If you run a large business, your energy consumption will be far higher than that of a small and medium-sized enterprise (SME), which means you’ll want to ensure you’re on the best possible energy deal.
What is classed as a large or industrial business?
Your business will be classed as a large or industrial operation if it uses more than 55,000 kWh of electricity a year, or more than 200,000 kWh of gas a year.
In other words, your business will be using a lot of energy on an annual basis, which means it’s vital to check you’re not paying more for your energy bills than you should be. If you haven’t switched energy supplier for several years, you could be overpaying for your energy bills by thousands of pounds a year.
How much your business pays for its energy will depend on factors such as the location of your business, the size of your premises, how many people you employ and how energy efficient your business is. The cost may also depend on the type of energy meter you have.
Does my business need a half-hourly meter?
Large businesses that use 100kW or more of electricity every 30 minutes, such as warehouses, factories, or large offices, are required by law to have a half-hourly (HH) meter fitted.
This type of meter automatically sends data to your supplier on a half-hourly basis, so you don’t need to record your energy usage or update your supplier yourself. This has the advantage of ensuring your bills are based on accurate readings, not estimates.
If your business uses 70kW or more of electricity every half hour, you can also choose to have a HH meter fitted if you wish to.
When moving into a new business premises, you should always check whether it already has a half-hourly meter fitted – you can do this by checking the ‘S number’ on a previous bill. If the number in the top left-hand box is 00, you have a half-hourly meter.
If your business doesn’t need a HH meter fitted, you may want to consider having a smart meter installed instead. Smart meters can help you to better monitor your business energy use and ensure your bills are based on the regular readings automatically sent to your supplier.
All UK businesses (and households) must be offered a smart meter by the end of June 2025 – this date has been extended by six months due to a freeze in installations during the Covid-19 lockdown.
Does my business need a multi-site contract?
If you have more than one business premises, managing different energy contracts can be a challenge, which is why it can pay to switch to a multi-site contract.
Multi-site contracts allow you to combine all of your business energy tariffs into one package with the one supplier. All of your contracts will have the same end-date as a result, making them easier to manage and you will also often save money as a bulk purchaser.
How can my business get the best energy deal?
When comparing energy deals, you’ll come across a number of different contract types and it’s important to choose the one that matches your business needs best. These include:
Fixed rate contracts
With a fixed rate contract, the unit price of gas and electricity is fixed for a set term – often between one and five years. Longer term contracts tend to be more expensive because you’ll be protected from price rises for a longer period of time.
Be aware that fixed contracts often carry high exit fees should you need to leave your deal early, or you may not even be permitted to cancel your contract before its end-date.
Variable rate contracts
The rate you pay for your energy will change depending on fluctuations on the wholesale energy market. This means your bills could go up, but should wholesale prices fall, your energy bills could also come down – something a fixed contract cannot offer.
Interruptible contracts
Large or industrial businesses may also have the option of taking out an interruptible contract. This offers a reduction on your unit rate in return for giving the National Grid or your local distributor permission to cut off your electricity supply during peak times or periods of high demand, to ease pressure on the network. Obviously, this means this type of contract won’t be suitable if you carry out a lot of business during peak hours.
Pass-through contracts
Pass-through energy contracts are becoming more common and allow you to fix certain parts of your contract, including the wholesale cost. For costs such as transmission and distribution charges, you will only pay the rate your supplier is charged – but note that charges are variable so can change regularly.
Large site peak day demand contracts
With this type of contract, the amount of gas and electricity your business receives from any one supply point used by the National Grid or your local distributor will be limited each day. Also known as Supply Offtake Quantity (SOQ) or Maximum Daily Quantity (MDQ), you may be charged high penalties for going over your daily limit.
