Business electricity rates 2026: compare 30+ suppliers in one tender

Frequently asked questions

The questions UK businesses ask us most about electricity procurement, pricing and switching, answered by our Warrington procurement team.

What is the average business electricity rate?

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As at August 2026, indicative business electricity unit rates sit in the region of 20 to 23p/kWh, with daily standing charges between roughly 40p and 150p depending on business size and meter type. Wholesale power moves every trading day on Elexon BMRS and the forward curve, so any single point figure goes stale within weeks. The figures here are wholesale-led averages across the Purely Energy supplier panel, refreshed monthly, and are published as a guide only. Your actual rate depends on your MPAN profile class, postcode, annual consumption, DNO region, credit rating and contract length. For a binding quote, run an instant tender from the quick-quote box on our homepage or request a callback from our procurement team, and we will tender your consumption across every supplier on our panel.

How do I compare business electricity suppliers?

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Pull your most recent bill, note your annual kWh consumption, contract end date and the 13 digit Meter Point Administration Number (MPAN, often printed as an S number in the top-left or bottom-right corner of the bill). Give those details to a broker like Purely Energy and we will run a whole-of-market comparison across our panel, which includes Drax, EDF, British Gas, SSE, Total, Crown, Pozitive, Corona, SEFE and Yu Energy. We present every quote with wholesale price, non-commodity costs, supplier margin and our margin shown separately, so you can see exactly what you are paying for.

Do I pay VAT on business electricity?

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Most businesses pay the standard 20% VAT rate on electricity. You can qualify for the reduced 5% rate if you are a registered charity or not-for-profit, or if your premises uses less than 1,000 kWh of electricity per month (roughly 12,000 kWh per year). If you think you qualify, ask your supplier for a VAT declaration form. HMRC publishes the full eligibility rules in VAT Notice 701/19. The Climate Change Levy (CCL) is also charged on business electricity at a rate set by HMRC each April.

What are deemed or out-of-contract electricity rates?

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If your fixed electricity contract ends and you do nothing, your supplier automatically moves you onto deemed or out-of-contract rates. These rates are typically 2 to 3 times the rate you were paying under your fixed deal, and in recent years have commonly sat well above 40p/kWh for many suppliers. Ofgem requires suppliers to publish deemed rates on their websites and on your bill, so always check yours directly. The only way to avoid them is either to sign a new contract or switch supplier before your end date. Purely Energy flags every client renewal at least 12 months ahead of the end date.

Can I switch business electricity supplier mid-contract?

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Generally no. Business electricity contracts are legally binding for the full term you sign for, and exiting early usually triggers termination charges that wipe out any saving. The window to switch is after you receive your renewal notice, typically 6 to 12 months before your contract end date. Micro businesses have protections under the Ofgem Microbusiness Strategic Review, including simpler contract terms and a cooling-off period on telephone sales. Half-hourly (HH) sites can typically switch with 30 days notice once in the renewal window.

How long is a typical business electricity contract?

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Business electricity fixed-price contracts typically run for 1 to 5 years. Shorter terms (1 to 2 years) let you retender more often if wholesale prices fall; longer terms (3 to 5 years) lock in certainty and usually secure a lower unit rate because suppliers price in less near-term risk. Large I&C sites often prefer flex contracts of up to 7 years to give the trading desk room to hedge across multiple forward seasons. See our fixed and flex product pages for more.

Does my meter type affect my electricity rate?

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Yes. The three main profile classes are non-half-hourly (profile classes 1 to 4 and 5 to 8), advanced meter (AMR) and half-hourly (HH). Sites with peak demand above 100 kVA are required by Ofgem rules to have a half-hourly meter, and the half-hourly consumption data lets suppliers price much more accurately. Smart meters (SMETS2) also remove estimated billing. The availability of capacity and settlement data at your site typically makes a 1 to 2p/kWh difference to the quoted rate.

Do smart meters change my business electricity rate?

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A smart meter does not change your unit rate or standing charge directly, but it does remove estimated bills by sending half-hourly or daily reads to your supplier. SMETS2 smart meters work across all suppliers, while older SMETS1 meters can lose smart functionality when you switch, reverting to manual reads until the national DCC upgrade completes. Market-wide Half-Hourly Settlement (MHHS), mandated by Ofgem, is rolling out across all non-HH meters between 2025 and 2027 and will eventually make half-hourly data standard on every supply point.

What happens if I pay an electricity bill late?

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Most business electricity suppliers charge late payment interest from the day after the bill due date, and can issue a disconnection warning after 28 days. Interest rates vary by supplier but typically sit at 8% above Bank of England base rate for statutory late commercial payments. Repeat late payment also damages your credit rating with energy suppliers, which will push up the rate you are quoted at renewal. If you are struggling, contact your supplier early; most will agree a payment plan.

Can I cancel a business electricity contract?

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Once signed, a business electricity contract is legally binding for the full term. Micro businesses have a 14 day cooling-off period on contracts sold over the phone, introduced under the Ofgem Microbusiness Strategic Review. Outside that window, cancellation before the end date almost always triggers termination charges. The right to cancel applies only at the contract end date, during the switching window your supplier is required to confirm in your renewal notice.

Who is the cheapest business electricity supplier?

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There is no single cheapest business electricity supplier. Every supplier prices each site on its own consumption profile, meter type, DNO region, credit rating and contract length, and the supplier that is sharpest for a small retailer this month is often not the sharpest for a manufacturer next month. That is why we tender every quote across the whole panel rather than pointing you at one name: the cheapest supplier for your business is the one that wins your tender on the day, with every margin shown.

Do I need a Letter of Authority to get business electricity quotes?

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A Letter of Authority (LOA) lets Purely Energy ask your current supplier for the information a tender needs: your annual consumption, contract end date, MPAN and current rates. It does not allow anyone to switch you or sign a contract on your behalf; you sign every contract yourself. If you would rather not sign an LOA, send us a recent bill instead, which carries the same details.

Can I put several sites or meters on one business electricity contract?

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Yes. A multi-site or basket contract brings several meters under one agreement, aligns the contract end dates and consolidates billing, which is usually the point at which a portfolio starts to attract better pricing. We tender portfolios as a whole and can also structure flex or pass-through arrangements for larger groups of sites through our I&C desk.

I am moving into new premises. What happens to the electricity supply?

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From the day you take responsibility for the premises you are supplied by the incumbent supplier on deemed rates, which are typically well above a contracted rate. Take an opening meter read, tell the supplier you have moved in, and arrange a contract as soon as you can: because there is no contract in place you are free to switch without termination charges. Send us the MPAN and a first bill and we will tender it.

What happens to my supply on the day I switch business electricity supplier?

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Nothing physical changes. The same cables, meter and distribution network operator serve your premises before and after the switch; only the company billing you changes. Supply is not interrupted and nobody needs to visit, unless you have separately asked for a meter exchange.

Does my credit rating affect the business electricity rates I am offered?

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Yes. Suppliers run a credit check before they price a contract. A strong balance sheet and clean payment history attract lower unit rates and more offers; a weak score, CCJs or a short filing history can mean a higher unit rate, a security deposit or a requirement to pay by monthly direct debit, and some suppliers may decline to quote. If your credit position has changed recently, tell us before we tender so we can approach the suppliers most likely to price competitively.

What is a rollover contract and can I avoid it?

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Some suppliers automatically renew you onto a new fixed term if you do not give notice before the renewal window closes, usually at a rate well above what a tender would achieve. Your renewal notice must state your contract end date and the notice period. Diarise it, tell your supplier in writing that you do not want to renew, and tender early. Purely Energy serves the termination notice for clients and flags every renewal at least 12 months ahead, so the window never closes unnoticed.