contract
• How much notice you’re required to give

Once you’ve chosen your new supplier, make sure you thoroughly check through the contract (always ask for a written version). These aren’t like domestic contracts, and you don’t want to get locked into a legally-binding agreement with longer terms or higher costs than you were expecting.

3. Completing the switchover

Once the ink has dried on the contract with your new supplier, they should take over most of the administrative burden from here. Your new supplier will contact your previous one, and begin the process of handing over your details.

On the day the handover is completed, your new supplier will request you provide them with an opening meter reading (this is to prove your final bill from the old supplier is accurate).

You’ll be switched over to the new supplier within five working days.

What to look for in a business electricity bill

Small businesses pay between £200 and £600 per month for their electricity bill, on average. However, the rate will differ depending on key factors such as:

• Team size
  
• Industry specialisation
  
• Location
  
• Energy contract

Electricity bills can be lengthy and full of legalese. Below, we break down the charges and terms that typically appear on a business electricity bill, so you can determine if you’re getting a competitive deal with a provider:

1. Business tariff

An energy tariff is essentially the type of contract you’ll be on for your business electricity use. There are two main types: fixed rate and variable.

Knowing which tariff you’re on – or want to be on – can save you a lot of money. Here are the key differences between the two:

• What is a fixed tariff? With a fixed tariff, the unit price remains the same for a set period (usually less than five years), regardless of how the market rate changes.
  Is it right for my business? Fixed tariffs are suitable for several types of businesses, but they offer the most benefit to those with consistent operating hours and minimal fluctuations in energy use like offices, corner shops, and hair salons.

• What is a flexible / variable tariff? With this tariff, your unit price fluctuates alongside the energy market. Variable tariffs are usually short-term, so you have greater freedom to switch suppliers when needed.
  Is it right for my business? Variable tariffs are most suitable for companies with seasonal peaks and troughs in energy consumption, like factories that operate more machinery during specific times or leisure facilities with busier weekends.

2. Energy usage charges

Every business electricity bill will contain the following charges relating to energy usage and tax requirements:

• Unit cost – measured in kWh (kilowatt hours), this is the amount paid per unit of electricity used by your business. This is often the most prominent figure on your bill
• Standing charge – a daily fee charged regardless of energy use on that day. Since April 2024, Ofgem has been exploring how to reduce domestic standing charges. However, so far, business charges have been left out of the conversation
• Climate Change Levy (CCL): a tax on electricity bills designed to encourage businesses to reduce their carbon emissions
• VAT (Value Added Tax): a tax applied to most goods and services in the UK, including business energy bills. The current rate is 20%

3. Hidden fees

The below fees tend not to appear on business electricity bills. This lack of transparency makes it difficult for SMEs to accurately budget and avoid unexpected charges.

It’s a smart move to shop around for a supplier that shares upfront information about the following fees. You might even find an electricity firm that doesn’t charge any:

• Installation costs: charges associated with the installation, maintenance, and reading of your electricity meter
• Late payment fees: a charge for those who don’t settle their business electricity bill on time
• Smart meter charges: a fixed daily charge if you have a smart meter installed at your premises

The cheapest electricity supplier for small business

The cheapest electricity supplier for your small business will depend on a range of factors, including your usage and business type. But the best way to find the cheapest tariff is by using our free quote matching tool.

When comparing electricity rates, it’s important to understand the averages you should aim for.

To give you an idea, this is the price of electricity purchased by non-domestic consumers in the UK, including the Climate Change Levy, in 2024.

This is according to the the government’s quarterly and annual gas and electricity prices for the non-domestic sector.

This is separated by consumption band:

• Very small: 32. 60 (pence per kWh)
• Small: 29.79 (pence per kWh)
• Small/medium: 28.88 (pence per kWh)
• Medium: 28.74 (pence per kWh)

What next?

SMEs continue to face significant challenges posed by rising energy costs. While some businesses have managed to adapt, many are still burdened by substantial additional expenses.

Because of market fluctuations caused by the COVID-19 pandemic and the war in Ukraine, 2022 saw the peak of the business energy crisis. The market has finally begin to stabilise, but we’re not out of the woods yet, energy costs continue to be a major pain point for UK businesses.

With no plans announced in the latest Autumn Budget to cut business energy costs, SMEs approaching contract-end must remain vigilant in their search for cost-saving deals. But even without government support, as outlined in our guide, businesses can still take proactive steps to reduce energy costs.