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:
- EDF Energy
- British Gas
- Yü Energy
- E.ON UK
- Business gas
- Business electricity
- The need-to-knows about business energy quotes
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:
|EDF Energy||Business freedom||★★★|
|British Gas||Trusted service||★★★★|
|YüEnergy||Attentive customer service||★★★|
|E.ON||Scaling your energy use as your business grows||★★★★|
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.
|💥 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:
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.
|💥 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:
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.
|💥 Best for:||Green energy, cost efficiency and transparency|
|⛁ Cost:||Electricity prices:
from 12.05 p/kwh (+ VAT)
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.
|💥 Best for:||Customer service|
|⛁ Cost:||Electricity prices:
Deemed rates from 23.03 p/kwh + 159.00 p/day standing charge
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.
|💥 Best for:||Scaling your energy use as your business grows|
|⛁ Cost:||Electricity prices:
Out-of-contract rates from 12.40 p/kwh + 80.00 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:
- Private offices
- Chemical manufacturing
- Food products manufacturing
- Non-metallic mineral manufacturing
- Basic metals manufacturing
- Rubber and plastic manufacturing
- Small shops
- 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:
On the other hand, businesses in the service sector use energy very differently. See the below infographic for details:
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
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:
- Environmental sustainability
Your energy needs to be affordable – otherwise you’ll be running your business in the dark, for fear of racking up a massive bill.
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.
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.
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:
This is the set amount your business will pay per unit (kWh) of energy that it uses
This is a fixed daily cost that covers the expense of repairing and maintaining a business’ energy facilities
The maximum demand that a business may require from its supplier, ensuring that this amount (and no more) is continuously available
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
A period of time after signing a contract in which you can cancel without afinancial penalty (rarely offered to business customers)
The period of time that a bill will cover, which can be negotiated for more favorable terms with your supplier
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.
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.