What is a unit rate?

The unit rate is the price you pay for each kilowatt-hour (kWh) of energy you use, whether gas or electricity. If your unit rate is 20.67p per kWh, you pay 20.67p for every kWh of electricity you consume.

How have unit rates and standing charges changed in 2026?

Both sides of the bill have gone up this year, for different reasons. Unit rates carry the wholesale cost, and year-ahead wholesale electricity was £143.14/MWh on 2 November against £67.46/MWh before the Middle East conflict began in late February. Our indicative small business electricity rate is now 29.0p a kWh, so the restaurant in the worked example below would pay about £4.06 for its hour at full power, not £2.89.

Standing charges carry most of the network costs, and those rose in April 2026. Drax put the average rise in transmission residual charges at 64%, and what each site pays depends on its charging band. You may have read that standing charges are being scrapped. The Budget only asked Ofgem to remove them from household gas bills by the end of 2027, and nothing has been announced for business. Our business electricity rates page shows current prices by business size.

A worked example

Imagine a restaurant running:

  • A 7 kW electric boiler.
  • A 5 kW large commercial fridge or freezer.
  • A 2 kW induction hob.

Together, that's 14 kW of equipment. Run everything flat out for one hour and you use 14 kWh of electricity.

At a unit rate of 20.67p per kWh, the cost of that hour is:

20.67p x 14 kWh = 289.38p

Energy is priced in pence per kWh, so divide by 100 to convert to pounds: 289.38 / 100 = £2.89 per hour to run all of that equipment at full power.

In reality, equipment cycles on and off rather than running at maximum constantly, so real consumption is lower, but the arithmetic works the same way whatever the load. If your business uses a considerable amount of energy, securing the lowest unit rate matters most.

Purely Energy checks the national database to see your annual consumption over the last 12 months and advises what's best for your business.

What is a standing charge?

A standing charge is a fixed amount charged daily to cover the cost of delivering gas and electricity to your business, usually priced in pence per day. Large commercial meters may be charged in pounds per day. The standing charge stays the same however much energy you use, or even if you use none at all.

That last point matters for empty properties: if you have a vacant premises, a lower standing charge, or one of the zero standing charge options we offer, can save real money while the site sits unused. You can read more about the best tariffs for a vacant property here.

Unit rate vs standing charge: which matters more?

It depends on your consumption.

A high-usage business should prioritise the unit rate, since that's where the money goes.

A low-usage or vacant site should weigh the standing charge more heavily, because it's the part of the bill that doesn't shrink when usage does.

Beware of quotes that look cheap on one number while quietly loading the other; always compare the total annual cost for your actual consumption, not the headline rate.

What determines energy standing charges?

  • Location – Depending on where in the UK you are based, your standing charge energy prices will vary. This is dependent on the infrastructure that delivers power to your area.
  • Maintenance – Each energy supplier has costs for maintaining the energy supplier networks, pipes, and wires.
  • Government Payments– Suppliers contribute towards government goals to reduce CO2 emissions.
  • Meter readings – Each supplier ensures all customer meter readings are taken. This also costs the supplier more, which makes up some of your standing charge fees.
  • Size of Energy Meter and Supply – If you have a large half hourly supply with a lot of capacity you pay pay anywhere from £5 - £200 /Day in standing charges, you will be able to have this meter downgraded to reduce your standing charge if required.
  • Current Energy Market Condition – The cost of standing charges can change depending on the current state of the market.
  • The type of energy used– Standing charges for gas and electricity can vary. This is because of the difference in network maintenance between gas and electricity.
  • The amount of energy used – A larger business will use more energy than a smaller business. Therefore, these larger businesses will demand more services required to supply their energy, leading to a higher standing charge.
  • Your business's energy deal – Each supplier's contracts and prices differ. Depending on your supplier and contract, this will affect your standing charge prices.

Find out when is best to renew here.

Annual Energy Cost Comparison for UK Businesses (2024)

This information was correct as of 1 October 2024. Wholesale prices have risen sharply since February 2026, so treat it as a historical guide and see our business electricity page for current rates. Business electricity rates are based on a two-year contract. Please be aware that business electricity quotes may be impacted by meter type and business location.

How can Purely Energy help?

Whether your priority is the lowest unit rate for a busy site or the lowest standing charge for a quiet one, we compare both sides of the price across more than 30 suppliers and show you the true annual cost, not just the headline number.

Contact us on 0161 521 3400 or email info@purelyenergy.co.uk, or get an online quote from 18 suppliers.

Please also see our page on, Business Electricity or Business Gas for a more updated reviews.