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Average Business Energy Consumption

By knowing what the average business energy consumption level is, you can cut down your spending on business energy bills. Having an average figure to compare to allows you to understand if you’re paying below or over the odds for your own energy use.

Of course, business energy consumption levels depend on several factors. This includes the type of business you have, the size, how many you employ, your location, and so on. However, there’s an average business energy bill level for each business size – from small to large.

In this guide, we’ll explore the average business energy usage levels to help you make better sense of your bills.

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Average Business Gas and Electricity Bills Explained

As we’ve said, average business gas and electricity bills depend on several factors – the size of your business included.

To give you an idea, we’ve compiled this list of the average amount that each business size pays for gas and electricity. However, the following stats are subject to change, given the current volatile state of the energy market.

The “annual usage” will likely remain the same, but the “unit price” and “annual cost” will likely change throughout the year.

Still, here’s a basic overview of the amount each tier of business size can expect to pay for energy bills in 2023:

Micro Business

Electricity

Annual usage: 5,000 to 15,000 kWh

Unit price (per kWH): 44.9p

Daily standing charge: 95.0p

Annual cost: £4,836

Gas

Annual usage: 5,000 to 15,000 kWh

Unit price (per kWH): 18.6p

Daily standing charge: 66.6p

Annual cost: £2,130

Total

In 2023, the average micro business can expect to pay somewhere in the region of £6,966 for their energy bills.

What is a micro business?

A micro business employs between 1 and 9 people.

Being so small, micro businesses tend to use significantly less energy than other businesses. Due to this fact, they tend to get charged higher for kWH units to make up for it.

Small Business

Electricity

Annual usage: 15,000 to 25,000 kWh

Unit price (per kWH): 40.7p

Daily standing charge: 116.5p

Annual cost: £8,565

Gas

Annual usage: 15,000 to 30,000 kWh

Unit price (per kWH): 13.1p

Daily standing charge: 134.2p

Annual cost: £3,436

Total

You can expect to pay £12,001 in total on average for business utilities as a small business.

What is a small business?

Small businesses employ between 10 and 49 people.

Like micro businesses, they are charged higher unit prices than medium and large businesses.

Medium Business

Electricity

Annual usage: 25,000 to 55,000 kWh

Unit price (per kWH): 34.6p

Daily standing charge: 102.5p

Annual cost: £14,214

Gas

Annual usage: 30,000 to 65,000 kWh

Unit price (per kWH): 16.2p

Daily standing charge: 179.6p

Annual cost: £8,350

Total

A medium business can expect to pay around £22,564 for average energy usage.

What is a medium business?

A medium-sized business is any enterprise that employs between 50 and 250 employees.

Large Business

Electricity

Annual usage: 55,000 kWh +

Unit price (per kWH): 36.1p

Daily standing charge: 138.3p

Annual cost: £20,359

Gas

Annual usage: 65,000 kWh +

Unit price (per kWH): 10.2p

Daily standing charge: 278.1p

Annual cost: £7,645

Total

A large business can expect to pay around £28,004 for their business energy.

What is a large business?

A large business employs more than 250 people.

Which Information is Shown on My Energy Bill?

Business utility bills may appear complicated at first glance. However, once you comprehend what each section represents, understanding your energy bill becomes a lot easier.

An average business electricity and gas bill is split into two sections: general information and charges.

General information

  • Bill number – This is your bill reference number. If you need to identify your bill with your supplier, you’ll have to provide your bill number.
  • Bill date – This will either be the day the bill was compiled or the day you received it.
  • VAT number – You’ll have a registered VAT number that’ll be printed on all your energy bills.
  • Account number – This is the unique number that identifies your business account.
  • Billing period – The bill will state the dates that the billing concerns.
  • Contract details – The bill may include details about the business contract type you have with the supplier.
  • Billing type – The billed amount may be an estimate or accurate. This will be stated.
  • MPAN/MPRN – This number identifies your business property’s energy meters.

Charges

  • Billing period charges – The exact amount your business is being charged for the stated billing period.
  • Breakdown of charges – The charges for the billing period will be broken down. I.e., you’ll be shown how much money you owe for electricity consumption, gas consumption, etc. It will also break down your wholesale energy costs, climate change levy, and so on.
  • VAT charges – Additional VAT charges will also be stated.
  • Outstanding charges – If you still owe money from previous bills, these outstanding charges will be stated.
  • Total amount due – A total amount will also be calculated. This will be calculated by adding together your billing period charges, VAT charges, and outstanding charges.
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What Are the Individual Costs on My Business Energy Bill For?

Your gas and electricity charges are self-explanatory, but what about the other individual costs stated on your energy bills?

Wholesale energy cost

Energy suppliers don’t make the energy themselves; they need to buy it from wholesale suppliers. They buy this energy in advance to ensure they don’t run out of it during your contract term. The wholesale energy cost is the amount your business has to pay to help cover the cost of the energy and will be the biggest component of your bill.

Distribution Use of System (DUoS) charge

This covers the cost of the installation and maintenance of local electricity distribution networks. The companies that maintain these distribution networks set the cost of the DUoS charge.

Transmission Use of System (TNUoS) charge

Similar to the DUoS charge, the TNUoS charge goes towards maintaining the national grid. It also helps cover the costs of the transportation and distribution of your electricity and gas.

Climate Change Levy (CCL)

You’ll be charged a high Climate Change Levy bill if you haven’t made any serious attempts at making your business more energy efficient. This charge is designed to make companies move towards more energy efficiency. If you have started making your energy usage habits more energy efficient, then you may be exempt from this bill. For example, using renewable energy may make you exempt.

Metering costs

You’re charged this to cover the cost and maintenance of your gas and electricity meters.

VAT

You’ll also be billed for VAT on the energy you use. Businesses are normally charged 20%, however, this depends on how much energy you actually use. For example, if you use less than 145 kWh of gas, then you may only be charged 5% VAT.

Design Elements

Which Energy Rates Should You Be Paying?

The best way to determine what energy rates you should be paying is to measure how much energy you use. This can be done by looking at the amount of energy you’ve used over a year. You can add together the kWh units stated on your business utility bills over 12 months. Then, fit yourself in one of these brackets:

Micro level

10,000 – 30,000 kWh

Small level

30,000 – 55,000 kWh

Medium level

55,000 – 120,000 kWh

Large level

120,000 kWh +

How Can I Pay My Energy Bill?

There are several ways you can pay for your business utility bills, including:

  • Direct debit
  • Online bank transfer
  • Cheque
  • Via the Post Office
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How to Reduce Your Business Energy Bills

You can reduce your energy prices by making your premises as energy efficient as possible. Try carrying out the following energy efficiency measures to see how much money you save:

  • Carry out an energy audit to determine what’s costing you the most.
  • Consider energy-efficient replacements, such as LED light bulbs.
  • Turn off equipment when not in use to reduce energy usage.
  • Encourage your employees to practice energy-saving measures.

Compare Business Energy Rates with Business Energy Comparison

The price of your business gas and electricity depends on your business size and type. It also depends on exactly how much energy you use.

You can save money by implementing energy-efficient measures in your workplace – you could also try switching your energy supplier, with the help of our brokers and consultants.

Another way to reduce your energy prices would be to switch business energy suppliers. If, after reading this article, you’ve found that you’re paying small business energy prices when you’re only a micro business, it’s time to switch suppliers.

You can rely on Business Energy Comparison to help you find a more appropriate tariff.

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Frequently Asked Questions

Should I fix my business energy til 2024?

If you can find a fixed energy deal that offers you a better price than your current variable energy deal, then you should switch and fix your energy til 2024.

Will business energy prices be capped?

Business energy prices aren’t capped in the same way that residential energy bills are. Instead, the government provides discounts to businesses to help pay for their energy usage.