Business Energy Cost Calculator
Estimate your annual electricity and gas bill from your sector, floor area and opening hours, then plug in your real unit rates to sharpen it.
- Free, no sign-up
- Runs in your browser, nothing is stored
- 2026/27 rates, reviewed 2nd September 2026
Business Energy Cost Calculator
Enter your figures to see results.
How much should my business be paying for energy?
A typical 80 m² café open 55 hours a week spends around £10,000 a year on electricity and gas before VAT; an office of the same size perhaps a quarter of that. Your sector and floor area drive most of the bill. Pick your business type and size for a benchmark range, then enter the unit rates from your bill for a figure specific to your contract.
How to use this calculator
- Choose your business type and enter the floor area of your premises.
- Set your weekly opening hours and staff numbers, and whether you have gas as well as electricity.
- Enter the unit rates from your latest bill or quote. The defaults are typical current small-business rates.
What your result means
How to read the figure, what counts as normal, and what to do about it.
How the estimate is built
Business energy use is dominated by two things: what kind of business it is and how big the premises are. A café uses several times more energy per square metre than an office because of refrigeration, cooking and hot water; a warehouse uses a fraction. This calculator starts from published benchmarks of kilowatt-hours per square metre for each sector, scales them to your floor area, then adjusts for opening hours (longer hours mean more lighting, heating and equipment time) and staff density.
It then applies unit rates and standing charges typical of current UK non-domestic contracts, plus the Climate Change Levy that most businesses pay. The result is shown as a range because equipment age, insulation and habits vary widely between otherwise similar premises. Enter the unit rates from your latest bill and the estimate becomes specific to your contract.
What is on a business energy bill
| Component | What it is |
|---|---|
| Unit rate (p/kWh) | The price per kilowatt-hour used. The bulk of most bills. |
| Standing charge (p/day) | Fixed daily charge for the connection, paid whether you use energy or not. Has risen sharply since 2022. |
| Climate Change Levy | Government environmental tax on business energy, around 0.78p/kWh. Charities and very small users may be exempt. |
| VAT | 20% on business energy, or 5% if usage is below 33 kWh/day electricity (1,000 kWh/month) or 145 kWh/day gas, or for charities. |
| Capacity / availability charge | Larger sites only: a charge for the maximum power the connection can supply. |
Unlike domestic energy, business tariffs have no price cap. Contracts are fixed for one to five years, and at the end of a fixed term you move to a "deemed" or "out of contract" rate that is often 50–100% higher. Diarise the renewal window.
Cutting the bill
- Renegotiate before renewal. Start 3–4 months before the end date; suppliers rarely offer their best rate to a customer who has rolled over.
- Read your own meter or get a smart meter fitted so you are billed on actual use, not estimates.
- Lighting is usually the quickest win: LEDs use 60–80% less than fluorescent or halogen and pay back within two years in most premises.
- Heating and cooling account for 40–60% of use in offices and shops. A programmable thermostat set 1°C lower saves roughly 8% of heating cost.
- Refrigeration in food businesses: door seals, night blinds, condenser cleaning and not over-filling can cut refrigeration use by 10–20%.
- Check the VAT rate on your bill if you are a very small user or a charity; overpaid VAT can be reclaimed for up to four years.
Worked example: a high-street café
An 80 m² café with 4 staff, open 55 hours a week on electricity and gas, paying 26p/kWh for electricity and 7p/kWh for gas.
Café benchmark: 350 kWh/m² electricity and 400 kWh/m² gas. The hours match the sector norm, so the hours factor is 1.0; four staff on 80 m² is slightly below the typical density, so the staff factor trims electricity by about 2.5%.
Electricity: 350 × 80 × 0.975 = 27,300 kWh, costing about £7,100 in units, £220 standing charge and £210 levy: roughly £7,530.
Gas: 400 × 80 = 32,000 kWh, costing about £2,240 in units, £164 standing charge and £248 levy: roughly £2,650.
Central estimate about £10,180 a year excluding VAT, shown as a range of roughly £9,000 – £11,400. A 15% efficiency programme would be worth around £1,530 a year.
Frequently asked questions
How accurate is this estimate?
Good enough to sanity-check a quote or a budget, not good enough to replace your meter readings. Businesses of the same type and size commonly vary by 30% or more in real use. Once you have twelve months of bills, use those instead.
Why is my standing charge so high?
Non-domestic standing charges rose steeply from 2022 as network costs and supplier failure costs were recovered. They are negotiable to a degree in a contract renewal, and are a reason to compare total annual cost rather than unit rate alone.
Should I pay 5% or 20% VAT on business energy?
20% unless you are a charity, use energy for domestic or residential purposes, or your usage is below the de minimis thresholds, an average of 33 kWh of electricity or 145 kWh of gas a day. Very small shops, studios and offices often qualify without realising.
Are business energy prices capped?
No. The domestic price cap does not apply, and the temporary government support schemes of 2022–24 have ended. Prices are set by the contract you sign, which is why timing and comparison matter.
Can I switch supplier mid-contract?
Not normally without an exit fee. You can, however, agree a new contract with your current or another supplier to start when the fixed term ends, usually up to 12 months in advance. Micro-businesses have the right to end a rolled-over contract with 30 days' notice.
The maths behind this calculator
For anyone who wants to check the working or rebuild it in a spreadsheet.
The calculation
Electricity kWh = Sector benchmark (kWh/m²) × Floor area × Hours factor × Staff factor Gas kWh = Sector benchmark (kWh/m²) × Floor area × Hours factor Hours factor = 0.4 + 0.6 × (Your hours ÷ Typical hours for the sector) [0.6 – 1.8] Cost = kWh × Unit rate + Standing charge × 365 + kWh × Climate Change Levy Range = Central estimate ± 12%
The 40/60 split in the hours factor reflects that some consumption (refrigeration, standby loads, frost protection, servers) runs whether or not you are open.
Assumptions and limits
- Sector benchmarks are indicative annual figures derived from published UK non-domestic building energy benchmarks (CIBSE TM46, Carbon Trust sector guides and DESNZ statistics), simplified for small premises. Your equipment, building fabric and habits can move the real figure well outside the ±12% range.
- Default unit rates and standing charges reflect typical current UK small-business contracts based on Ofgem non-domestic market indicators. Fixed contracts agreed at different times will differ substantially; use your own bill.
- The Climate Change Levy is included at the main rate. VAT is excluded; add 20% (or 5% if you qualify for the reduced rate) for the gross figure.
- Electricity-only premises are assumed to heat with electricity; the model does not add heat-pump or resistive heating loads separately, so all-electric heating in a large or poorly insulated building will be underestimated.
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