Small business energy comparison

Getting to grips with your gas and electricity contracts is a great way to improve your bottom line

Fast-growing, energy-hungry businesses consume a lot of fuel – and if you don’t keep track, those gas and electricity costs can really stack up.

Business energy prices can vary wildly from supplier to supplier, and no two firms’ energy usage is going to be the same. Factors like size, location, business type, sector, and even credit rating will influence which supplier you choose, and how much you’ll pay for your energy.

Savvy business owners will constantly shop around for a better deal. Don’t fall into the trap of paying more than you need to because of inaction – get comparing, find yourself a better deal, and change suppliers today.

Below, we’ll compare five business energy suppliers, looking at:

  • What’s covered by your gas and electricity providers
  • What you should be looking for with your business energy tariffs
  • What you need as a small business
  • What you should expect from a business energy quote

In this article, we cover:


Small business energy comparison at a glance

Before we get into the nitty-gritty details of each supplier, here’s a version of what’s to follow:

Energy company:
Best for:
Star rating:
EDF Energy Business freedom ★★★
British Gas Trusted service ★★★★
Bulb Green energy ★★★★★
YüEnergy Attentive customer service ★★★
E.ON Scaling your energy use as your business grows ★★★★


edf

EDF Energy

One of the UK’s leading energy suppliers, EDF claims to be the largest producer of low-carbon electricity and the biggest supplier of electricity by volume in the UK.

The company offers a range of competitive fixed contract rates for business, as well as a flexible, short-term electricity contracts for new businesses or those moving into new premises.

For customers that don’t want to commit to a fixed term contract, EDF’s Freedom for Business tariff gives you the option to move onto a different tariff at any time, with variable pricing, no fixed end date, and no notice to leave.

Your businesses is considered an SME by EDF if you spend less than £30,000 per year on energy. The cost below is calculated on this basis.

👍 Positives:
  1. EDF works with your business to find the best plan for you, offering flexibility and time to decide where needed
  2. Ideal for start-ups and businesses looking to move premises
  3. No end-of-contract fees
👎 Negatives:
  1. You can only pay via direct debit on a monthly basis
💥 Best for: Business freedom and flexibility
Cost: Out-of-contract electricity from:
18.06p /kwh + 35.00p /day standing charge

Out-of-contract gas from:
5.90 p/kwh + 35.00 p/day standing charge


British gas

British Gas

The UK’s largest supplier of energy, British Gas for Business claims to supply gas and electricity to more customers than any other business energy supplier.

The company offers both gas and electricity in one package or separately, and has a range of fixed term and variable price plans.

👍 Positives:
  1. Designed for small and medium-sized businesses
  2. Lock-in tariffs that last for up to 3 years
  3. You can manage your account online
  4. Discounts for switching multiple locations
  5. A popular, well known business with a reputable history
👎 Negatives:
  1. More expensive than other suppliers
    Grants you less contract flexibility
  2. Aimed at small businesses that are settled, rather than just starting up
💥 Best for: Trusted service, stable business
Cost: Out of contract electricity from:
21.25 p/kwh and 56.26 p/day standing charge.

Out of contract gas from:
6.56 p/kwh and 98.23 p/day standing charge.


bulb

Bulb

One of the newest kids on the block, Bulb is a 100% renewable electricity and 10% renewable gas supplier that claims to offer prices around 20% lower than the Big Six (British Gas, EDF Energy, E.ON UK, npower, Scottish Power, and SSE). All of Bulb’s electricity comes from independent renewable generators across the UK.

Bulb is a great option for businesses that are looking to reduce their carbon footprint and improve their image as a climate-conscious company. For more information on how to develop a greener company ethos, take a look at our pages on green and social business.

👍 Positives:
  1. You can get £50 for switching to Bulb
  2. No contract needed
  3. No end-of-contract fees
  4. Provides 100% renewable electricity
  5. Keep things simple with tariff transparency
  6. Great for small businesses
👎 Negatives:
  1. Bulb doesn’t currently serve sole traders. but expects to be able to in the near future.
  2. More geared-up for low volume energy use – larger, older and more established businesses with higher rates of energy consumption will probably find cheaper deals elsewhere
💥 Best for: Green energy, cost efficiency and transparency
Cost: Electricity prices:
from 12.05 p/kwh (+ VAT)

Gas prices:
From 3.08 p/kwh (+ VAT)


yu energy

Yü Energy

Founded in Nottingham in 2014, Yü Energy is an energy supplier focused on providing gas and electricity to small and medium-sized businesses.

Yü Energy offers fixed, market-based prices, and gives each customer their own personal account manager in a bid to provide a more customer-centric experience than its larger rivals.

👍 Positives:
  1. Great customer service
  2. Yü Energy really values each business as individuals
  3. No end-of-contract fees
  4. Fixed electricity price for the duration of your contract (up to 3 years)
  5. Fixed prices for service and delivery
  6. Renewable Obligation, Feed-in Tariff scheme, and Electricity Market Reform prices are fixed (unless they go up by more than 40% during your contract)
👎 Negatives:
  1. Yü Energy is more targeted towards small businesses, rather than high-volume energy consumers
💥 Best for: Customer service
Cost: Electricity prices:
Electricity prices:
Deemed rates from 23.03 p/kwh + 159.00 p/day standing charge

Gas prices:
Deemed rates from 6.96 p/kwh + 76.34 p/day standing charge


e.on

E.ON UK

Formally known as Powergen, E.ON UK is one of the big six energy suppliers. It caters to all businesses, no matter the size, and has a range of electricity and gas tariffs to suit a variety of business needs. E.ON UK also gives small businesses a boost in the right direction with online account management, as well as its new connections scheme.

E.ON UK also has your back for when you decide to scale-up. For larger businesses, E.ON UK provides risk management strategies, making energy purchase on a massive scale much less daunting.

The energy industry can be a complicated place, and E.ON understands that. This is why it makes buying your business’ energy as easy and transparent as possible.

👍 Positives:
  1. Very supportive towards businesses of all sizes
  2. Clearly communicated information about the industry
  3. You can choose to fix the price you pay for the wholesale cost of your electricity or gas for up to five years
  4. Flexible approach that allows you to take market conditions into consideration, giving you time to consider your options
  5. Now provides Renewable Energy Guarantees of Origin (REGO) backed supply
👎 Negatives:
  1. Vast company that places a lower value on customer service than others
💥 Best for: Scaling your energy use as your business grows
Cost: Electricity prices:
Electricity prices:
Out-of-contract rates from 12.40 p/kwh + 80.00 p/day standing charge

Gas prices:
Out-of-contract rates from 6.37 p/kwh + 35.00 p/day standing charge.


Electricity for businesses

From providing light to powering the hardware or equipment your company needs to operate on a daily basis, businesses tend to use a lot of electricity.

This means businesses can afford to negotiate a better deal on their electricity contract, but risk being hit with higher wholesale prices.

Electricity costs for business

The table below provides an idea of how much you’ll expect to pay for electricity, depending on the size of your business.

Business type Average annual usage Average electricity price (per kWh) Standing charge (daily) Average annual price
Micro business 5,000 – 15,000 kWh 13p – 13.5p 26p – 30p £650 – £1,800
Small business 15,000 – 30,000 kWh 11.8p – 13p 24p – 26p £1,900 – £2,900
Medium business 30,000 – 50,000 kWh 11.3p – 11.8p 21p – 23p £3,300 – £5,000

For a more comprehensive account of what you can expect from your electricity provider, why not take a look at the Startups page on business electricity comparison?


Gas for businesses

Whether it’s for hot water, heating your premises, or fuelling kitchen equipment, gas is an essential fuel for the daily running of your business.

Unlike domestic customers, businesses are able to access gas at a lower per kWh price because they generally use more of it; however, they will usually pay a higher rate of VAT.

Gas costs for business

The table below provides an idea of how much you’ll expect to pay for gas, depending on the size of your business.

Business type Average annual usage Average gas price (per kWh) Standing charge (daily) Average annual price
Micro business 5,000 – 15,000 kWh 4,1p – 4.5p 23p – 26p £300 – £700
Small business 15,000 – 30,000 kWh 3.8p – 4p 21p – 22p £800 – £1,400
Medium business 30,000 – 50,000 kWh 3.5p – 3.7p 18p – 20p £1,500 – £2,000+

Has your gas bill got you in a grumble? Looking for the best deal for your business? Then have a read of our page on business gas comparison.


The top ten UK sectors that spend the most on energy energy bills:

For businesses looking to save costs, you could fall into a high-energy category if you’re in one of the below sectors:

  1. Private offices
  2. Chemical manufacturing
  3. Hospitality
  4. Food products manufacturing
  5. Hospitals
  6. Non-metallic mineral manufacturing
  7. Basic metals manufacturing
  8. Rubber and plastic manufacturing
  9. Small shops
  10. Paper products manufacturing

So, if you want your next business venture to be as low-energy as possible, try to avoid the above stated industries.

It’s also notable that in the manufacturing and industrial sector, gas is the most commonly used energy source. Gas is less expensive than electricity; however, since gas is a fossil fuel, it is nowhere near as sustainable. This is because it is possible to generate substantial amounts of electricity via renewable means.

The below chart demonstrates the percentage of energy that will come from each source if your business is part of the manufacturing or industrial sector:

business energy

On the other hand, businesses in the service sector use energy very differently. See the below infographic for details:

business energy consumption


FAQs

Is my business a high energy consumer, or a low energy consumer?

A business is regarded as having low energy consumption if its average electricity consumption of is:

less than 33 kWh per day
or
1,000 kWh per month.

Generally, businesses will be subjected to a 20% rate of VAT on their energy bill, though this can be reduced if they meet the supplier’s requirements for low energy consumption.
You could pay by unit pricing, which is based on the size and consumption of your company, or a fixed business gas price plan, which sees you pay a set price for a fixed period of between one and three years.

Unlike domestic energy costs, business energy prices are driven by the market, meaning they can vary wildly even from day to day. Using an expert comparison service is the best way to ensure you get a good deal on your business energy.

What is it reasonable to expect from a small business energy provider?

If you’re wondering what the normal expectations you can have for your small business energy provider, then you’re not alone here. The energy industry is quite a complex place, and knowing what you can reasonably demand from your supplier can seem a little daunting.

Here are four key things you should expect your small business energy company to offer:

  1. Affordability
  2. Your energy needs to be affordable – otherwise you’ll be running your business in the dark, for fear of racking up a massive bill.

  3. Environmental sustainability
  4. There’s no denying it: cleaner and greener energy sources are the future. Your energy company should be showing at least some signs that they’re living up to their responsibility and doing their bit.

  5. Scalability
  6. Small businesses don’t stay small forever, and it’s important that your energy company can keep up with your rate of growth. Check that your energy company also caters for bigger businesses with higher energy requirements, whilst keeping costs reasonable.

  7. Flexibility
  8. When it comes to business energy, the market is highly variable, and there is scope to make some serious savings if you’re savvy enough. This is why you don’t want to be locked into a contract, and ideally will have an arrangement that doesn’t feature any end-of-contract fees.


The need-to-knows about business energy quotes

Make sure you’re informed about the most important elements included in a business energy contract, so you can understand whether the deal you’re getting is a good one. Here’s what you should be looking out for:

  • Unit rates –
    This is the set amount your business will pay per unit (kWh) of energy that it uses
  • Standing charge –
    This is a fixed daily cost that covers the expense of repairing and maintaining a business’ energy facilities
  • Agreed supply capacity –
    The maximum demand that a business may require from its supplier, ensuring that this amount (and no more) is continuously available
  • Maximum demand (MD) –
    Measured in kWh, this is the highest value of energy a business could use in a half-hour period. This is taken from the highest demand recorded during a calendar month or billing period, which is multiplied by two to give an hourly MD. Penalties can be incurred for exceeding this value
  • Cooling off period –
    A period of time after signing a contract in which you can cancel without afinancial penalty (rarely offered to business customers)
  • The billing period –
    The period of time that a bill will cover, which can be negotiated for more favorable terms with your supplier
  • The renewal window –
    Coming at the end of your contract, this is a 60 or 120-day window, giving you time to find a better deal or stick with your current supplier
  • In order to get the best energy quote for your company, you should:

    • Do your research – you need to understand energy contracts if you want to get the best deal!
    • Read reviews – see how other consumers have rated potential suppliers. There are plenty of credible online sources where you can compare
    • Know your current numbers and consumption pattern – work out when your peak energy consumption times are, and find out your Meter Point Reference Number (MPRN) for gas and your Metering Point Administration Number (MPAN) for electricity
    • Shop around for quotes – don’t just go with the first attractive offer – keep shopping around for a better one, and make sure you get the best deal for your business

    Once you’ve agreed to a business energy contract, you’ll be locked in for the stated time, so make sure it’s definitely the right one for you before committing.


    Next steps:

    Now you’re fully clued up on what you can expect from your small business supplier, as well as the rough financial implications of your energy bill, it’s time to get some quotes from suppliers. To do this, simply fill in the form at the top of the page.