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Here is an uncomfortable truth about running a business in Britain. The people who quietly overpay for gas, electricity and water are rarely the ones who picked a bad supplier. They are the ones who were never told how the contracts actually work. Business utilities play by a completely different rulebook to the tariffs you have at home, and nobody hands you that rulebook when you sign the lease.
So treat this as your rulebook. By the end you will understand how each utility is priced, when you are genuinely allowed to switch, and the small handful of mistakes that keep money leaking quietly out of otherwise well run businesses.
At home, life is gentle. Your energy price is capped, you can switch more or less whenever the mood takes you, and gas and electricity usually arrive bundled together on one friendly tariff. Business utilities throw all of that out of the window.
Business contracts are fixed for a set number of years, and you generally cannot walk away in the middle of one. There is no price cap watching your back, so what you pay comes down entirely to the deal you agreed and, crucially, the day you agreed it. Gas and electricity are almost always bought as two separate contracts rather than a tidy dual fuel package. And if you do nothing when a contract ends, you do not keep your old rate as a reward for loyalty. You get moved onto a far more expensive default rate instead. More on that little trap shortly.
Every electricity price is built from two numbers, and the supplier is quietly hoping you only look at one of them.
The unit rate is the price of each unit of electricity you use, shown in pence per kWh. The standing charge is a flat daily fee you pay simply to keep the supply connected, whether you use a single kilowatt or none at all. A headline unit rate can look wonderful while a bloated standing charge quietly undoes all the good work behind the scenes. Always weigh the two together.
You will meet four of these in the wild:
The entire game is simple to state and easy to forget: always be on a fixed deal you actually chose, and never drift onto a deemed or out of contract rate by accident.
Gas follows the same logic as electricity. A unit rate per kWh, a daily standing charge, and a fixed term contract wrapped around them. The wrinkle is that gas prices tend to react more dramatically to the wider market, so when you choose to lock in your rate matters even more than it does with electricity.
Two extra costs also show up on business energy bills that your home account never worries about: VAT, usually charged at twenty percent, and the Climate Change Levy, a government tax on the energy your business burns through. Some low usage businesses and charities qualify for reduced VAT, so it is well worth checking whether yours is one of them.
Ask a room full of business owners when they last compared their water supplier and you will be met with blank faces. That is not laziness. For most of living memory, you simply could not.
Since April 2017 in England, and earlier still in Scotland, the business water market has been open to competition. You cannot change the pipes or the water itself, which still comes from your regional wholesaler, but you can absolutely change your retailer: the company that bills you, reads your meter and answers the phone when something goes wrong.
Switching retailer can win you better service, a single tidy bill across several sites, and water efficiency reviews that trim how much you use before the bill is even calculated. It is one of the most overlooked savings in the whole building, precisely because so few owners realise the door is unlocked.
If you remember nothing else, remember this. Never let a contract slip into an out of contract or deemed rate. That quiet gap is where businesses lose the most money, without ever seeing a dramatic price rise to warn them.
Aim to line up your new contract inside the renewal window, before the current one runs out. With business energy you can often agree a new deal to begin up to roughly twelve months in advance, then simply let it take over the moment the old one ends. No gap, no drift, no nasty default rate.
Compare Commercial pulls business gas, electricity and water into one place, so you can review all three without chasing suppliers one at a time. Instead of hunting through old bills and bracing yourself for a round of cold calls, you answer a few quick questions and see how your current setup stacks up in about a minute. If you could be overpaying, you will know, and just as importantly you will know what to do next.
Usually not in the middle of a contract. Business energy is fixed term, so you normally switch during your renewal window, shortly before the current deal ends. Trying to leave partway through a fixed term tends to mean exit fees, or is not allowed at all, which is exactly why knowing your end date is so valuable.
Yes. Since April 2017 in England, and earlier in Scotland, businesses have been free to choose their water retailer. You do not change the supply itself, but you can change the company that bills you, reads your meter and manages your account.
It is the default rate you are charged when no active contract is in place, for instance after moving into new premises, or when a fixed deal ends and you have not renewed. These rates are typically the most expensive on offer, which is why staying on a contract you chose matters so much.
It is priced differently rather than simply cheaper. Business unit rates can be lower, but there is no price cap, and bills carry VAT and the Climate Change Levy. What you actually pay depends heavily on your usage and the deal you managed to lock in.
Most fixed term deals last between one and five years. A longer term hands you price certainty, a shorter one keeps you flexible. The right choice comes down to how much you value certainty against the freedom to move.
No. You can compare directly using your bills and a comparison service. A broker can save you time, but always understand how they are paid, so you can judge whether the deal in front of you is truly the best one for your business rather than for them.