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Energy Market Focus

Nationwide Energy Consultants 

What You Need To Know About business electricity prices in 2021

We help countless businesses each year reduce their business electricity bills.

Our free impartial service allows you to find the most competitive tariffs on the market, suited to your business.

Information on price trends courtesy of Haven Power and Ofgem

A kilowatt hour (kWh) is the name given to a unit of energy and is the standard unit used by energy suppliers to calculate gas and electricity bills.

The kWh lets you know how much electricity your business is using and how much you’re paying for it. This is calculated on a price per kWh basis. 1 kWh would approximately equate to using a desktop computer for 3 hours or boiling a kettle 10 times.

What does ‘kWh’ mean?

What are the other costs involved in my electricity bill?

On top of your kWh per hour price, most energy contracts will have a standing charge which is paid at a daily rate. Businesses will pay the standing charge regardless of how much energy they have used that day.

There are also taxation costs to factor in when calculating your overall business electricity bills. Businesses pay VAT at the current rate of 20%, whereas residential customers pay a reduced rate of 5%. A business is also subject to additional green taxes such as the Climate Change Levy (CCL).

If you’re thinking of switching business energy supplier, it’s best to compare your annual bill rather than the absolute rates from any quote you receive.

Even if you find an energy tariff with a cheaper electricity price per kWh, there may be a higher standing charge to pay. Use your past year’s consumption data as a guide when comparing prices from one supplier to the next.

Unless indicated gas, coal, electricity and carbon pricing information is sourced from Drax Power.

This is the base energy cost, and whilst up from a year ago it is still low.

The ‘baseload’ rate refers to a contract for electricity that is produced continually throughout the day and is distinct from ‘peak rates’ when electricity is bought/sold for consumption at peak times (7am to 7pm).

In 2020, a reduction in demand due to Covid-19 pushed down prices, although prices started to recover mid-year due to high demand and then colder weather in winter. Also, carbon prices reached new highs nearing the end of 2020 which also influenced power prices. 

In January 2021, power prices spiked to an all-time high due of 147 mWh to a combination of low renewable generation, below seasonal normal temperatures and tight system margins. 



Find the Cheapest Business Electricity Quotes Today

If you’re approaching the renewal window of your business electricity contract, it’s important to compare energy suppliers to find the cheapest quotes.

We can offer a market review and present your business with options without obligation.

kWh FAQ Section

What is a good price for electricity per kWh?

The average price businesses and residential customers pay in the UK is 18p per kilowatt-hour and 27p per day. A 3-bedroom house consumes 3,000kWh per year and a small business 20,000kWh per year.

Who has the cheapest electricity per kWh?

Your unit cost per kWh depends on your region, consumption and meter type. Most commercial electricity suppliers offer prices between 17p per kWh to 19p per kWh. Compare prices to check the cheapest in your area.

Are business electricity rates cheaper than domestic?

The unit price and standing charges are broadly the same for business and domestic (or residential) customers. Businesses pay additional green taxes, including the Climate Change Levy at 0.847p/ kWh from 1st April 2019.

How much is 1 kw of electricity in the UK?

A 1 kw appliance uses 1,000 watts of power in one hour or 1 kilowatt-hour. The average price is 18p per kilowatt-hour so that is the cost for using a 1 kw appliance for one hour.