Best small business electricity rates and suppliers for 2024

SMEs can be cautiously optimistic about their energy bills in 2024. Rates have dropped by around 60% since 2022, and there is potential for better deals when contracts are renewed.

That said, the global energy market remains volatile, and the government’s Energy Bills Discount Scheme (EBDS) offering a discount on wholesale prices is set to expire on April 1.

While we’re not out of the woods yet, it is still possible to find a cheap business electricity provider. With research, you can lock your business into an affordable contract with flexible rates to reduce pressure on cash flow. Our top recommended electricity providers are:

If you’re in the renewal window (any time in the six months before your contract ends) then now is the ideal time to start shopping around for quotes from our top providers or an energy switching service.

This article will guide you through the top electricity suppliers for SMEs including their estimated costs, hidden fees, and suitability for specific business industries.

Best electricity suppliers for UK small businesses

We compare and contrast the key features and set charges of each provider, so you can find the one with the most competitive rates, reliable supply, and flexible payment structure.

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Octopus Energy	Utilita	EDF Energy
Best for Seasonal businesses	Best for Small retailers and hair salons	Best for Businesses in the service sector
Unit rate (pence per kWh)* 26.71	Unit rate (pence per kWh)* 23.96	Unit rate (pence per kWh)* 27.1
Standing charge (pence per day)* No charge (Octopus No Standing Charge plan)	Standing charge (pence per day)* 42.55	Standing charge (pence per day)* 75

Compare energy costs for the best deal Compare costs

*Costs were collected by Startups.co.uk in March 2024, and are based on a one-year fixed rate tariff for a business based in North London and using 18,000 kWh of energy per year. All pricing is estimated and subject to your business location and energy usage.

Octopus Energy: best for no standing charges

The Octopus business electricity bill will tell companies how much they pay for electricity during off-peak (night) and peak (day) hours.

Octopus is known for its innovative business contracts and focus on renewable energy. We recommend it to firms with low and varying energy consumption due to its market-leading No Standing Charge (NSC) tariff. 

Customers using under 25,280kWH of electricity per year can sign up to a fixed 12-month contract on the NSC tariff. To make up for the lack of standing charge, your unit rate might be higher. But the payoff to this extra cost is you’ll know exactly what you’ll pay each month.

Naturally, because you’ll only pay for the electricity used, your energy bill will likely be lower. But the reverse is also true (the more electricity you pay, the higher your bill) so Octopus is unsuitable for manufacturers guzzling thousands of kWHs worth of electricity.

Is Octopus right for my business?

We recommend Octopus Energy’s NSC tariff to: 

• Tourist or seasonal businesses with minimal electricity use in the off-season
• Sole traders running a home office with low power requirements
• Firms with low electricity consumption during peak hours, like security providers

Another USP for Octopus is its sustainable focus. Every Octopus tariff boasts 100% renewable electricity, which means it’s a strong offering for eco-conscious companies.

There’s even a special ‘Panel Power BETA’ contract designed specifically for businesses with solar panels. They’ll be given 100% renewable energy and will be paid 15p/kWh for every unit they export back into the grid.

Octopus Energy Pricing

Based on the average fixed rate for a customer in London using 18,000 kWh annually, Octopus quoted us a 26.71p per kWh for unit rate with no standing charges.

• Exit fees? No. Octopus does not charge exit fees on any business energy tariff
• Deposit? Yes. Octopus takes an advance deposit from new customers (usually between one and three month’s estimated energy costs depending on your credit score). Any money taken will be returned to you at the end of your contract
• Late payment fees? Yes.Octopus will charge you £15 for the first missed payment and an additional £20 for each subsequent delay
• Out-of-contract / deemed electricity prices: if your contract with Octopus expires, you’ll be charged around 50p per kWh

Utilita: best for small retailers and hair salons

Utilita presents a clear breakdown of your business energy bill including the date your contract ends, and the fee you’ll pay for early termination (exit fee).

Utilita specialises in supplying customers through Pay As You Go (PAYG) smart energy meters. That means, rather than being billed regularly, business owners have flexibility on when to pay to top up their electricity credit online, over the phone, or via a mobile app.

It also means a much bigger emphasis on data insights for managing consumption, as smart meters can track exact electricity usage down to your next tea break. The company’s Smart Energy Monitor software lets you:

• Monitor electricity usage in real-time and identify any spikes or areas for reduction
• View current and past energy bills
• Set daily or weekly energy consumption targets
• Display your energy usage in pounds – helpful for budgeting 
• Receive a ‘Smart Score’ (a measurement of how energy efficient you are)

Is Utilita right for my business?

Being able to closely monitor energy usage is an advantage for every SME, but it specifically benefits small firms with unavoidable utilities as they commonly need to keep to a strict budget. For example:

• Retailers (eg. commercial fridges and air conditioning) 
• Hair salons (eg. hairdryers and mirror lights)
• Printers (eg. photocopiers and computers)

Businesses wanting to reduce their carbon footprint will also appreciate Utilita’s data insights – but we should note that Utilita has a poor track record on investing in eco-friendly energy. According to Which? Utilita does not currently generate any renewable electricity.

Utilita Pricing

Based on a one-year fixed rate tariff for a customer in London using 18,000 kWh, Utilita quoted us 23.96p per kWh unit rate and an expensive standing charge of 42.55p per day (this represents an uplift of 2p from Utilita’s average standing charge in 2023).

• Exit fees? No. Utilita does not charge exit fees on any business energy tariff
• Deposit? No. Utilita does not take an advance payment from new customers
• Late payment fees? Yes. Utilita charges £10 if a payment is more than two weeks late, and £30 if more than 23 days. If your payments are delayed repeatedly, a smart meter may need to be fitted for which there will be a £150 charge. On top of this, there is an £8 charge if your Direct Debit payment fails.
• Out-of-contract / deemed electricity prices: if your contract with Utilita expires you’ll be charged a minimum of 35p per kWh

EDF Energy: best for businesses in the service sector

EDF’s emphasis on easy customer service is obvious, with numerous support channels listed at the top of every small business bill.

The Big Six are the UK’s six biggest energy suppliers, all of which have a reputation as a trusted supplier that provides top-quality customer support and a reliable service provision – including EDF energy.

While many suppliers shut down their help desks, EDF has doubled down on customer service. It recently invested in Kraken, a customer tool that uses AI to provide basic support 24/7 and ensure power outages are quickly resolved for minimal business disruption.

Is EDF right for my business?

If you work for a heavily-regulated sector such as veterinary medicine or accounting, your technology is more than nice-to-have – it’s a legal requirement. EDF’s reputation and fast, round the clock support make it a good choice for businesses that need a completely reliable electricity supply, including:

• Offices looking after sensitive customer data eg. accountants or mortgage brokers
• Time-poor firms who can’t carry out in-depth research into electricity suppliers
• Health or medical clinics with concerns about reliability and meeting regulations
  

EDF Energy pricing

Based on a one-year fixed tariff for a customer in London using 18,000 kWh annually, EDF Energy quoted us a low-cost 22.1p per kWh and a huge standing charge of 75p per day (making it a poor choice for companies with low electricity usage).

• Exit fees? No. EDF Energy does not charge any exit fees if you leave your contract early – so long as you give at least 49 days notice
• Deposit? No. EDF does not take an advance payment from new customers
• Late payment fees? Yes. If you miss a monthly payment, EDF Energy will charge you a £10 late payment fee, regardless of delay time
• Out-of-contract / deemed electricity prices:  if your contract with EDF Energy expires you’ll be charged a minimum of 45p per kWh (subject to location)

What to look for in a business electricity supplier

Information overload is a real concern for SMEs exploring the electricity market. With numerous suppliers offering various tariffs and complex pricing, entrepreneurs can struggle to compare plans effectively and understand the true cost of each option.

Various factors influence a supplier’s overall rating, so there isn’t a one-size-fits-all approach to getting the best rate. The below is a good list of what to look for in a chosen electricity supplier:

1. Price: 

• Direct debit discount: in exchange for guaranteed and on-time payments, many suppliers often incentivise this method with a discount on your final bill
• Pay as you go (PAYG) payment: as of April 2024, the price cap for prepayment meters is set to be lower than direct debit for the first time

2. Customer service – choose a supplier known for efficient, responsive support channels (such as phone, email, or live web chat) who can help you resolve a problem promptly if it arises. Big Six providers can typically be relied upon to fulfil this requirement.

3. Business needs:

• Size –  some suppliers offer more flexibility, shorter contract lengths, or zero exit fees for new businesses or microbusinesses. Contacting sales representatives directly to ask about startup discounts can sometimes also lead to money off your bill.
• Consumption – time-of-use or TOU tariffs offer discounts for using electricity during off-peak hours. For example, a bakery whose main operations (ovens, mixers) are concentrated in the early mornings with minimal electricity use during the day

4. Green tariffs – wind and solar are the UK’s greenest, and now cheapest, sources of electricity thanks to the increasing wholesale costs of crude oil. These might even exempt you from the Climate Change Levy (CCL)

5. Add-ons and extras – even if their upfront costs are high, suppliers with add-ons that save you time and money – such as a mobile app (for easy access to managing and paying your energy bill) – can provide value for money in the long run than a ‘budget’ provider

6. Business energy meters – half-hourly (HH) or multi-site smart meters can accurately track power usage. This will ensure your bill accurately reflects your energy load and may even lead to cost savings

Can I just stick with my current provider?

Researching electricity suppliers is a daunting task, leading some entrepreneurs to stick with their current supplier without exploring potentially better alternatives.

But renewal offers from suppliers are often not the cheapest option, which is why switching energy providers can help your business to save money – especially as wholesale oil prices continue to fall.

If you’re looking to save time and gather personalised quotes quickly and easily, our specially-designed cost comparison tool weighs up quotes from a range of business energy brokers to help you find the right plan for your organisation when switching contracts.

What to look for in a business electricity bill

Small businesses pay between £200 and £600 per month for their electricity bill, on average. However, the rate will differ depending on key factors such as your team size, industry specialisation, and location. Plus, of course, your energy contract.

Electricity bills can be lengthy and full of legalese. Below, we break down the charges and terms that typically appear on a business electricity bill, so you can determine if you’re getting a competitive deal with a provider:

1. Business tariff

An energy tariff is essentially the type of contract you’ll be on for your business electricity use. There are two main types: fixed rate and variable.

Knowing which tariff you’re on – or want to be on – can save you a lot of money. Here are the key differences between the two:

• What is a fixed tariff? With a fixed tariff, the unit price remains the same for a set period (usually less than five years), regardless of how the market rate changes.Is it right for my business? Fixed tariffs are suitable for several types of businesses, but they offer the most benefit to those with consistent operating hours and minimal fluctuations in energy use like offices, corner shops, and hair salons.

• What is a flexible / variable tariff? With this tariff, your unit price fluctuates alongside the energy market. Variable tariffs are usually short-term, so you have greater freedom to switch suppliers when needed.
  
  Is it right for my business? Variable tariffs are typically most suitable for companies with seasonal peaks and troughs in energy consumption, like factories that operate more machinery during specific times or leisure facilities with busier weekends.

2. Energy usage charges

Every business electricity bills will contain the following charges relating to energy usage and tax requirements:

• Unit cost – measured in kWh (kilowatt hours), this is the amount paid per unit of electricity used by your business. This is often the most prominent figure on your bill
• Standing charge – a daily fee that is charged regardless of energy use on that day. (As of March 2024, Ofgem is currently conducting a public review into standing charges and may ban them in favour of per-use payments)
• Climate Change Levy (CCL): a tax on electricity bills designed to encourage businesses to reduce their carbon emissions
• VAT (Value Added Tax): a tax applied to most goods and services in the UK, including business energy bills. The current rate is 20%

3. Hidden fees

The below fees tend not to appear on business electricity bills. This lack of transparency makes it difficult for SMEs to accurately budget and avoid unexpected charges.

It’s a smart move to shop around for a supplier that shares upfront information about the below fees. You might even find a leccy firm that doesn’t charge any:

• Installation costs: charges associated with the installation, maintenance, and reading of your electricity meter
• Late payment fees: a charge for those who don’t settle their business electricity bill on time
• Smart meter charges: a fixed daily charge if you have a smart meter installed at your premises