If your business energy bill has jumped and you have not changed how you work, you are not imagining it. Business energy is priced differently from the energy in your home, and the number at the bottom is the total of several different costs, some of which you can influence and some of which you cannot.
This guide breaks the bill into its parts, explains the usual reasons a bill rises, and gives you a short list of things to check. We are an introducer, not an adviser, so we will not tell you what to do. We will tell you what the regulator says, so you can decide for yourself.
The short version
- A business bill is usually made up of the cost of the energy itself, network costs, environmental costs, taxes and supplier operating costs.
- Ofgem says wholesale energy can typically be about 40% of an electricity bill and about 60% of a gas bill, though the exact share varies.
- There is no price cap on business energy, so your rate depends on your contract, your supplier and when you bought.
- Being on a deemed or out-of-contract rate is one of the most common reasons a bill is higher than it needs to be.
- Estimated readings, a wrong meter or a billing error can also inflate a bill. They are worth checking before you assume the price is the problem.
What is actually inside a business energy bill
Most people look at two numbers: the rate per unit and the total. Underneath, Ofgem describes the price you pay for business energy as covering a range of costs: the wholesale energy cost (the cost to buy the energy), network costs (the infrastructure that moves it to you) and environmental costs (government decarbonisation schemes).
Ofgem has also published a best practice guide for suppliers on how to explain non-domestic bills. It groups the costs that sit on top of the energy itself into five "buckets". That is a useful way to read your own bill, because it tells you where to look:
| Bucket | What it covers (Ofgem wording, simplified) |
|---|---|
| Network and metering charges | The cost of operating and managing the gas and electricity grid, including connection, transmission and distribution charges |
| Environmental and social obligations | Government schemes and levies that fund environmental initiatives |
| Third-party service fees | Where they apply, fees for energy broker services that are paid through your energy bill |
| Tax | VAT and Climate Change Levy, shown as separate items on the bill |
| Operating charges of supply | Supplier costs such as bad debt, risk premiums, operating and metering costs |
Ofgem says suppliers should explain what proportion of each bucket makes up the unit rate and the standing charge. In practice, how clearly this is done varies, which is why it pays to read the small print as well as the total.
The unit rate and the standing charge
Your bill will normally show a standing charge (a fixed amount, often per day, that you pay however much you use) and a unit rate (the price for each kilowatt hour). Citizens Advice points out that both are shown on your bill and that you should check them, along with your contract end date and your annual usage, when you compare options. We cover standing charges in more detail in our guide to standing charges.
How much of the bill is the energy itself?
In a blog published on 31 March 2026, Ofgem said that wholesale costs can typically be about 40% of your electricity bill and about 60% of your gas bill, with exact percentages varying. It also said network costs were increasing in April to pay for infrastructure upgrades, and that wholesale costs are volatile.
Source: Ofgem blog, 31 March 2026. Ofgem describes these as typical figures; yours will differ by supplier, contract and business type.
Two things follow from that. First, even if wholesale prices are flat, other parts of the bill can move. Second, when wholesale prices move, the effect on your bill depends on whether your price is fixed. A fixed-rate contract fixes the unit rates and standing charges for its length, so the cost per kilowatt hour stays the same whatever the wholesale market does. A variable rate can go up or down.
The most common reasons a business bill goes up
1. Your contract ended and you did not choose what came next
Ofgem says deemed rates and out-of-contract rates are usually more expensive than negotiated fixed-term rates. You can land on a deemed rate when you move into new premises without arranging a contract, or when an old contract expires and does not say what happens next. Out-of-contract rates apply when your contract does say what happens at the end. Rollover (evergreen) contracts can also renew automatically for a fixed term, usually 12 months, and may be on a higher rate. Our guide to deemed and out-of-contract rates goes deeper.
2. You renewed at a new market price
If a fixed price contract ends, Ofgem says you will need to negotiate a new one. The new price reflects the market today, not the market when you signed. If you signed when prices were lower, the renewal can look like a jump even though nothing about your usage changed. The renewal letter guide shows what your supplier must tell you.
3. Network and other non-energy costs moved
Ofgem said in March 2026 that network costs were rising in April. Depending on how your contract treats these costs, they can show up on your bill. Check your contract for any clause that lets the supplier change the rate during the term. Ofgem notes that some contracts include conditions allowing this, so reading the terms matters.
4. Your usage went up (or looks like it did)
Ofgem tells businesses to submit regular meter readings or get a smart meter so they only pay for what they use. If the bill is based on estimates, a later correction can arrive as a larger bill. Ofgem’s billing guide says bills should show whether readings are estimated or actual.
5. A billing or set-up error
Wrong meter details, the wrong tariff, a missed change of tenancy or VAT charged at the wrong rate can all inflate a bill. Ofgem’s best practice guide notes that tax can vary quite significantly between customers. We cover VAT and Climate Change Levy separately.
Why your neighbour’s bill looks different to yours
Ofgem says the price you pay for business energy can vary across suppliers and across the type and size of your business. Your contract type, its length, the date it was priced, your meter type, your region (network charges vary by area) and your usage pattern all play a part. Ofgem also says contract lengths are starting to return to three to five years, so two similar businesses can be on prices set years apart.
Business size matters for protections too. Ofgem defines a microbusiness as one with fewer than 10 employees and an annual turnover or balance sheet total of no more than £2 million, or one that uses up to 100,000 kWh of electricity or 293,000 kWh of gas a year. Microbusinesses get extra protections, such as clear contract information and renewal price information before the contract ends. If you are not sure which group you are in, Citizens Advice can help you check.
A five-minute bill check
You do not need to be an energy expert to spot the usual problems. Get your latest bill and work through this list:
- Find your contract end date. If it has passed, ask which rate you are on now.
- Check the rate type. Fixed, variable, deemed, out-of-contract or rollover all behave differently.
- Look at the readings. Are they marked as actual or estimated? Does the reading match your meter?
- Compare the standing charge and unit rate with your last bill and with any renewal letter.
- Check the tax lines. VAT and Climate Change Levy should appear as separate items.
- Look for fees. Any third-party service fee for a broker should be itemised. Ofgem says your supplier must give you details of any service fees in the bill if you ask.
If something looks wrong, speak to your supplier first. Ofgem says suppliers must treat you fairly and bill you accurately based on your meter readings. If you are a micro or small business and you cannot resolve a dispute, the Energy Ombudsman is the route Ofgem points to.
What you can do about a high bill
This is a list of options, not a recommendation. Which one suits you depends on your contract and your business.
- Ask your supplier what contracts are available now. Ofgem says to consider both short-term and long-term options, and notes it may sometimes be better to stay temporarily on deemed or out-of-contract rates if longer-term offers are high.
- Compare the market. You can contact suppliers directly, use a comparison website, or use a broker or introducer. Citizens Advice suggests comparing as many suppliers as you can and asking for the full terms in writing.
- Get a smart meter or send regular readings so bills reflect real use.
- Look at usage. Ofgem lists energy efficiency grants and schemes for businesses; our energy efficiency page is a starting point.
- Keep your supplier informed. Ofgem says to keep contact details up to date so bills reach you, and to talk to your supplier early if you are struggling to pay.
Be aware of two things Ofgem flags. Suppliers may ask for security deposits, and they are not obliged to offer businesses a contract. And there is no cooling-off period once you agree a contract, even by phone, so ask for the terms in writing first.
Frequently asked questions
Why has my business energy bill gone up when I use the same amount?
Your bill covers wholesale energy, network, environmental, tax and supplier costs. Any of these can change, and a new contract is priced at the market of the day. Ofgem also says network costs were rising in April 2026. Check your contract end date and rate type first.
Is there a price cap on business energy?
No. The household price cap does not apply to business contracts. Your price depends on your contract, your supplier and when the price was set.
What percentage of my bill is the cost of the energy itself?
Ofgem says wholesale costs can typically be about 40% of an electricity bill and about 60% of a gas bill, though exact percentages vary.
What is a standing charge?
A fixed charge, often a daily amount, that you pay whatever you use. It sits alongside the unit rate, which is the price per kilowatt hour.
Why is my bill higher after my contract ended?
Ofgem says deemed rates and out-of-contract rates are usually more expensive than fixed-term rates. A rollover contract may also renew for a fixed term, usually 12 months, possibly at a higher rate.
Can estimated readings make my bill too high?
They can, and a later correction can arrive as a bigger bill. Ofgem advises submitting regular readings or getting a smart meter so you pay for what you use.
Where do VAT and Climate Change Levy appear?
They are tax costs and should be shown as separate lines. The Climate Change Levy main rate for electricity is 0.801p per kWh from 1 April 2026, according to GOV.UK.
Can I switch to a cheaper supplier mid-contract?
Ofgem says most suppliers will not let you switch before the end of a fixed-rate contract unless a termination clause applies or you pay an exit fee. Out-of-contract, deemed and evergreen rates are different: you can usually switch at any time.
Who can I complain to if my supplier bills me wrongly?
Speak to your supplier first. Ofgem says micro and small businesses can then take an unresolved complaint to the Energy Ombudsman.
How can I see my options without committing to anything?
You can contact suppliers directly, use a comparison service, or send your bill to an introducer such as us. Ofgem says there is no cooling-off period after you agree a contract, so only agree once you have seen the terms in writing.
Want to see your options with your own bill?
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Send us your latest billWhere this comes from
- Ofgem blog: Managing business energy costs in an uncertain market (31 March 2026)
- Ofgem: Best Practice Guide, Non-Domestic Billing Transparency (PDF)
- Ofgem: Get a business energy contract
- Ofgem: Set up a business energy contract
- Citizens Advice: Switching your business to a new energy supplier
- GOV.UK: Climate Change Levy rates
This article is general information, not energy advice. Business Energy Solutions is an introducer: we do not give advice or recommendations. Check your own contract and bill for the details that apply to you. Facts were checked against the sources above in October 2026; rules and rates change, so check the latest before you act.