UK SME guide · Updated May 2026
UK Business Energy Cost Calculator & 2026 Guide
How non-domestic electricity and gas pricing actually works in the UK, plus a free calculator that estimates your true annual spend.
Estimate your annual energy spend →How non-domestic electricity and gas pricing actually works in the UK, plus a free calculator that estimates your true annual spend.
Estimate your annual energy spend →Annual cost = (kWh used × unit rate) + (365 × standing charge) + Climate Change Levy + VAT.
The two levers you control are consumption and unit rate at renewal. Standing charges and CCL are essentially fixed.
Plug your meter reads into the Business Energy Estimator for a cost projection.
Start shopping 4–6 months before contract end. Most UK suppliers will silently roll you onto an "out of contract" rate that can be 60–100% above the market — that's the single most expensive mistake SMEs make on energy.
You pay a unit rate (p/kWh) plus a fixed daily standing charge per meter, both excluding VAT. Most micro and small businesses pay the standard 20% VAT rate on energy.
Unit rates are usually lower, but you commit to a fixed term (1–5 years), can't switch out early, and have a separate Climate Change Levy on top.
Switch off the rolling-out-of-contract rate (the most expensive), get three broker quotes 4–6 months before renewal, and check whether you qualify for reduced VAT (5%) as a small user under 33 kWh/day electricity or 145 kWh/day gas.
As of mid-2026, micro businesses are paying roughly 24–30p/kWh for electricity and 6–8p/kWh for gas on new fixed contracts, plus standing charges of £0.50–£1.20/day.