How to Get Cheaper Business Electricity 2026: 10 Steps

Last updated: Sunday 1 November 2026

How do you get cheaper business electricity? Fix a new contract before your current one ends, compare the unit rate and standing charge together on your real yearly usage, and claim any VAT or Climate Change Levy relief you qualify for. As of 1 November 2026, Bionic’s panel for 1 to 12 October 2026 shows a micro business paying an average of 28.4p per kWh and 58.0p a day, about £3,052 a year at 10,000kWh, while the government’s latest figures put the average very small business at 38.36p per kWh including the levy. That gap is where the savings sit, and it is widest for firms rolled onto deemed or out-of-contract rates. This SwitchSquid guide gives a ten-step plan with worked examples for a 30-bed care home and a six-bed HMO, so you know what to ask for before you request a quote. If you request quotes through this page, we may be paid by the supplier you choose; it does not change the price you are quoted.

Sources: Bionic business electricity rates, DESNZ non-domestic energy prices (updated 29 September 2026), Ofgem, get a business energy contract and HMRC Climate Change Levy rates, checked on 1 November 2026.

What business electricity costs in October 2026

Bionic publishes the average prices its panel of suppliers quoted between 1 and 12 October 2026. These figures include the maximum broker commission, so a direct or lower-commission quote can come in below them.

The government’s figures tell a different story because they are averages of what firms actually paid, including old contracts and deemed rates. DESNZ puts the average for April to June 2026 at 38.36p per kWh for very small businesses and 28.59p for small businesses, both including the Climate Change Levy. Our guide to business electricity prices per kWh tracks both series.

Ten steps to cheaper business electricity

1. Find your contract end date. Use our contract end checker. Most suppliers let you agree a new contract months before the end date, and you should not wait until the last week.

2. Stay off deemed and out-of-contract rates. Ofgem says these rates are usually higher than an agreed contract. See our guides to deemed rates and out-of-contract rates.

3. Check if you are a microbusiness. Ofgem counts you as one if you have fewer than 10 employees and turnover or a balance sheet of no more than £2 million, or use no more than 100,000kWh of electricity or 293,000kWh of gas a year. Microbusinesses get extra protections.

4. Give suppliers your real usage. Quotes based on estimates can be wrong in either direction. Use your last 12 months of bills or meter readings.

5. Know your meter. A half-hourly meter is priced differently from a standard meter, and time-of-use rates can reward shifting load.

6. Compare the yearly cost, not the unit rate. Multiply the unit rate by your kWh and add 365 days of standing charge. A low unit rate can be wiped out by a high daily charge.

7. Ask what the broker earns. Since 1 October 2024, Ofgem’s rules have required suppliers to show broker fees in the terms of new business contracts, and microbusinesses must also be told the total. Suppliers may only use brokers that belong to a redress scheme for micro and small business contracts.

8. Claim VAT relief if you qualify. Electricity used for qualifying residential or charitable purposes can get relief, and small users below the de minimis level of 1,000kWh a month also pay a reduced rate rather than 20%. In Great Britain, the reduced rate on qualifying electricity is 0% from 1 October 2026 to 30 June 2027, and 5% from 1 July 2027. In Northern Ireland, the reduced rate on qualifying electricity stays at 5%. Send your supplier a VAT declaration.

9. Check the Climate Change Levy. The levy is 0.801p per kWh on electricity from 1 April 2026, rising to 0.827p from April 2027. Firms with a Climate Change Agreement get a 92% discount, and domestic use is not charged. Our Climate Change Levy guide explains how to claim.

10. Use less and check the bills. Read the meter, query estimated bills and look at the daytime base load. Cutting usage reduces every pence-per-kWh charge on the bill.

What makes up a business electricity bill

Worked example: a 30-bed care home

This example is illustrative. Our care home energy costs per bed guide uses 5,000kWh of electricity a year per bed, so a 30-bed home would use about 150,000kWh. At the DESNZ small business average of 27.87p per kWh before the levy, that is about £41,805 a year. At Bionic’s large business panel average of 26.1p per kWh and 173.0p a day, it would be about £39,781, roughly £2,000 less.

Every 1p per kWh you take off the unit rate saves a 30-bed home about £1,500 a year. Care homes also need to check VAT. Electricity for residential care can qualify for relief, and our guide to care home energy VAT explains the declaration. If your renewal is coming up, use our care home contract renewal checklist and see our care home energy page.

Worked example: a six-bed HMO

This example is also illustrative. A six-bed HMO using 9,000kWh of electricity a year would pay about £3,452 at the DESNZ very small business average of 38.36p per kWh. At Bionic’s micro panel average of 28.4p per kWh and 58.0p a day, it would be about £2,768, roughly £680 less.

Every 1p per kWh is worth about £90 a year to that landlord. If the bills are in your name on a business contract, check whether the tenants’ use qualifies for VAT relief, as our HMO electricity VAT guide explains. Our HMO energy costs per room guide and our HMO landlord energy page have more detail.

Should you go direct or use a broker?

Going direct means you only see one supplier’s prices. A broker can search many suppliers at once, which saves time, but its commission is built into your rates, so ask for the figure. If you use a broker, you will usually sign a letter of authority so it can request your data. Our list of the best price business electricity suppliers shows how supplier prices compare at different usage levels.

Fit summary

• Act now if: your contract ends in the next six months, or you are on deemed or out-of-contract rates.

• Care homes: the savings per 1p are large, and VAT relief on residential use can be worth checking.

• HMO landlords: a fixed contract protects you when the bills are included in the rent.

• Look elsewhere if: your property is your home on a domestic meter, as this guide covers business contracts only.

Important conditions

• Bionic’s figures are panel averages from 1 to 12 October 2026, including maximum broker commission. Your quote depends on your usage, meter and location.

• DESNZ figures are averages of what businesses paid in April to June 2026 and include older contracts.

• Business energy contracts have no cooling-off period, so read the terms before you agree.

• VAT and Climate Change Levy relief depend on how the electricity is used. Check with your supplier or adviser.

• The worked examples are illustrations, not quotes.

Final decision card

The cheapest business electricity comes from fixing before your end date, comparing yearly costs at your real usage and claiming any VAT or levy relief. For a care home or HMO, even 1p per kWh adds up fast. Send your usage and end date through the form to request quotes, or ask Squid AI a question first.

FAQ

What is a good business electricity rate?

Bionic’s panel for 1 to 12 October 2026 averaged 28.4p per kWh and 58.0p a day for micro businesses. Larger users averaged 26.1p per kWh but with a higher standing charge. A good rate is one that gives a low yearly cost at your real usage.

When should I renew my business electricity contract?

Start looking several months before your contract ends. Many suppliers let you agree a new deal well ahead of the end date. Leaving it too late can put you on out-of-contract rates.

Why are deemed rates so expensive?

Deemed rates apply when you use energy without an agreed contract, for example when you move into new premises. Ofgem says they are usually higher than contract rates. Agreeing a contract quickly is the simplest way to avoid them.

Can a care home get cheaper business electricity?

Yes. A 30-bed home using about 150,000kWh saves around £1,500 a year for every 1p per kWh off the unit rate. Electricity for residential care can also qualify for VAT relief.

How can HMO landlords cut electricity costs?

Fix a business contract before the current one ends and compare the yearly cost at your real usage. In our six-bed example, each 1p per kWh is worth about £90 a year. Check whether the tenants’ use qualifies for VAT relief too.

Is there a cooling-off period for business energy?

No. Ofgem says business energy contracts do not have a cooling-off period. Read the contract before you agree, including the length and any exit fees.

Do I pay the Climate Change Levy?

Most businesses pay it on electricity at 0.801p per kWh from 1 April 2026. Domestic use is not charged, and firms with a Climate Change Agreement get a 92% discount. Charities using electricity for non-business purposes may also be exempt.