| Energy Bills |
In 2026, business energy tariffs vary by type and consumption. The 100,000 kWh figure is the annual electricity threshold for the microbusiness test. Businesses using below this amount receive additional protections. Fixed, variable, and green tariffs are available. Compare prices from suppliers to find suitable deals.
Business energy tariffs in 2026 include fixed, variable, and green options, with the 100,000 kWh threshold determining microbusiness protections.
KEY FACTS
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LAST REVIEWED 2026-09-06
What are the different types of business energy tariffs?
Business energy tariffs in the UK come in three main types: fixed, variable, and green. Fixed tariffs lock in a unit rate for a set period, typically 1 to 3 years, providing budget certainty. Variable tariffs, also known as flexible or default tariffs, have rates that can change with market conditions. Green tariffs source electricity from renewable generation, often at a premium.
The choice between these depends on a business's risk appetite and usage patterns. A fixed tariff suits those wanting predictable costs, while a variable tariff may offer lower initial rates but with potential for increases. Green tariffs appeal to businesses with sustainability goals.
Suppliers may also offer tailored contracts for large users, such as those consuming over 100,000 kWh annually, with bespoke pricing and terms. Understanding these types is the first step in comparing business energy prices.
How do business energy prices compare for offices, restaurants, and shops?
Business energy prices vary by sector due to different usage profiles. Offices typically consume electricity for lighting, computers, and HVAC, with lower gas usage. Restaurants have high electricity and gas demand for cooking and refrigeration, often with peak usage during meal times. Shops may have moderate electricity use for lighting and tills, with gas for heating.
Suppliers price contracts based on estimated annual consumption, load profile, and postcode. A restaurant using 100,000 kWh of electricity per year would be considered a microbusiness under Ofgem's test, which offers additional protections. Shops and offices with similar consumption fall under the same threshold.
To compare prices, businesses should obtain quotes from multiple suppliers, providing accurate consumption data. The actual rates depend on market conditions and supplier tariffs, which can be compared using online tools or brokers.
| Rule | Detail | Source |
|---|---|---|
| Domestic price cap | does not apply to non-domestic contracts | Ofgem |
| Microbusiness test | fewer than 10 employees and under 2 million euros turnover, or under 100,000 kWh electricity or 293,000 kWh gas a year | Ofgem |
| VAT | 20% standard; 5% reduced rate below 33 kWh electricity or 145 kWh gas a day | HMRC |
| Complaints | Energy Ombudsman after 8 weeks or deadlock letter | Energy Ombudsman |
What is the microbusiness test and how does the 100,000 kWh threshold apply?
The microbusiness test, set by Ofgem, defines a microbusiness as having fewer than 10 employees and an annual turnover under 2 million euros, or consuming less than 100,000 kWh of electricity or 293,000 kWh of gas per year. This threshold is crucial because microbusinesses receive additional protections under energy regulations.
In contrast, a large industrial site using over 100,000 kWh is not a microbusiness and has fewer automatic protections.
Businesses should check their consumption against these thresholds to understand their rights. The 100,000 kWh figure is a key benchmark in the non-domestic energy market.
What are the current business energy rates in April 2026?
As of April 2026, specific business energy rates are not published in a single table due to market variability. However, the UK energy price cap for domestic customers was announced at £1,723 for Q4 2026, but this does not apply to non-domestic contracts. Business rates are negotiated individually with suppliers.
Typical consumption values for domestic customers were reset in July 2026 to 2,500 kWh electricity and 9,500 kWh gas, but these are not directly applicable to businesses. For businesses, rates depend on factors such as location, meter type, and consumption volume.
To get an accurate picture, businesses should request quotes from suppliers or use comparison services. The market in 2026 has seen volatility, so fixed tariffs may offer stability.
How do fixed rate business energy tariffs work?
Fixed rate business energy tariffs lock in a unit price for electricity and gas for a set duration, typically 1 to 3 years. This provides budget certainty, protecting against market price increases. However, if market prices fall, the business will not benefit from lower rates until the contract ends.
Early exit fees may apply if the contract is terminated before the end date. Businesses should consider their future energy needs and market forecasts when choosing a fixed term.
For a business consuming 100,000 kWh annually, a fixed tariff can help manage costs, but it is essential to compare offers from multiple suppliers to ensure competitive pricing.
How do variable rate business energy tariffs work?
Variable rate business energy tariffs have unit rates that can fluctuate with wholesale market prices. These tariffs often have no exit fees, offering flexibility. However, bills can increase unexpectedly if market prices rise.
Suppliers may offer variable tariffs as default contracts or as flexible products for larger users. For microbusinesses, variable tariffs must include clear information about price changes, with a 30-day notice period.
Businesses that can tolerate price volatility may prefer variable tariffs, especially if they expect market prices to fall. However, in a rising market, fixed tariffs may be more cost-effective.
| Date | Event | Source |
|---|---|---|
| January 2019 | Default tariff cap introduced | Ofgem |
| October 2022 | Cap moves to quarterly reviews | Ofgem |
| July 2026 | Typical consumption values reset to 2,500 kWh electricity and 9,500 kWh gas | Ofgem |
| 26 August 2026 | Q4 2026 cap announced at £1,723 | Ofgem |
| 1 October 2026 | Q4 cap in force; VAT on domestic electricity cut to 0% until 31 March 2027 | Ofgem |
What are green business energy tariffs?
Green business energy tariffs supply electricity generated from renewable sources, such as wind, solar, or hydro. These tariffs often come with a premium, but some suppliers offer them at competitive rates. Businesses can also purchase green gas, though it is less common.
Choosing a green tariff can help a business meet sustainability targets and reduce its carbon footprint. Suppliers may provide certificates of origin to verify the renewable source.
When comparing green tariffs, businesses should check the percentage of renewable content and any additional costs. Some green tariffs may be more expensive than standard tariffs, but the environmental benefits can outweigh the cost for many businesses.
How to choose the right business energy tariff for your needs?
Choosing the right business energy tariff involves assessing your consumption, budget, and risk tolerance. Start by reviewing your historical energy usage to estimate annual consumption. If your electricity usage is below 100,000 kWh, you qualify as a microbusiness, which gives you additional protections.
Consider whether you prefer a fixed tariff for budget certainty or a variable tariff for flexibility. Green tariffs may align with your corporate values. Obtain quotes from multiple suppliers and compare unit rates, standing charges, and contract terms.
Also, check the contract length and any exit fees. For large users, such as those consuming over 100,000 kWh, bespoke contracts may be available. Use comparison tools or consult a broker to find the best deal.
What are the top business energy suppliers in 2026?
In 2026, the top business energy suppliers in the UK include the 'Big Six' : British Gas, EDF, E.ON, npower, Scottish Power, and SSE : along with challengers like Octopus Energy and Utilita. These suppliers offer a range of tariffs for businesses of all sizes.
Suppliers are rated on customer service, pricing, and green credentials. Ofgem regulates the market, but the domestic price cap does not apply to non-domestic contracts. Businesses should compare offers from multiple suppliers to find the most competitive rates.
For microbusinesses, suppliers must adhere to specific rules, such as providing clear contract summaries. Large users may have dedicated account managers.
How do large and industrial energy prices differ?
Large and industrial energy users, typically consuming over 100,000 kWh of electricity or 293,000 kWh of gas annually, face different pricing structures. These businesses often negotiate bespoke contracts with suppliers, with rates based on half-hourly metering and load profiles.
Prices for large users are often lower per unit due to economies of scale, but they may be subject to capacity charges and other network costs. The microbusiness test does not apply, so fewer automatic protections exist.
Large users may also participate in demand response schemes or purchase energy through brokers. Comparing prices for large users requires detailed consumption data and market expertise.
Glossary: the terms on an energy bill explained
Microbusiness: A business with fewer than 10 employees and under 2 million euros turnover, or using less than 100,000 kWh electricity or 293,000 kWh gas per year.
Fixed tariff: An energy contract where the unit rate is locked for a set period, protecting against price increases but limiting savings if prices fall.
Variable tariff: An energy contract where the unit rate can change with market conditions, offering flexibility but with potential for bill increases.
Green tariff: An energy tariff that sources electricity from renewable generation, often with a premium, to support sustainability.
Price cap: A limit on the maximum price a supplier can charge per unit for domestic customers, but it does not apply to non-domestic contracts.
Standing charge: A fixed daily fee that covers the cost of connecting to the energy network, paid regardless of usage.
Disclaimer. This guide is editorial information drawn from primary sources. It is not financial, legal or tax advice and does not recommend any provider. Figures are those published by the named sources on the review date and may change. Kael Tripton Ltd receives no commission, referral fee or lead payment from any provider named on this page. |
Frequently asked questions
What is the 100,000 kWh threshold in business energy?
The 100,000 kWh threshold is part of Ofgem's microbusiness test. If a business consumes less than 100,000 kWh of electricity per year, it qualifies as a microbusiness, which grants additional protections such as clear contract terms and a 30-day notice for price changes. This threshold is for electricity; for gas, the threshold is 293,000 kWh.
Does the energy price cap apply to business energy tariffs?
No, the energy price cap does not apply to non-domestic contracts. The cap is only for domestic customers. Business energy prices are negotiated directly with suppliers, and rates vary based on consumption, location, and market conditions. Businesses should compare quotes to get the best deal.
What are the typical business energy rates in 2026?
Typical business energy rates are not published as a single figure because they vary widely. However, the domestic price cap for Q4 2026 was announced at £1,723, but this is not applicable to businesses. Rates depend on factors like tariff type, consumption, and supplier. Businesses should obtain quotes for accurate pricing.
How can a restaurant compare energy prices?
A restaurant can compare energy prices by gathering its annual consumption data, then requesting quotes from multiple suppliers. Since restaurants often use significant electricity and gas, they may fall under the microbusiness threshold if electricity is below 100,000 kWh. Using comparison websites or brokers can simplify the process.
What is the difference between fixed and variable business tariffs?
Fixed tariffs lock in a unit rate for a set period, providing budget certainty. Variable tariffs have rates that can change with the market, offering flexibility but with potential for price increases. Fixed tariffs may have exit fees, while variable tariffs often do not.
Are green business energy tariffs more expensive?
Green tariffs can be more expensive due to the premium for renewable energy, but some suppliers offer them at competitive rates. The cost difference varies by supplier and market conditions. Businesses should compare green tariffs against standard ones to assess the cost impact.
