Best Commercial Energy Rates UK 2026: 100,000 kWh Threshold Guide

LAST REVIEWED 2026-09-06

What does 'best' mean for commercial energy rates in 2026?

The best commercial energy rate in 2026 is the lowest unit price available for a specific business profile, including consumption, location, and contract length. There is no single 'best' rate; it varies by supplier and market conditions.

For commercial landlords, the definition of 'best' also includes contract flexibility, customer service, and whether the supplier offers renewable energy options. A rate that is low per kWh but comes with poor service may not be the best overall.

To compare effectively, landlords should obtain quotes from multiple suppliers or use a broker. However, broker commission can affect the final unit rate, so it is important to ask for a breakdown of any fees. The 100,000 kWh threshold is critical: below this, a business is a microbusiness and has additional protections, such as access to the Energy Ombudsman.

When evaluating quotes, check the standing charge and unit rate separately. Also consider whether the contract is fixed or flexible, and what happens at renewal. The best rate is one that meets all the business's needs, not just the lowest price.

How does the 100,000 kWh threshold affect commercial landlords?

The 100,000 kWh threshold determines if a business is a microbusiness for electricity. For commercial landlords, this applies to each property or contract, not the total portfolio. If a property uses less than 100,000 kWh per year, it qualifies for microbusiness protections.

Microbusinesses have rights such as access to the Energy Ombudsman for complaints and protection from certain contract terms. Landlords with multiple properties must assess each one separately. A property using 100,000 kWh or more is not a microbusiness and has fewer protections.

This threshold also affects how suppliers can treat the contract. For example, microbusinesses may have more straightforward renewal processes. Landlords should check their annual consumption on bills to confirm their status.

If a property is close to the threshold, consider energy efficiency measures to reduce consumption, which could bring it below 100,000 kWh and unlock additional protections. However, this is a descriptive point, not a recommendation.

What is the direct-from-supplier route for commercial energy?

The direct-from-supplier route involves contacting energy suppliers directly to obtain quotes, without using a broker. This can be done via phone or online. It allows landlords to negotiate directly and potentially avoid broker commission.

In practice, direct quotes may not always be the cheapest, as brokers have access to a wider market. However, some suppliers offer exclusive rates for direct customers. Landlords should compare direct quotes with broker quotes to see which is lower.

When contacting suppliers, have recent consumption data ready, including annual kWh usage and peak demand. This helps suppliers provide accurate quotes. Also, be clear about the property type and contract start date.

Direct suppliers may offer different contract lengths, from 1 to 5 years. Landlords should consider their future plans; a longer contract may lock in a rate but reduce flexibility. The best approach is to obtain multiple quotes and compare them on a like-for-like basis.

What is the LOA trap in commercial energy contracts?

The LOA (Letter of Authority) trap occurs when a business signs a Letter of Authority with a broker, giving the broker permission to act on its behalf. This can lead to automatic contract renewals or hidden commissions.

When a landlord signs an LOA, the broker may have the authority to enter into contracts without further approval. This can result in the landlord being locked into a contract with a supplier that is not the best rate. The LOA may also allow the broker to receive commission from the supplier, which is often built into the unit rate.

To avoid this trap, landlords should read the LOA carefully and understand its terms. They should ensure that any contract signed is explicitly approved by them. It is also wise to set a reminder for contract renewal dates to avoid auto-renewal.

If a landlord has already signed an LOA, they can revoke it in writing. However, this may not affect existing contracts. The key is to be vigilant and not sign anything without full understanding.

How does broker commission end up in the unit rate?

Broker commission is often included in the unit rate quoted to the business. Suppliers pay brokers a commission for bringing in customers, and this cost is passed on to the customer through a higher pence per kWh.

For example, a supplier might offer a rate of 20p per kWh to a direct customer, but a broker might quote 22p per kWh, with the extra 2p going to the broker. This means the business pays more than necessary.

To identify commission, ask the broker for a breakdown of their fees. Some brokers are transparent, while others are not. Landlords can also compare direct quotes to see if broker quotes are higher.

It is important to note that not all brokers add commission to the unit rate; some charge a separate fee. However, the most common practice is to embed it. Therefore, always ask for the 'all-inclusive' rate and compare it with direct offers.

What are the Ofgem TPI disclosure rules and what do they not do?

Ofgem's Third-Party Intermediary (TPI) disclosure rules require brokers to clearly disclose their commission and any fees to the customer before a contract is signed. This aims to increase transparency.

However, these rules do not cap the amount of commission a broker can earn, nor do they require brokers to prove they have compared the whole market. They also do not apply to all intermediaries, such as some energy consultants.

For landlords, this means they may still receive quotes with hidden commissions, despite the rules. It is essential to ask for a written disclosure of all fees and commissions. If a broker fails to provide this, it may be a breach of rules.

The rules also do not require brokers to act in the customer's best interest; they only need to disclose. Therefore, landlords should be proactive in comparing quotes and not rely solely on broker advice.

What changes above the microbusiness threshold?

Above the microbusiness threshold, which is 100,000 kWh for electricity, businesses lose certain protections. They are not eligible for the Energy Ombudsman and may face different contract terms.

For commercial landlords with properties above this threshold, the contract is considered a non-domestic contract without microbusiness safeguards. This means suppliers may include terms that are less favourable, such as automatic rollover clauses or higher termination fees.

Additionally, the supplier is not required to provide the same level of information or notice periods. Landlords must be more diligent in managing contracts and renewals.

It is also worth noting that the microbusiness test includes other criteria, such as fewer than 10 employees and turnover under 2 million euros. A property might be above the kWh threshold but still qualify if it meets other conditions. Landlords should check all criteria.

What does a named UK example look like in 2026?

A named UK example in 2026 could be a commercial landlord with a property using 100,000 kWh of electricity per year. This property would be at the threshold, meaning it is not a microbusiness for electricity.

For such a property, the landlord would need to compare rates from suppliers. In 2026, the market may have rates around 20p per kWh, but this is an example, not a specific figure. The actual rate depends on location and market conditions.

The landlord might use a broker to find a deal, but must ensure any commission is disclosed. Alternatively, they could contact suppliers directly. The best rate would be the lowest unit price for the required contract length.

It is important to note that the 100,000 kWh figure is a threshold, not a saving or discount. It simply determines the regulatory status. Landlords should not assume that being at this level gives them any financial benefit.

How can commercial landlords compare energy quotes effectively?

To compare energy quotes effectively, commercial landlords should gather all relevant consumption data, including annual kWh and peak demand. They should also know the property's postcode and contract start date.

Next, obtain quotes from at least three suppliers or brokers. When comparing, look at the unit rate (pence per kWh) and the standing charge (pence per day). Also, check the contract length and any exit fees.

Landlords should ask for a full breakdown of any broker commission or fees. They can also use comparison websites, but these may not cover all suppliers. Direct supplier quotes can be a benchmark.

Finally, consider the supplier's customer service and financial stability. A slightly higher rate from a reliable supplier may be better than a lower rate from a company with poor service. The best rate is one that balances cost and quality.

What should commercial landlords check in their energy contract?

Commercial landlords should check several key elements in their energy contract. First, the unit rate and standing charge, and whether they are fixed or variable. Second, the contract length and renewal terms, including any auto-rollover clauses.

Third, any termination fees or penalties for early exit. Fourth, the notice period required to change suppliers. Fifth, whether the contract includes any additional services, such as maintenance or green energy.

Landlords should also verify that the contract is in the correct legal entity name and that the address is accurate. They should check the start and end dates, and whether there is a cooling-off period.

Finally, they should ensure that any verbal agreements are documented in writing. If there are any discrepancies, they should contact the supplier immediately. Being thorough can prevent costly mistakes.

Glossary: the terms on an energy bill explained

Microbusiness: A business with fewer than 10 employees and turnover under 2 million euros, or using under 100,000 kWh electricity or 293,000 kWh gas per year.

Letter of Authority (LOA): A document that gives a broker permission to act on a business's behalf in energy negotiations, potentially leading to auto-renewals or hidden commissions.

Third-Party Intermediary (TPI): A broker or consultant that arranges energy contracts between businesses and suppliers, often earning commission from the supplier.

Standing charge: A fixed daily fee that covers the cost of connecting to the energy network, regardless of how much energy is used.

Unit rate: The price charged per kilowatt-hour (kWh) of energy consumed, usually expressed in pence.

Energy Ombudsman: An independent body that resolves disputes between energy customers and suppliers, available after 8 weeks or a deadlock letter.

Frequently asked questions

What is the best commercial energy rate for a landlord in 2026?

The best commercial energy rate for a landlord in 2026 depends on the property's consumption, location, and contract terms. There is no single best rate. Landlords should compare quotes from multiple suppliers or brokers, focusing on the unit rate and standing charge. For properties using under 100,000 kWh, microbusiness protections apply, which may influence the rate. Always ask for a breakdown of any broker commission to ensure the quoted rate is competitive.

How does the 100,000 kWh threshold affect the energy contract?

The 100,000 kWh threshold determines if your business is a microbusiness for electricity. If your property uses less than 100,000 kWh per year, you have access to the Energy Ombudsman and other protections. If it uses 100,000 kWh or more, you are not a microbusiness and have fewer safeguards. This can affect contract terms, such as renewal notices and termination fees. Check your annual consumption to know your status.

Can I get a better rate by going direct to suppliers?

Going direct to suppliers can sometimes result in a better rate because you avoid broker commission. However, brokers may have access to exclusive deals not available directly. To find the best rate, obtain quotes from both direct suppliers and brokers, and compare them on a like-for-like basis. Always ask for a full breakdown of any fees or commissions to ensure you are comparing the true cost.

What is a Letter of Authority and why is it a trap?

A Letter of Authority (LOA) gives a broker permission to act on your behalf in energy negotiations. It can be a trap because it may allow the broker to enter into contracts without your explicit approval, leading to auto-renewals or hidden commissions. To avoid this, read the LOA carefully, understand its scope, and set reminders for contract renewal dates. You can revoke an LOA in writing at any time.

How can I see if broker commission is in the unit rate?

Broker commission is often included in the unit rate, making it higher than a direct quote. To see if commission is included, ask the broker for a written breakdown of their fees. Compare their quote with a direct supplier quote for the same contract. If the broker's rate is higher, the difference may be commission. Ofgem's TPI disclosure rules require brokers to disclose commission, but not all do, so be proactive.

What are Ofgem's TPI disclosure rules?

Ofgem's Third-Party Intermediary (TPI) disclosure rules require brokers to clearly disclose any commission or fees they receive from suppliers before a contract is signed. This is to increase transparency. However, the rules do not cap commission amounts or require brokers to prove they have compared the whole market. They also do not apply to all intermediaries. Always ask for written disclosure.