Compare Business Electricity Rates for Care Homes and HMOs (October 2026)

Last updated: Wednesday 21 October 2026 (Europe/London).
Next update: when the government publishes its next non-domestic energy price figures (due 17 December 2026), or if HMRC changes the temporary zero rate of VAT on qualifying electricity.
By: Switch Editorial Team, Switch Squid Ltd

As of 21 October 2026, the latest government figures put the average business electricity price at 28.59p per kWh for small users (20 to 499 MWh a year) and 38.36p for the smallest users (under 20 MWh), including Climate Change Levy but before VAT, for April to June 2026; at the small-user average, 100,000 kWh a year would cost about £28,590 before VAT. Business electricity has no price cap, so care homes and HMO landlords should compare the unit rate, standing charge, contract length and tax treatment of each supply on a quote built around their own usage. Care homes can pay 0% VAT on qualifying electricity until 31 March 2027, and HMO landlords should diary their contract end dates to avoid expensive out-of-contract or deemed rates. This SwitchSquid guide shows the latest rates by business size, what they mean for a care home or an HMO, and how to compare quotes like for like. If you get quotes through our form, we may be paid by the supplier you choose; it doesn’t change the price you pay.

Sources: DESNZ — gas and electricity prices in the non-domestic sector (table 3.4.1 and 3.4.2), HMRC — VAT on fuel and power (Notice 701/19), HMRC — Climate Change Levy rates and Ofgem — get a business energy contract (all checked on 21 October 2026).

Compare business electricity quotes for your care home or HMO

• Enter your postcode, current supplier and yearly usage to compare tariffs for each meter

• Tell us which supplies are residential, communal or bills-included so quotes use the right VAT and levy

• Main limitation: final prices depend on your meter data, usage and credit check, and business contracts have no cooling-off period

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Business electricity rates by size: the latest figures

The Department for Energy Security and Net Zero publishes average prices paid by businesses every quarter, grouped by how much electricity they use in a year. The latest release, published on 29 September 2026, covers April to June 2026. These are average delivered prices per kWh, including standing charges and network costs, but excluding VAT.

Figures are provisional DESNZ averages for April to June 2026, checked on 21 October 2026. Your own price will depend on your meters, your region, when you sign, your contract length and your credit position. The next update is due on 17 December 2026.

The pattern is clear: the smallest users pay the most per unit, because fixed costs are spread over fewer kWh. That is why a small HMO on a very small supply can pay a far higher average rate than a large care home, even on similar contracts. For the wider picture, see our average business electricity rates guide and our business electricity comparison.

What these rates mean for a care home

Care homes use electricity around the clock, for lighting, laundry, kitchens, lifts, medical equipment and often heating. That steady, high load usually puts a home in the small or small/medium band, where the unit rate drives most of the bill. Three things make care home electricity different from a shop or office:

• VAT relief. HMRC’s Notice 701/19 treats homes for the elderly or disabled as residential accommodation, so their electricity counts as qualifying use. From 1 October 2026 to 31 March 2027, qualifying electricity in Great Britain is zero-rated. If at least 60% of a supply is for qualifying use, the whole supply is treated as qualifying.

• Climate Change Levy. HMRC lists homes for the elderly and disabled as domestic use for the levy, so the qualifying part of the supply shouldn’t carry it. The main rate on electricity is 0.801p per kWh from 1 April 2026, which is £801 on every 100,000 kWh.

• Usage profile. A 24/7 profile is different from a nine-to-five business, so your quote should be priced on your actual half-hourly or meter data rather than a standard profile.

Your supplier needs a VAT and levy declaration to apply these reliefs, so check that your bills show them. Our care home energy VAT guide explains the declaration, and our nursing home energy suppliers guide covers choosing a supplier. For contract timing, use our care home renewal checklist and our care home energy page.

What these rates mean for HMO landlords

HMO landlords often end up on business contracts for supplies they control, such as communal lighting, fire alarms and door entry, or for whole-house supplies when bills are included in the rent. Many smaller HMO supplies fall into the very small band, where the government average was 38.36p per kWh including the levy for April to June 2026.

• Microbusiness protections. Ofgem says you count as a microbusiness if you use up to 100,000 kWh of electricity a year, or have fewer than 10 employees and a turnover or balance sheet of no more than £2 million. Many HMO landlords qualify, which brings extra rights such as renewal price information before your contract ends.

• Deemed and out-of-contract rates. Ofgem says these are usually more expensive than a fixed contract. A supply taken over without a contract, or one left to lapse at the end of a fix, can jump in price.

• VAT on communal supplies. HMRC treats corridors, stairways and lifts in a residential building as part of the residential accommodation, so a communal supply can qualify for the lower rate with the right declaration.

• Bills-included lets. If you include energy in the rent, the business rate you pay is your cost, so a better contract protects your margin directly.

Our landlord communal electricity guide, HMO bills included guide and HMO landlord energy page go further. If you have rolled onto default rates, read our guide to deemed business electricity rates.

How to compare business electricity quotes like for like

Business electricity is priced individually, so the cheapest headline unit rate isn’t always the cheapest contract. Put every quote side by side and check the same points:

1. Yearly cost at your usage. Multiply the unit rate by your yearly kWh and add 365 days of standing charge. Compare that total, not the unit rate alone.

2. Standing charge. A low unit rate with a high standing charge can cost a small HMO more, while a large care home usually cares more about the unit rate. Our standing charge guide shows the trade-off.

3. Contract length and end date. One, two and three-year fixes price risk differently. If you run several sites, ask whether end dates can be aligned.

4. Tolerance bands and deposits. Some contracts charge more if your usage moves outside an agreed range, and some ask for a deposit.

5. Broker fees and commission. Ofgem says you should know whether any broker fees or commission are included in the price before you agree.

6. VAT and levy treatment. Make sure each quote applies the right VAT rate and levy exemption for each supply.

7. What happens at the end. Check whether the contract rolls over automatically or moves to out-of-contract rates.

Choose a fixed contract that fits your sites

• Compare one, two and three-year fixes on total yearly cost, including standing charges

• Ask for aligned end dates across several homes or properties

• Check tolerance bands, deposits and what happens at the end of the contract

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Fixed, variable or flexible: which contract suits you?

Ofgem describes several types of business energy contract, and suppliers may not offer all of them:

• Fixed-rate contracts fix the unit rate and standing charge for the term. They suit most care homes and HMO landlords who want a predictable budget.

• Variable-rate contracts can go up or down with wholesale prices, which suits businesses comfortable with some risk.

• Rollover or evergreen contracts renew automatically if you don’t make a new arrangement, often for 12 months and sometimes at a higher rate.

• Flexible contracts let very large users buy energy in portions over time, and are rarely right for a single care home or HMO.

Whichever you pick, remember that Ofgem says there is no cooling-off period once you agree a business contract. Read the terms before you sign, and start comparing four to six months before your current deal ends. Our microbusiness energy rights guide explains the notice rules.

What you need for an accurate quote

• Your electricity meter number (MPAN) for each supply, from your bill.

• Your yearly usage in kWh for each meter, or your last 12 months of bills.

• Your current supplier and contract end date.

• For care homes, which areas are residential and which aren’t, so the VAT and levy split is right.

• For HMOs, which supplies are communal, which are bills-included and which tenants pay directly.

You can also ask Squid AI, SwitchSquid’s AI deal assistant, what to have ready, or follow our guide to getting a business energy quote with Squid AI.

Fit summary

• Care homes: compare on a 24/7 usage profile, and check that each quote applies 0% VAT on qualifying electricity until 31 March 2027 and the levy exemption.

• HMO landlords: compare total yearly cost including the standing charge, because small supplies are hit hardest by fixed charges.

• Multi-site owners: ask for aligned end dates across homes or properties so you renew once, not several times a year.

Important conditions

• Business electricity has no price cap, and prices depend on your meters, usage, region and credit check.

• The government figures are averages for April to June 2026 and exclude VAT.

• Business contracts have no cooling-off period once agreed.

• Deemed and out-of-contract rates are usually higher than a fixed contract.

• VAT and levy reliefs need the right declaration with your supplier.

Final decision card

Running a care home? Get quotes priced on your 24/7 load, with the right VAT and levy treatment for each meter.
Letting an HMO? Compare yearly cost including the standing charge, and diary your end date so you never roll onto deemed rates.
Contract ending in the next six months? Start comparing now.

Check business electricity prices for your care home or HMO

• Have each MPAN, your yearly kWh and contract end date ready

• Works for single sites and portfolios

• Start four to six months before your contract ends

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FAQ

What is the average business electricity rate in the UK?

Government figures for April to June 2026 put the average at 24.51p per kWh including Climate Change Levy, before VAT. Small users on 20 to 499 MWh a year paid 28.59p on average, and the smallest users paid 38.36p. Your own quote will depend on your usage, meters and contract.

Is there a price cap on business electricity?

No. The Ofgem price cap only covers household tariffs. Business electricity prices are agreed individually, which is why comparing quotes matters.

Do care homes pay VAT on electricity?

Care homes for the elderly or disabled count as residential accommodation under HMRC’s Notice 701/19, so their electricity is qualifying use. From 1 October 2026 to 31 March 2027, qualifying electricity in Great Britain is zero-rated. Your supplier needs the right declaration to apply it.

Do HMO landlords need a business electricity contract?

Often, yes, for supplies the landlord controls, such as communal areas or whole-house supplies in bills-included lets. Tenant-controlled supplies can usually stay on household contracts in the tenant’s name. Check how each meter is used before you get quotes.

What are deemed business electricity rates?

Deemed rates apply when you use energy at a property without agreeing a contract, such as after taking over a building. Ofgem says they are usually higher than negotiated rates. Agreeing a contract quickly is the simplest way to avoid them.

When should I compare business electricity rates?

Start four to six months before your current contract ends. That gives you time to compare quotes and give any notice your contract needs. Business contracts have no cooling-off period, so leave time to read the terms.

Am I a microbusiness for energy?

Ofgem says you qualify if you use up to 100,000 kWh of electricity a year, or have fewer than 10 employees and a turnover or balance sheet of no more than £2 million. Microbusinesses get extra protections, such as renewal price information before the contract ends. Many HMO landlords and smaller care homes qualify.

Last updated: Wednesday 21 October 2026 (Europe/London).
Next update: when the government publishes its next non-domestic energy price figures (due 17 December 2026).
By: Switch Editorial Team, Switch Squid Ltd