Small business gas suppliers and prices

The energy crisis in the UK has been disastrous for SMEs. Any thoughts that the problem might abate have been thwarted by the unfolding crisis in the Middle East, combined with the Russia-Ukraine war. Brent crude oil climbed by $2.25 a barrel to $86.83 in early October. 

As colder winter temperatures approach, there are few options left for business owners, who aren’t protected by the Ofgem energy price cap. No government help has been announced since January, although there are hopes that November's Autumn statement will bring news of further support measures.

All is not lost, however. Even as your usage rises, there is still time for entrepreneurs to secure the best energy deal possible – which is where our free cost comparison tool comes in.

By using our no obligation tool, you can compare personalised bespoke quotes directly from energy suppliers before making an informed decision based on important factors like cost, support, and contract length. In light of the current situation, supplier stability is another point of comparison.

Whether you’re ready to switch immediately, or move at a later date for tactical cost-saving, this article will provide you with key information about the cheapest, most secure gas suppliers currently available.

What to look for when comparing business gas suppliers

There are five key areas to consider when deciding which business gas supplier to use including associated fees, taxes, and product offering.

1. Charges

There are two charges that will make up the majority of your business gas bill: the unit cost, and the standing charge.

• The unit cost is measured in kWh (kilowatt hours). This is what you’ll pay for the actual resources you use. This is usually a fixed rate, although bills can vary depending on how much energy you use.
• The standing charge covers the cost of getting your gas to your door. As both gas and electricity are brought to UK businesses via the National Grid, the standing charge is essentially a maintenance and service fee that must be paid on top of the unit cost. It will vary from supplier to supplier. 

2. Rate types

Fixed rate: this will fix the price per unit of your gas, meaning your bill will not be affected by any price hikes in the market – although your bill will still vary depending on your energy usage. They are usually available on a one, two, or three-year contract basis. As a general rule of thumb, the longer the contract, the higher the tariff.

Variable rate: associated with fluctuations in the wholesale market, this means that the cost per unit of energy used does not remain at a stable rate throughout your contract. This means that even if your energy use remains exactly the same, the price you pay can still vary month-on-month.

Deemed rate/out-of-contract tariff: a rolling deal that puts you on an out-of-contract tariff. This basically means you’ll be paying more than you should be for energy – you won’t be protected by the stability that a contract affords you, and your rates will still very much be determined by fluctuations in the wholesale market and the amount of energy you use.

Rollover: usually a last resort for the period between one contract ending and another beginning, these rates are usually very high. Be sure to know when your contract is due to end and agree a new deal before it does, to avoid paying over the odds for your basic energy needs.

3. VAT

The standard rate of VAT for gas is 20%. Your business could be eligible for a 5% VAT reduction on your bill if it:

• Uses less than 4,397 kWh of gas energy per month (you can find this out on your latest bill)
• Spends a minimum of 60% of energy for residential uses

To claim this discount, you just need to ask for a VAT declaration form from your gas supplier.

4. Green energy credentials

More and more companies are searching for ways to reduce their carbon footprint by investing in renewable energy. As sustainability is one of the top business trends in 2023, doing so can be a great selling point for customers, as well as helping to save on overhead costs.

Search for providers that offer renewable energy, like our top-rated brand Octopus Energy. As an added bonus, it's also one of the most affordable gas suppliers for SMEs.

5. Customer service

Customer service is vitally important when it comes to your energy provider. Do your research, take a look at the ratings from trusted survey providers like YouGov, and see if the company you want to go with is known for excellent and quick customer support.

Business gas suppliers and prices: at a glance

*Prices are based on a one-year fixed contract for an SME based in London using 10,000kWh per year. Prices will vary.

British Gas: best gas supplier for security

According to a 2022 YouGov survey, British Gas has a positive rating from 34% of customers, marking it just below Octopus Energy for customer satisfaction. However, this supplier also has the highest industry recognition score (98%) by a long mile, signalling its strong credibility in the industry.

That's particularly important for small businesses today, who will want to avoid being forced to move to another supplier should their current provider collapse. It's also why we voted it the best gas supplier for security.

In terms of pricing, British Gas is fairly middle of the road. Its standing charge per day is noticeably higher than competitors like EDF Energy, but the reliability of this supplier also means you can expect fewer power outages.

Businesses that use over 150,000kWh of electricity per year also qualify for the renewable energy plan by British Gas, a 100% renewable electricity product for business customers that has been independently certified by the Carbon Trust.

E.ON: best gas supplier for transparency

The YouGov survey shows that E.ON is just slightly less well-known than British Gas, with 96% of respondents saying they have heard of the brand. That said, only 27% of customers said that they were satisfied overall (48% were ambivalent).

E.ON is low-cost overall. It quoted us 29.11p as a daily standing charge, which is almost 10p cheaper than British Gas. You'll have to bundle in electricity for this price, however, as there are no gas-only contracts available.

We like E.ON for its new, specialist small business product, E.ON Next. E.ON Next has no exit fees and can be managed entirely online through the E.ON portal, making it the most transparent options available for gas fees.

SMEs that spend less than £35,000 on energy, or use less than 293,000 kwh of gas per year, will also automatically qualify for the E.ON Next tariff, a 100% renewable energy product.

Octopus Energy: best gas supplier for renewable energy

Octopus Energy has the highest popularity rating in the YouGov survey with 35% of customers saying they like the brand, versus just 12% who dislike it.

Last September, Octopus Energy announced it would cut its standing charge on standard variable tariffs by 4% to help poorer customers navigate the crisis. However, both EDF and E.ON Next remain cheaper for standing charges – although Octopus does boasts the second-cheapest unit rate at 7.82p.

Octopus is also the only supplier that offers 100% renewable plans for every tariff, so you don't have to have specific energy usage targets to qualify. That makes it our top supplier for renewable products.

EDF Energy: best gas supplier for discounts and rewards

Similar to British Gas and Octopus, EDF Energy is familiar to 91% of respondents, on average. 1 in 4 customers also strongly like the brand, while a similar proportion dislike it. Like E.ON, EDF is also very transparent, with a useful online portal available for customers to submit meter readings and book smart meter installations.

EDF quoted us the most affordable gas rates of all four suppliers, asking for a standing charge of just 25p per day for a one year fixed contract. However, if you pay by Direct Debit, EDF offers an additional 7% discount, which is why the unit rate is lower than the cash/cheque unit rates.

EDF is also a leader on renewable energy and currently operates 31 wind farms in the UK. While its plans are not all ethically-sourced (unlike Octopus) there are four sustainable products to choose from if your business wants to go greener.

How to find the lowest business gas prices

Due to the variable nature of business gas prices, different providers offer more affordable tariffs for different businesses. 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. As a general rule of thumb, fixed rather than variable tariffs are usually cheaper. It’s also a good idea to know your rate type when seeking a quote.

Note that some UK energy companies will offer lower business gas prices if you also take out a commercial electricity contract. However, businesses are generally not offered dual fuel combined energy tariffs, like those provided for domestic customers.

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 of the week, etc.)
4. Your business’ electricity usage (if you’re looking to get multiple energy contracts with the same provider)
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.

To save on legwork, why not let Startups do the work of finding a gas supplier? All you have to do is fill in our simple cost comparison form at the top of the page, and you’ll receive tailored quotes from business gas suppliers.

How to save money on your business gas

It 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 be able to mitigate against this year.

All non-domestic customers will qualify for an automatic discount through the government's Energy Bill Relief scheme until April 2024. You may also qualify for further support if:

• You use a lot of gas because of your business type e.g. supermarkets, farming
• Your business is so small that it doesn’t use a lot of gas

Some other key points to consider that could help to cut your business gas bills include:

• Be flexible with your payment method – if you can pay by direct debit, you may receive a discount
• Know your contract terms – avoid charges and exit fees by knowing exactly when your contract ends
• Conduct an energy audit – specialists may suggest changes that could positively affect your bills

Energy-efficient tech: what can my business use?

Many small businesses have also turned to energy-efficiency assessment tools as a way to measure and improve their energy usage. Five easy-to-implement solutions are:

1. Smart meters to identify areas of wastage
2. Radiator boosters to maximise heat around work areas
3. Thermal strips to reduce draughts
4. Timers and sensors to turn off heaters
5. Adding automatic doors to block cold airflow

For other money-saving tips and tricks, read our expert guide on how to budget for rising fuel and electricity costs.

How to switch business gas supplier

For more information on this topic, you can visit our full guide on why and how to switch energy providers to save your business money. But here are some of the bigger points to consider.

There are a number of reasons why your business might want to switch gas providers, such as to save money on your bill, find a more sustainably produced supply, or because you’re moving premises to a different area. 

When switching suppliers, remember that your new supplier is responsible for arranging the switch. All the key information you need to give them in order to switch commercial gas suppliers can be found on your bill, like:

• The name of your current supplier
• How much gas your business uses
• The meter number

When the time comes to end a contract and you have completed your final meter reading, you’ll simply need to pay any remaining fees to clear your account. If there is still credit in the account, you can organise for it to be paid to your business.

Switching gas suppliers: a step-by-step guide

1. Find your gas bill
2. Review quotes from a range of suppliers
3. Choose the tariff that best matches your business’ needs
4. Work out if any additional costs apply (e.g. exit fees)
5. Pick a new contract
6. Let your existing supplier know that you plan to switch (if relevant)
7. Pay up any outstanding charges with your existing provider
8. Wait for your new supply to start with your chosen provider

Note that if you’re ending a fixed tariff prior to the set end date, then you may need to pay exit fees. Be sure to assess what you will gain or save by paying these ahead of switching. 

You’ll also need to ensure that you switch during the renewal period, which is when the existing contract (if applicable) allows you to change providers. 

How do suppliers calculate the cost of business gas?

We've discussed the current state of the oil market and its impact on gas prices. But the overall cost of your business gas bill at the end of the year is influenced more than just supplier pricing. Other factors that can drastically alter the price per kWh unit are:

• Business location (rural areas tend to pay more as there are fewer suppliers)
• Business size (some suppliers, like E.ON, offer special small business products)
• Business sector (manufacturers will have a higher gas bill than dropshippers)
• Type of tariff (default tariffs are the most common, also known as the ‘standard variable tariff')
• Strength of the pound (the UK imports around 50% of its gas from Europe)
• Supply and demand (heatwaves and low wind power can push prices up)

Next steps: Compare business gas suppliers

We’ve provided key information on the average prices currently offered by major UK gas suppliers, as well as details on how to choose a supplier and find cheap rates.

Alongside, we've told you how to switch suppliers so that, when the timing is right to move to a new contract, you'll have everything you need to get started.

If you're out of the renewal window and ready to switch providers straight away, or if you just want to know more for future reference, complete our online webform to be matched with the most suitable quotes for your business gas needs. It's 100% free and takes just one minute.