Does the energy price cap apply to businesses?

The energy price cap is frequently talked about in the news, but does it affect business energy contracts?

In short? No. Ofgem, the UK energy regulator, sets the price cap for domestic use. Business energy contracts do not benefit from the cap.

However, that doesn't mean businesses are powerless against rising energy costs.

Here's what the October 2026 energy price cap means and how your business can manage exposure to volatile energy markets.

In this article:

• Learn what the energy price cap is and what it means for October 2026.
• Understand why the price cap does not apply to most business energy customers.
• Discover practical ways to manage rising business energy costs.

What is the energy price cap for October 2026?

The energy price cap for the period from 1^st October to 31^st December is scheduled to be announced on 26^th August 2026.

Forecasts currently suggest the cap could rise by around 4% to approximately £1,729 a year for an average household using a dual-fuel tariff.

This does not mean every household will pay £1,729. Actual bills depend on how much energy is used.

And note the word ‘household’.

Businesses do not qualify for the price cap, which limits the rates suppliers can charge eligible domestic customers for electricity and gas, including unit rates and standing charges.

Why does the energy price cap not apply to businesses?

The price cap was designed for eligible domestic customers rather than business energy contracts.

The price cap was introduced to protect eligible domestic customers on standard variable and default tariffs from being charged excessive rates.

Businesses buy energy under a much wider range of commercial arrangements, with prices influenced by usage, contract type and market conditions.

Organisations are expected to procure their own energy, or use a broker to do so, without a hard ceiling on unit rates and standing charges.

How are business energy prices set?

Business energy prices are ultimately set by suppliers. However, the lack of a price cap doesn’t mean suppliers can simply charge whatever they like.

Ultimately, suppliers are selling a product and must price energy accordingly to avoid customers switching to rivals.

Energy prices are made up of three key areas. The proportion of each can vary significantly between businesses and contracts:

• 40% - Wholesale energy: The gas or electricity used by your business.
• 30% - Network costs: Charges to fund the national electricity grid, also known as transmission and distribution costs.
• 30% - Taxes and levies: Charges imposed by the government to support environmental policies, schemes and initiatives, plus VAT.

Yes, only around 40% of a typical energy bill actually pays for the fuel you use to power your business.

What protection do businesses have against high energy prices?

Your business is not protected by the price cap, but that doesn’t mean you’re entirely on your own.

Ofgem’s Standards of Conduct also provide eligible businesses with safeguards designed to keep them informed about their contracts, including important dates and changes.

If you use a broker, suppliers are required to disclose the broker fees, so you know what you're paying and who you're paying it to.

However, businesses do not have the same price protection provided by the domestic price cap.

Six ways businesses can manage rising energy costs

1. Know when your contract ends: Avoid missing renewal opportunities or moving onto expensive out-of-contract rates.
2. Review your energy strategy early: Don't wait until your contract is about to end before considering what to do next. The earlier you look, the more options should be available.
3. Choose the right contract structure: Consider whether fixed or flexible purchasing better suits your budget and appetite for risk.
4. Look beyond the headline unit rate: Contract terms, standing charges and other costs can affect the overall value of a deal - and level of risk.
5. Monitor how you use energy: Understanding when and where energy is used can help identify unnecessary costs.
6. Get expert advice before making major decisions: Energy markets are complex. Independent guidance can help you understand your options and make informed decisions.

Top tip: Longer fixed-term contracts may look more expensive, but they can offer greater certainty by fixing your agreed energy rates for potentially years to come. However, they aren't automatically the best option for every business.

How we can help

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

Troo exists to help businesses like yours make sense of their energy needs, simplify complex information and make smart decisions that lead to real change and reduced costs.

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 guidance on your business electricity, gas or water bills.