Business electricity rates in the UK: what shapes your price per kWh
A business electricity rate is the price you pay for your electricity: a unit rate (pence per kWh) plus a daily standing charge. It isn't your total bill or a quote. Your overall cost is those rates applied to how much you use, plus any extra costs. Your rates depend on your site, your usage, your contract and when you use energy.
Ask three businesses what they pay for electricity and you'll get three different answers. And at least one will say 'it depends'. (They're right. Annoyingly.)
Part of the confusion is that people use 'rate', 'price', 'cost' and 'quote' to mean different things. So let's pin them down. In this guide:
A rate is a price per unit: your unit rate (pence per kWh) and your standing charge (pence per day)
Your overall cost is what you actually pay: those rates applied to your usage, plus any extra costs, VAT and Climate Change Levy
A quote is a supplier's whole offer to you: your rates, plus the contract length, tariff type and terms
The short answer
Business electricity rates have two parts: a unit rate and a standing charge
Your rates depend on where your business is, how much you use, your contract and when you use energy
Quotes from different suppliers differ because the rates and the terms around them differ. So compare the annual cost, not one headline number
You can only see your own rates by getting a quote. With Octopus, it takes seconds (there's a postcode box further down)
How are business electricity rates worked out?
Your rates have two parts:
Unit rate: the price you pay for each kWh of electricity you use, in pence
Standing charge: a fixed daily amount, whatever you use. Our business energy prices explained page breaks down how it fits into your bill
On top of that, VAT and Climate Change Levy may apply to your bill. For the full picture of what goes into your bill, see our business energy prices explained.
Neither part is a single fixed number. Lots of things shape them. The table below shows what those things are and how each one moves your price.
| What shapes your rate | How it affects your price |
|---|---|
| Where your business is | Some network costs vary by region, so the same usage can cost different amounts in different places. |
| How much you use | Your annual usage (in kWh) is a key input to your quote. Bigger and smaller sites are priced differently. |
| Your meter type | The kind of meter at your site can affect the tariffs available. |
| Contract length | Locking in for longer can mean more certainty. Shorter contracts mean you can shop around sooner. |
| Fixed or variable | Fixed rates stay the same for the whole term. Variable rates can change at any time. |
| When you use energy | On time-of-use tariffs like Shape Shifters, energy is cheaper outside the 4-7pm peak. If you can shift usage, you can cut your costs. |
| Government charges | Some charges are set by government and passed through supplier bills. How a supplier handles them can change the rate you see. |
Fixed vs variable: what's the difference?
A fixed contract locks your rates for the whole term. With Octopus, your fixed price is just that: fixed. We don't change it during your contract, and we don't sneak on extra fees.
A variable contract means your rates can move. And if your contract ends and you don't choose a new one, you could land on a 'deemed' rate. Ours are the same as our standard variable rates. We think suppliers shouldn't penalise customers who don't consciously choose them.
Want to weigh up the pros and cons? Our guide on fixed or flexible has you covered.
Why do business electricity quotes differ between suppliers?
A quick reminder of the difference. A quote is a supplier's whole offer: the rates, the contract length and any extra costs. The rates are the prices inside it. So two quotes can differ because the rates differ, because the terms around them differ, or both. Here are the main reasons:
Different rates: unsustainable pricing. Some suppliers offer rates that aren't realistic or sustainable. Sometimes it's new suppliers looking for quick growth. Other times it's established suppliers trying to 'tease and squeeze'.
Different terms: costs left out of the quote. Some suppliers don't include certain charges in new quotes, then add them to contracts customers have already signed. That makes a quote look cheaper than it ends up.
Different rates: who's in the middle. Brokers and comparison sites tend to charge suppliers for finding them customers. Suppliers can roll that cost into your rates.
Different terms: contract type and length. A shorter or variable contract can look cheaper or dearer than a longer fixed one for reasons that have nothing to do with the rate itself
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How do I find out what my business electricity rate would be?
Your rate is personal to your site and usage. So the only way to see it properly is to get a quote. With Octopus it takes seconds: enter your postcode, pick your address and we show you your rates for a range of tariffs. Start at our homepage.
Get your first quote:
How do I know if a rate is a good one?
For each quote, you should have a unit rate, standing charge and annual cost. They fit together like this:
(Unit rate x annual kWh usage) + (Standing charge x 365) = Annual cost in pence
If there's anything in the 'Additional costs' row, add that on top.
That annual cost figure is the best one to compare between quotes. But take note of the unit rate and standing charge too; they can vary a lot.
Quick note: you may also pay VAT and Climate Change Levy on your energy usage. Check whether each supplier includes this in the cost they give you.
Want the full walkthrough, with a free scorecard? Read our guide: How to compare business energy quotes.
Here's how we keep your business' prices fair
We follow 6 pricing principles, from selling directly to never adding hidden fees to your bill.
Business energy prices, explained
A deeper look at what goes into your business energy bill.
Your business energy questions, answered
A rate is a price per unit: your unit rate (pence per kWh) and your standing charge (pence per day). A quote is a supplier's whole offer: your rates, plus contract length, tariff type and terms. Your overall cost is those rates applied to your usage, plus any extras, VAT and Climate Change Levy.
It depends on your site, usage and contract. The best way to judge is to compare the annual cost of each quote, not just the unit rate. Our comparison guide shows how.
Business and home energy are priced and billed differently, and different taxes can apply.
Our help article explains how to know if your business qualifies for reduced VAT and CCL.
A deemed rate is what you can be charged if your contract ends and you carry on using energy without choosing a new one. Our deemed rates are the same as our standard variable rates.
On a fixed contract with Octopus, no. We don't change your rate during the term, and we don't add extra fees. On a variable contract, yes.
We only sell directly, with no brokers or comparison sites, so all customers get our best deals. Your own rate still depends on your site, usage and contract.
Curious what your business rate would be?
Get your instant quote from Octopus Energy for Business. Fair, transparent pricing with no brokers and no hidden fees.
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We measured the duration of a big sample of online user journeys from 1/6/26 to 16/7/26
The timer started when a user reached the quote page, before putting in any details
The timer stopped when they reached the success page, meaning the sign-up was complete
We calculated that 20% of SMEs did the whole process within 10 minutes
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Pete McNally
Content Manager at Octopus Energy For Business