Business Energy Cost Calculator

Last updated: April 2026

Business profile

Business sectorAnnual revenue

GBP

Number of employees

people

Floor area

sqm

Annual electricity usage

kWh

Annual gas usage

kWh

No gas

Rates and taxes

Electricity unit rate

p/kWh

Electricity standing charge

p/day

Gas unit rate

p/kWh

Gas standing charge

p/day

VAT rate

Include Climate Change Levy

Annual cost headline

£11,987

Monthly

£999

Per day

£32.84

Revenue share

2.4%

Cost breakdown

Electricity: £6,329
Gas: £3,183
Climate Change Levy: £478
VAT (20%): £1,998
Total: £11,987

Intensity metrics

Cost per employee: £1,199/year
Cost per sqm: £23.97/year
% of revenue: 2.4%

Industry benchmark

Sector average

£20/sqm

Your cost

£23.97/sqm

Rating

Average

When does your energy contract end?

Business energy contracts typically last 1-3 years. Switching at renewal can save 20-40%. Out-of-contract rates are significantly higher.

Compare business energy rates

Climate Change Levy saving

If you switch to a 100% renewable tariff with REGO certificates, you can be exempt from CCL.

Potential saving: £478/year

Saving opportunities

Check whether a renewable tariff with REGO certificates can remove Climate Change Levy.
Review lighting, heating controls, refrigeration, and overnight equipment use.

How is business energy different from domestic energy?

Business energy is not protected by the Ofgem domestic price cap. Businesses negotiate rates directly with suppliers, usually on 1-3 year fixed contracts. Business electricity is usually subject to 20% VAT and most businesses also pay the Climate Change Levy.

What is the Climate Change Levy?

The Climate Change Levy is a tax on energy supplied to business and public sector users. It is charged per kWh for electricity and gas, although qualifying renewable electricity tariffs with REGO certificates can be exempt.

When should I renew my business energy contract?

Start comparing deals around 6 months before your contract end date. If you do not renew or switch, many suppliers move businesses onto expensive deemed or out-of-contract rates.

About this calculator

The Business Energy Cost Calculator UK estimates business electricity and gas costs from kWh usage, unit rates, standing charges, VAT and billing period assumptions. It is for offices, shops, salons, cafes, restaurants, workshops, warehouses, clinics, and other businesses checking a renewal, broker quote, budget, or monthly energy forecast.

Business energy cost method

The calculator estimates usage cost by multiplying kWh by the relevant unit rate, adds daily standing charges for the billing period, and applies VAT or levy assumptions where the calculator includes them. Business contracts vary, so the result should be treated as a planning estimate.

electricity usage cost = electricity kWh x electricity unit rate
gas usage cost = gas kWh x gas unit rate
standing charges = daily standing charge x billing days
estimated bill = usage cost + standing charges + VAT or adjustments

How to use the business energy cost calculator

Enter electricity usage in kWh from bills or meter data.
Enter gas usage if the business uses gas.
Enter unit rates from the quote or current contract.
Enter standing charges for each fuel.
Set the billing period.
Include VAT or levy assumptions where relevant.
Compare total annual cost rather than only headline unit rates.

Worked examples

Small office electricity estimate

Input: 2,000 kWh/month at 28p/kWh plus 70p/day standing charge

Calculation: (2,000 x GBP 0.28) + (30 x GBP 0.70)

Result: Estimated electricity cost is GBP 581 before VAT or other adjustments.

Quote comparison

Input: Same annual kWh, quote A lower unit rate, quote B lower standing charge

Calculation: Model both quotes using the same usage and billing days

Result: The cheaper quote is the one with the lower total annual cost.

What to compare on a business quote

Business energy contracts are not the same as domestic tariffs. A low unit rate can be offset by high standing charges, broker costs, pass-through charges, or contract terms. Compare total annual cost using the same kWh assumptions.

Bill components

Item	Meaning	Why it matters
Unit rate	Price per kWh	Main driver for high-usage sites
Standing charge	Daily fixed charge	Important for low-usage or multiple meters
VAT	Tax added to bills	Treatment can vary by situation
Climate Change Levy	Business energy levy	May appear separately or within charges

Using historic bills

Use kWh from actual bills rather than pounds spent, because old bills may include credits, debt, refunds, previous rates, or estimated readings. Annual kWh is usually more reliable than one month for seasonal businesses.

Common mistakes and edge cases

Do not compare quotes using only the unit rate.
Do not forget standing charges or multiple meters.
Domestic price-cap logic does not apply to most business contracts.
Check VAT and Climate Change Levy treatment.
Ask how broker commission or fees are handled.

Limitations and cautions

This calculator is for general business planning only and is not financial, tax, legal, or energy procurement advice. Business tariffs, VAT, levies, contract terms, and supplier charges vary.

It does not fetch live supplier tariffs.
It does not model every pass-through charge.
It does not decide whether a broker quote is fair.

Frequently asked questions

How do I calculate business energy costs?

Multiply kWh by unit rates, add standing charges, then include VAT or other charges that apply.

Should I compare unit rate or total cost?

Compare total annual cost because standing charges and terms can change the result.

Does the domestic price cap apply?

No. Business energy contracts are different from domestic tariffs.

What kWh figure should I use?

Use annual kWh from bills, meter readings, or half-hourly data if available.

Why is my quote higher than the estimate?

It may include VAT, levies, broker costs, pass-through charges, or different usage assumptions.

Related calculators

electricity-cost-calculator
energy-bill-calculator
energy-direct-debit-calculator
business-carbon-footprint-calculator

What does this mean?

This calculator is designed to help you understand the likely number before you make a decision or start an application.

Your result should be checked against official UK guidance, especially if your circumstances include dependants, exemptions, prior leave, or a complex immigration history.

Treat the figure as a planning tool rather than legal advice. Where the answer affects an application deadline or major payment, speak to an authorised adviser.

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