Are you paying too much for business electricity? How to find better rates

We’d all like to pay a little bit less for our business electricity bills. The market is tough, but finding the right contract for your business isn’t out of reach.

Finding competitive rates is crucial for your business. Electricity is a significant, essential expenditure for many organisations and locking into the wrong contract can prove costly.

Evaluating your current energy deal, understanding what you’re paying for, and knowing basic principles to secure strong rates will help your business when it’s time to find a new contract.

In this article:

• Learn whether you may be paying too much for your business electricity.
• Understand your bill to know what you’re paying for.
• Discover practical ways to find a more competitive rate.

How do you know if you’re paying too much for business electricity?

UK businesses pay more for their industrial energy than any other member of the International Energy Agency (IEA) where data is available, according to the Department for Energy Security and Net Zero.

Ultimately, energy prices in the UK are objectively high in comparison to other nations.

That doesn’t mean you can’t find a contract that works for your business.

It’s worth comparing your unit rate and standing charges with current market rates for a rough idea of where your prices lie.

However, that won’t tell the whole story. The length of your contract - and when you acquired the contract - will heavily impact what your rates look like.

It’s not always easy to sense whether you’re paying over the odds, especially in such a volatile market.

What should you look for on your electricity bill?

Beyond headline figures for unit rates and standing charges, it’s worth looking deeper at specific costs and terms on your bill.

• Contract length (term): This is how long your agreement lasts. The closer you are to the end of your term, the sooner you should start preparing to find a new contract.
• Capacity charges: Business electricity customers with Half-Hourly (HH) meters will pay kVA capacity charges. Make sure your kVA is set at a reasonable level - not too high or low - to avoid over-paying or running too close to the limit. You may be able to request a change via your supplier or Distribution Network Operator (DNO).
• Metering costs: Your contract might include separate lines including fees for installing or maintaining your energy meter, or they could be rolled into standing charges.
• Billing type (estimated vs. actual): Your energy bill may be based on estimated readings if your meter isn’t regularly updated. Make sure you’re sending regular readings, or have a smart meter, to receive accurate bills.
• VAT and other taxes: Most businesses pay VAT on energy at 20%, but some may qualify for a reduced rate of 5%. Other environmental levies, including the Climate Change Levy (CCL), come with discounts for eligible organisations. Make sure you’re paying the correct rates.

Why might your business be paying more than it needs to?

There are many reasons why you could be paying more than necessary for your energy bill. A few of the most common include:

• Unfavourable renewal: Businesses whose contracts expired during heightened, volatile markets may have locked into long-term deals at high rates long after the spike.
• Unsuitable contract: Your terms may not be a good fit with your business usage.
• Changed consumption: If your business has undergone a period of growth, that contract you signed a couple of years ago may no longer suit your current operations.
• Inefficiency: You might be on a suitable contract but wasting energy through inefficient practices.
• Irregular monitoring: Keeping an eye on your usage throughout your contract term is good practice. Smart meters or simply taking regular manual readings can help identify usage patterns.
• Lack of a review: Simply, it may have been a while since you considered your energy deal. It’s understandable with so much to think about every day. A once competitive deal may no longer remain competitive.

How can you find a better business electricity rate?

If you think you could be paying too much for your electricity, follow these steps to put yourself in the best position to find a stronger electricity contract.

1. Review your current terms and conditions. Note renewal deadlines and your contract expiry date.
2. Understand your business usage. Monitoring can help you spot usage patterns, boost efficiency and provide accurate data to take to suppliers.
3. Compare rates with your current supplier and, crucially, other suppliers. Don’t just assume your current supplier will offer the best deal. Shop around and compare options.
4. Ask an energy consultant or broker to help you understand the market, compare options and negotiate with multiple suppliers on your behalf, if you want support making a confident, informed decision.

A better rate isn't necessarily about finding the lowest number on a quote. It's about finding a deal that is competitive and appropriate for your business.

How we can help

Business electricity is complex. We get it. We can support you.

Troo exists to help businesses make sense of their energy needs. We simplify information and help you make smart decisions that manage costs and lead to real change.

We are not here to sell you a quick fix. We're here to understand what matters to you, offer clear advice, and take ownership of the hard parts, so energy becomes one less thing to worry about.

Book a free energy health check today for practical advice on business electricity, gas and water procurement, renewable consultancy and our ongoing management services.