Micro Business Electricity Prices UK: 28.4p per kWh

Last updated: 27 October 2026

What do micro businesses pay for electricity? In October 2026, the average quote for a micro business using 5,000 to 15,000kWh a year was 28.4p per kWh with a 58.0p daily standing charge, about £3,052 a year at 10,000kWh before VAT, according to Bionic’s supplier panel. Government figures for April to June 2026 put the average delivered price for the smallest business users, under 20,000kWh a year, at 38.36p per kWh including the Climate Change Levy, which shows how much prices vary once standing charges, renewal rates and out-of-contract tariffs are counted. Most HMO landlords, and many small care homes, count as micro businesses for energy, which gives them extra rights at renewal: clear prices before they sign, a 30-day cap on notice periods for rolling contracts and a 12-month limit on back bills. This SwitchSquid guide shows the October rates by business size, explains the micro test in plain English and works through costs for a six-bed HMO and a 12-bed care home. If you get quotes through our form, we may be paid by the supplier you choose; the quote service is free to you.

Sources: Bionic business electricity rates, October 2026, DESNZ gas and electricity prices in the non-domestic sector and Ofgem, get a business energy contract, all checked on 27 October 2026.

Micro business electricity prices: October 2026 rates by size

Business energy prices are agreed contract by contract, so there is no single official rate. The most useful snapshot comes from broker panels, which average the quotes suppliers are offering at a point in time. Bionic publishes these monthly, and other comparison sites quote the same panel figures. The table below shows Bionic’s October 2026 averages, gathered from 1 to 12 October.

Figures are Bionic’s averages, including its maximum commission and excluding VAT, from its panel of suppliers between 1 and 12 October 2026. Your own quote depends on your meter type, location, contract length and credit check. For gas, the same panel shows micro businesses paying 8.8p per kWh and 44.9p a day, about £1,044 a year at 10,000kWh.

Two things jump out. First, the smallest users pay the highest unit rate, because suppliers’ fixed costs are spread over fewer kWh. Second, the standing charge does not rise neatly with size: the small band’s 118.9p a day is double the micro band’s. That is why a quote with a low unit rate is not automatically the cheapest; you need to add both parts together for your real usage.

What government figures say: the wider picture

Broker averages are quotes for new fixed contracts. The Department for Energy Security and Net Zero (DESNZ) measures something different: what businesses actually paid on average, across every contract type, including standing charges and network costs. Its latest figures, for April to June 2026, show:

• Very small users (under 20,000kWh a year): 38.36p per kWh including the Climate Change Levy.

• Small users (20,000 to 499,999kWh a year): 28.59p per kWh including the levy.

The gap between 28.4p on a fresh micro quote and 38.36p actually paid by the smallest users is the strongest argument for comparing at renewal. Part of it is standing charges, which weigh heavily on low users, but part is businesses sitting on rollover, out-of-contract or deemed rates that are well above a negotiated fix. DESNZ’s next update is due on 17 December 2026. For more detail, see our business electricity prices per kWh and business electricity standing charge guides.

Are you a micro business? The Ofgem test

For energy, “micro business” has a specific meaning, and it is broader than many owners expect. Ofgem says you are a microbusiness if you meet either of these tests:

• Size test: fewer than 10 employees (or full-time equivalents) and an annual turnover or balance sheet of no more than €2 million (Ofgem’s consumer pages round this to £2 million).

• Usage test: you use no more than 100,000kWh of electricity a year, or no more than 293,000kWh of gas a year.

If you pass on usage, staff numbers do not matter. That is why most HMO landlords qualify: even a large shared house rarely uses more than 20,000kWh of electricity a year. Many small care homes qualify on usage too, even though they employ well over ten people.

Note that broker size bands are not the same as Ofgem’s definition. A care home using 60,000kWh a year sits in Bionic’s “large” price band, but it is still a microbusiness under Ofgem’s usage test, with all the protections that brings.

What being a micro business means for your contract

Microbusiness status gives you protections that larger firms do not get. As of 27 October 2026, the main ones are:

• Clear renewal information. Before a fixed contract ends, your supplier must send your current prices, the new prices it would charge and your yearly usage. Ofgem says this must come at least 60 days before the end date.

• 30-day notice cap. On a rolling or evergreen contract, your supplier cannot ask for more than 30 days’ notice to leave.

• Rollover limit. If you are rolled onto a new fixed term without agreeing a new deal, that term cannot last more than 12 months.

• 12-month back-billing limit. You do not have to pay for energy used more than 12 months ago if you were never correctly billed for it.

• Broker cost transparency. Any broker cost added to your bill must be shown in your contract’s principal terms.

• Energy Ombudsman. If a complaint is not resolved, you can take it to the Energy Ombudsman free of charge.

One thing micro status does not give you is a cooling-off period. A business contract agreed over the phone or online is usually binding straight away, so read the principal terms before you say yes. Our microbusiness energy rights guide covers each right in detail.

Worked example 1: a six-bed HMO

Take a six-bedroom HMO where the landlord pays the electricity for the whole house, using 9,000kWh a year. On usage alone it is a microbusiness.

• At Bionic’s October micro average: 9,000kWh at 28.4p is £2,556, plus 58.0p a day (£212), so about £2,768 a year before VAT.

• At the DESNZ very small users average: 9,000kWh at 38.36p is about £3,452 a year, including the levy and standing charges.

The difference, almost £700 a year, is roughly what is at stake between a competitive fix and a poor renewal or rollover rate for a house this size. Tax matters too. Electricity for tenants’ domestic use in Great Britain is charged at 0% VAT from 1 October 2026 to 31 March 2027, but only if your supplier knows the supply is for domestic use; our HMO electricity VAT guide explains the declaration. For more per-room detail, see HMO energy costs per room.

Worked example 2: a 12-bed care home

Now take a small 12-bed care home using 60,000kWh of electricity a year, about 5,000kWh per bed, in line with our care home energy costs per bed example. It is a microbusiness on usage, but it falls into the large price band.

• At Bionic’s October large-band average: 60,000kWh at 26.1p is £15,660, plus 173.0p a day (£631), so about £16,291 a year before VAT.

• At the DESNZ small users average: 60,000kWh at 28.59p is about £17,154 a year, including the levy.

For a care home, the bigger saving is often tax rather than the unit rate. Qualifying residential electricity can be charged at 0% VAT until 31 March 2027 instead of 20%, and qualifying use can be exempt from the Climate Change Levy. On £16,000 of electricity, wrongly paying 20% VAT on the qualifying share could cost thousands a year. Our care home electricity VAT guide and care home renewal checklist explain what to send your supplier. This is general information, not tax advice.

How to get a fair micro business electricity price

1. Find your yearly kWh. It is on your bills or online account. Without it, every quote is a guess.

2. Note your contract end date. Start comparing about four months before it, and certainly once your renewal letter arrives.

3. Compare total yearly cost, not just the unit rate. Multiply your kWh by the unit rate, add 365 days of standing charge, then compare.

4. Check VAT and the levy are set up correctly. Most businesses pay 20% VAT, but HMO domestic supplies, qualifying care home use and very low users can pay less.

5. Ask how any broker is paid. It should be shown in the principal terms.

6. Do not let it roll over. Out-of-contract and deemed rates are usually much higher than a fixed deal.

If you are comparing suppliers too, our small business electricity suppliers guide sets out the main types and what each suits.

Fit summary

• Get quotes now: your contract ends in the next six months, you are out of contract, or you are paying well above 30p per kWh.

• Consider a longer fix: you want budget certainty for two or three years and your usage is steady.

• Check tax first: you run an HMO or care home and your bills show 20% VAT on supplies that should qualify for a lower rate.

• Wait for your renewal letter: you are mid-way through a good fix and leaving early would trigger exit fees.

Want a second opinion? Squid AI, SwitchSquid’s AI assistant, can help you turn your yearly kWh and quoted rates into a total yearly cost.

Important conditions

• Bionic’s figures are averages from its supplier panel for 1 to 12 October 2026, including its maximum commission and excluding VAT. They are not quotes.

• DESNZ figures are provisional averages for April to June 2026, including the Climate Change Levy but excluding VAT.

• Business energy contracts have no cooling-off period, and prices are set in each contract. Final prices depend on your meter data, usage and a credit check.

• VAT and Climate Change Levy treatment depends on how each supply is used. Confirm your position with your accountant.

• Our form is for business premises and non-domestic meters only.

FAQ

What is the average micro business electricity price per kWh?

Bionic’s October 2026 panel average for micro businesses using 5,000 to 15,000kWh a year was 28.4p per kWh, with a 58.0p daily standing charge. Government figures for April to June 2026 put the average actually paid by the smallest users at 38.36p per kWh, including the levy and standing charges.

How do I know if my business is a micro business for energy?

Ofgem treats you as a microbusiness if you have fewer than 10 employees and turnover or a balance sheet of no more than €2 million, or if you use no more than 100,000kWh of electricity or 293,000kWh of gas a year. Passing either test is enough.

Is an HMO a micro business for energy?

Usually, yes. Most HMOs use far less than 100,000kWh of electricity a year, so they qualify on usage alone, whatever the size of the landlord’s portfolio. That gives the landlord microbusiness protections on each supply that qualifies.

Can a care home be a micro business?

Yes, if it uses no more than 100,000kWh of electricity or 293,000kWh of gas a year. Many small care homes qualify on usage even though they employ more than ten staff.

Do micro businesses get a cooling-off period on energy contracts?

No. Business energy contracts generally have no cooling-off period, even for microbusinesses, so a contract agreed by phone can be binding immediately. Read the principal terms before you agree.

How much notice do I need to give to leave a business energy contract?

On a rolling or evergreen contract, a supplier cannot ask a microbusiness for more than 30 days’ notice. On a fixed contract, you can usually leave at the end date without a fee if you give notice in the window your contract sets out, so act when your renewal letter arrives.

What standing charge do micro businesses pay for electricity?

Bionic’s October 2026 panel average for micro businesses was 58.0p a day, about £212 a year. Small businesses using 15,000 to 25,000kWh averaged 118.9p a day, so compare the unit rate and standing charge together for your real usage.

Final decision card

A fair micro business electricity price in October 2026 is around 28.4p per kWh with a standing charge near 58p a day, while the smallest users actually paid an average of 38.36p in the spring. If you run an HMO, a small care home or any business using under 100,000kWh a year, you are probably a microbusiness with the right to clear renewal prices and a 30-day notice cap. Get quotes before your end date, compare the total yearly cost and check VAT is set up correctly.