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The standing charge is the part of your energy bill you pay whether you use any energy or not, and it is the line most businesses ignore. Two deals with the same unit rate can cost very different amounts once the standing charge is counted. This guide explains what the standing charge is, why it varies, and how to weigh it when you compare.
In short. A standing charge is a fixed daily fee for keeping your supply connected, charged every day regardless of usage. It covers the cost of the network, meters and keeping you supplied, and it varies by region, meter type and supplier. A low unit rate paired with a high standing charge can still be a poor deal, so always read the two together.
The standing charge is a daily fixed cost, shown in pence per day, that you pay simply for having an active connection. It is not supplier profit so much as the cost of keeping you connected to the network.
It covers a share of maintaining the cables and pipes that deliver your energy, the cost of your meter and its readings, and the administration of your account. Because these costs exist whether you use a lot of energy or none, they sit in a fixed daily charge rather than in the unit rate.
Standing charges are not the same everywhere, and the differences are often larger than businesses expect.
Region. Network costs vary across the country, so the same supplier can charge different standing charges depending on where your premises are.
Meter type. Larger supplies and half hourly meters carry more network and capacity related costs, so their standing charges tend to be higher.
Supplier and deal. Suppliers structure deals differently, some loading more cost into the standing charge and less into the unit rate, or the other way around.
That last point is the important one for comparing, because it means two deals can look very different at first glance yet cost almost the same, or look similar yet cost quite differently.
Suppliers know the unit rate is the number businesses focus on, so a deal can advertise a low unit rate while quietly carrying a high standing charge to make up for it.
✓ Always read the unit rate and standing charge together, against your actual usage.
✓ Remember the standing charge is paid every day of the year, including days you are closed.
✓ Compare the total annual cost of a deal, not just the headline unit rate.
✗ Choosing a deal on the lowest unit rate alone, ignoring a high standing charge.
✗ Assuming a low usage business is unaffected, when the fixed daily charge matters most when usage is small.
Here is the counterintuitive part. The less energy you use, the more the standing charge matters as a share of your bill. A high usage site spreads the fixed daily charge across a lot of units, so it barely moves the effective cost. A low usage site, such as a small office or a lock up, pays that same fixed charge across few units, so it can dominate the bill. If your usage is low, the standing charge deserves as much attention as the unit rate, if not more.
Take a 55 pence daily electricity standing charge. Across a year that is around 200 pounds before you use a single unit, and gas adds its own on top. Now compare two deals with the same unit rate, one with a 30 pence standing charge and one with a 60 pence charge. The difference is around 110 pounds a year on the standing charge alone, entirely hidden if you only look at the unit rate. For a low usage business, that gap can be a large part of the whole bill.
When you compare energy deals, never judge them on the unit rate alone. Add the standing charge across a full year and look at the total. A slightly higher unit rate with a much lower standing charge is often the cheaper deal, especially if your usage is modest.
Find your standing charge. It is on your bill in pence per day, separate from the unit rate.
Annualise it. Multiply by 365 to see what you pay each year before any usage, then do the same for both gas and electricity.
Compare on the total. When you get quotes, add the standing charge and unit costs together across a year, so you compare like for like.
Weight it by your usage. If your usage is low, treat the standing charge as a priority in your comparison, not an afterthought.
A fixed daily fee for keeping your energy supply connected, charged every day regardless of how much energy you use. It covers network, metering and account costs.
It depends on your region, meter type and the way your supplier structures the deal. Larger and half hourly supplies, and some regions, carry higher standing charges.
Rarely. A few zero standing charge deals exist but usually carry a higher unit rate, so they only suit very high usage sites. For most businesses the charge is unavoidable.
Yes, more than ever. For a low usage business the fixed daily charge is a bigger share of the bill, so it deserves close attention when you compare.
Add the standing charge and unit costs together across a full year for each deal, and compare the totals rather than the headline unit rate alone.
Usually only for very high usage sites, because zero standing charge deals tend to carry a higher unit rate. For most businesses a normal standing charge with a lower unit rate works out cheaper overall.