- Business electricity unit rates as of 2026 typically sit in the range of around 24p to 32p per kWh, with smaller businesses usually paying the higher end.
- Standing charges for commercial supplies commonly run from about 25p to over 90p per day, varying by region, meter type and supplier.
- Sites with maximum demand at or above 100kW are generally required to move onto half-hourly (HH) metering and settlement under Elexon's arrangements.
- The Climate Change Levy (CCL) main rate for electricity is set by HMRC at 0.775p per kWh for the 2024 to 2025 period, added to most business consumption.
- Distribution Use of System (DUoS) charges, set by regional network operators and approved by Ofgem, are embedded in unit rates and vary by location and time of day.
Business electricity rates depend on size, consumption, region and meter type. Micro firms pay more per unit than large sites. Half-hourly metering, DUoS charges and the Climate Change Levy all shape the final bill.
Last reviewed: June 2026
How business electricity rates are built up
Unlike a domestic tariff, a business electricity rate is not a single number set by a price cap. There is no Ofgem energy price cap for non-domestic supplies, so commercial rates are negotiated contract by contract and reflect wholesale prices at the moment a deal is agreed. The headline figure most businesses focus on is the unit rate, measured in pence per kilowatt hour (p/kWh), but that figure already contains several layered costs.
Every commercial unit rate bundles together the wholesale cost of the electricity itself, the supplier's operating margin, network charges for using the transmission and distribution grids, policy costs that fund renewable and social schemes, and an allowance for losses on the network. On top of the unit rate sits a fixed daily standing charge that covers the cost of keeping your meter connected and maintained, regardless of how much you actually use. The Climate Change Levy is then applied as a separate environmental tax on most of the energy consumed.
Because all of these components move independently, two businesses on the same street can pay noticeably different rates. Contract length, payment method, credit profile, consumption volume and the half-hourly shape of your usage all feed into the price a supplier is willing to offer.
Typical unit rates by business size
Business size, defined largely by annual consumption, is the single biggest driver of the unit rate you are quoted. Larger users buy in greater volume and present a more predictable load, so suppliers can offer keener per-unit pricing. Smaller users carry proportionally higher fixed administrative costs and so tend to pay more per kWh.
The figures below describe typical ranges as of 2026. They are indicative only: actual quotes depend on your region, your meter type, the date you sign and prevailing wholesale conditions. They should not be read as a guaranteed price.
| Business size | Typical annual usage | Typical unit rate | Typical standing charge |
|---|---|---|---|
| Micro business | Up to 15,000 kWh | Around 28p to 32p/kWh | Around 25p to 50p/day |
| Small business | 15,000 to 30,000 kWh | Around 27p to 30p/kWh | Around 30p to 60p/day |
| Medium (SME) | 30,000 to 65,000 kWh | Around 26p to 29p/kWh | Around 40p to 75p/day |
| Large business | 65,000 kWh and above | Around 24p to 27p/kWh | Often bespoke, can exceed 90p/day |
Micro business is a defined Ofgem category. A microbusiness is one that meets at least one of these tests: it uses no more than 100,000 kWh of electricity a year, employs fewer than ten people (or full-time equivalents), or has an annual turnover or balance sheet total no greater than 2 million euros. Microbusinesses receive extra protections under Ofgem rules, including clearer contract information and tighter conduct standards from suppliers and brokers.
Standing charges explained
The standing charge is a fixed daily fee that applies even on days when your premises draws no electricity at all. It funds the physical connection: the cost of maintaining the cables, substations and meter that link your site to the grid, plus a share of network and policy costs that are recovered on a per-day basis rather than per unit.
Standing charges vary considerably by region because each of Great Britain's distribution network areas has different infrastructure costs. They also vary by meter type. A business on a simple single-rate meter will see a lower standing charge than a large site with current transformer metering or half-hourly equipment, which involves more sophisticated kit and more frequent data collection. When comparing quotes, always weigh the standing charge against the unit rate together: a low unit rate paired with a high standing charge can work out more expensive for a low-consumption site.
Half-hourly metering and the 100kW threshold
Larger commercial sites are metered and settled differently from smaller ones. Where a site's maximum demand reaches 100kW or more, it is generally required to be fitted with a half-hourly (HH) meter. These meters record consumption in 48 separate half-hour periods each day and send that data automatically to the supplier and to the central settlement system administered by Elexon under the Balancing and Settlement Code.
Half-hourly settlement lets suppliers see exactly when energy is used, which means pricing can be tailored to the time-of-day cost of supplying you. For a business with a HH meter this brings both opportunity and complexity. You may be able to shift flexible load away from expensive peak periods, but your bill will also include separately itemised charges that a smaller site never sees, such as capacity and availability charges based on the agreed supply capacity you reserve from the network.
Many businesses below 100kW have also moved onto half-hourly meters voluntarily or through the wider rollout of advanced metering. If your demand is approaching the threshold, it is worth planning ahead, because the change affects how you are billed and which contracts are available to you.
Distribution Use of System (DUoS) charges
A large part of every unit rate is made up of network charges, and the biggest of these for most businesses is the Distribution Use of System charge, or DUoS. This is the fee paid to the regional Distribution Network Operator (DNO) for moving electricity across the local network to your premises. DUoS rates are set by each DNO and approved by Ofgem through its price control framework.
For half-hourly sites, DUoS is often charged in time bands, commonly described as red, amber and green periods. The red band covers weekday peak hours, when network use is highest and charges are most expensive; green covers nights and weekends, when charges are lowest. A business that can shift demand out of red-band periods can meaningfully reduce its network costs. For non-half-hourly sites, DUoS is bundled into the unit rate and standing charge rather than itemised, but it is still there.
The Climate Change Levy (CCL)
The Climate Change Levy is an environmental tax administered by HMRC that applies to electricity, gas and other fuels supplied to business and public sector users. It is designed to encourage energy efficiency and lower-carbon consumption. The main rate for electricity is set at 0.775p per kWh for the 2024 to 2025 period, charged on most units a business consumes and shown as a separate line on the bill.
Not every business pays CCL. Supplies to domestic premises and to charities engaged in non-commercial activities are excluded, and very small users below certain de minimis thresholds may not be charged. Energy-intensive businesses in eligible sectors can also enter a Climate Change Agreement (CCA) with the Environment Agency to receive a significant reduction on the main rate in return for meeting energy efficiency or emissions targets. Because CCL is a tax, it is added before VAT, which is normally charged at the standard 20% rate for most businesses (a reduced 5% rate applies only to low-usage or qualifying premises).
Bringing it together: what shapes your bill
When you receive a quote, the unit rate and standing charge are the negotiable headline numbers, but they sit on top of fixed external costs. Wholesale prices set the floor and move daily; network charges including DUoS are set regionally and reviewed by Ofgem; and the Climate Change Levy is a fixed government rate. The levers genuinely within your control are timing your contract well, choosing a contract length suited to your risk appetite, paying by direct debit where that earns a discount, and where you have a half-hourly meter, managing when you use electricity. Reviewing your contract before it ends also matters, because rolling onto an out-of-contract or deemed rate is almost always more expensive than agreeing a fresh fixed deal.
Frequently Asked Questions
What is a typical business electricity rate UK?
As of 2026, business electricity unit rates typically fall in the range of around 24p to 32p per kWh, with smaller businesses generally paying the higher end and larger users the lower end. A standing charge, often between roughly 25p and over 90p per day, is added on top. These figures are indicative and change with wholesale market conditions, region and meter type.
What is half-hourly metering?
Half-hourly metering records your electricity consumption in 48 separate half-hour periods every day and sends that data automatically to your supplier and to the central settlement system run by Elexon. Sites with maximum demand of 100kW or more are generally required to use it. It allows pricing and network charges to reflect exactly when energy is used.
What is climate change levy?
The Climate Change Levy is a tax on electricity, gas and other fuels supplied to businesses, administered by HMRC to encourage energy efficiency. The main electricity rate is 0.775p per kWh for the 2024 to 2025 period and appears as a separate line on most business bills. Charities, very small users and businesses with a Climate Change Agreement may pay a reduced rate or none.
How are business electricity rates calculated?
A business unit rate bundles the wholesale cost of electricity, the supplier's margin, transmission and distribution network charges including DUoS, policy and green levy costs, and an allowance for network losses. A separate daily standing charge covers the connection, and the Climate Change Levy is added to consumption before VAT. Your size, region, meter type and contract date all influence the final figure.
Can I get a fixed rate for business electricity?
Yes. Most business electricity contracts are fixed-rate deals that lock your unit rate and standing charge for the contract term, commonly one to five years. A fixed rate protects against wholesale price rises but means you do not benefit if prices fall. Note that fixing the unit rate does not fix your total bill, because you still pay for the actual units you use.
Do small businesses pay more than large ones?
Generally yes, on a per-unit basis. Larger sites buy more volume and present a more predictable load, so suppliers can offer lower unit rates. Smaller businesses carry proportionally higher fixed servicing costs, so their per-kWh price is usually higher. Microbusinesses, however, benefit from extra Ofgem protections on contract terms and supplier conduct.
