Business Energy Costs UK 2025: How Much Are You Really Overpaying?

Here’s something that might surprise you: most small and medium UK businesses haven’t reviewed their energy costs in over 18 months – and energy suppliers are counting on exactly that.

While you’ve been focused on growing your business, energy suppliers have been quietly increasing rates and rolling businesses onto expensive default tariffs when contracts expire.

The reality? That “set it and forget it” approach to energy procurement could be costing your business hundreds or thousands of pounds annually. Money that could be better invested in your operations, your team, or your growth.

If you haven’t compared energy suppliers recently, there’s a good chance you could be paying less. Here’s what you need to know about current market rates and how to approach energy switching smartly.

Understanding UK Energy Costs for Small & Medium Businesses

Typical Annual Energy Spend by Business Size

Small Businesses (1-9 employees):

• Typical annual electricity costs: £2,000 – £4,500
• Typical annual gas costs: £1,200 – £2,800
• Total annual energy spend: £3,200 – £7,300

Medium Businesses (10-25 employees):

• Typical annual electricity costs: £4,500 – £12,000
• Typical annual gas costs: £2,500 – £6,500
• Total annual energy spend: £7,000 – £18,500

Energy Spend by Business Type:

Small Offices: £2,000 – £8,000 annually (depending on size and equipment) Retail Shops: £3,000 – £15,000 annually (lighting, refrigeration, heating) Restaurants/Cafes: £5,000 – £20,000 annually (kitchen equipment, heating) Small Warehouses: £4,000 – £18,000 annually (lighting, equipment) Service Businesses: £1,500 – £6,000 annually (mainly lighting and office equipment)

---

Signs Your Business Might Be Paying Too Much for Energy

1. You Haven’t Reviewed Your Energy Deal Recently

The Issue: Many suppliers automatically roll businesses onto more expensive tariffs when initial contracts expire.

What to Check: If you haven’t actively chosen your current energy deal in the past 2-3 years, it’s worth exploring what else is available in the market.

2. Your Energy Bills Keep Rising Despite Similar Usage

Red Flag: Your usage stays roughly the same, but costs keep climbing month after month.

What Might Be Happening: You could be on a variable tariff where suppliers can increase rates with notice. Many businesses prefer fixed-rate energy contracts for budget predictability.

3. High Standing Charges

Standing charges (daily connection fees) can vary between suppliers:

• Higher-cost options: £150-200/month in standing charges
• More competitive options: £80-120/month in standing charges

4. Automatic Renewal Offers

Common Scenario: Your supplier sends a renewal offer before your contract ends. While convenient, these rates may not be the most competitive available.

Better Approach: Compare market options before accepting any renewal to ensure you’re getting good value.

5. Complex Pricing Structures

Transparency Check: Can you easily find your exact cost per kWh on your bill? Clear, simple pricing often indicates more competitive deals.

Current Market Rates (approximate):

• Competitive electricity rates: 18-25p per kWh (varies by usage and contract length)
• Competitive gas rates: 4-8p per kWh (varies by usage and contract length)

6. Missing Bundle Opportunities

For Yellowcom Customers: If you already use Yellowcom for phone systems or broadband, bundling services can often provide better value and simplified billing.

---

The Real Cost of Different Business Energy Tariffs

Fixed-Rate Business Energy Contracts

How They Work: Lock in your energy prices for 1-5 years, providing cost certainty and budget predictability.

2025 Market Rates:

• 1-year fixed electricity: 19-23p per kWh
• 3-year fixed electricity: 21-26p per kWh
• 1-year fixed gas: 5-7p per kWh
• 3-year fixed gas: 6-8p per kWh

Best For: Businesses wanting predictable energy budgets and protection against price volatility.

Flexible Business Energy Contracts

How They Work: Rates fluctuate with wholesale energy markets, potentially offering savings when market prices fall.

Current Market Position: Flexible tariffs are 8-15% cheaper than fixed rates in early 2025, but carry risk of sudden price increases.

Best For: Energy-savvy businesses who monitor markets and can handle budget uncertainty.

Green Business Energy Options

Premium for Sustainability: Renewable energy tariffs typically cost 2-5% more than standard tariffs, but many businesses find the sustainability benefits worth the extra cost.

Government Incentives: Some green energy contracts qualify for enhanced capital allowances and carbon credit benefits.

Your Business Energy Switching Action Plan

Step 1: Calculate Your Current True Costs

Grab your last 12 months of energy bills and add up:

• Total electricity units (kWh) used
• Total gas units (kWh) used
• Total standing charges paid
• Any additional fees or charges

Quick Benchmark: If you’re paying more than 22p per kWh for electricity or 7p per kWh for gas, you’re likely overpaying.

Step 2: Get a Professional Market Comparison

Why DIY Doesn’t Work: Business energy comparison sites often show limited suppliers and don’t account for your specific usage patterns.

The Smart Approach: Get a free professional energy audit that analyses your actual usage and compares ALL available suppliers.

What You Get:

• Complete market analysis of 40+ suppliers
• Custom quotes based on your exact usage patterns
• Contract terms comparison and recommendations
• Projected savings calculations with multiple scenarios

Step 3: Time Your Switch Strategically

Contract Timing Matters:

• Best switching window: 3-4 months before your current contract ends
• Market timing: Energy prices are currently 15% lower than peak 2023 rates
• Seasonal advantage: January-March typically offers the most competitive rates

Avoid These Costly Mistakes:

• Never accept automatic renewals without comparison
• Don’t switch mid-contract unless paying exit fees is worth it
• Always read termination clauses before signing new contracts

---

Why Smart Businesses Choose Yellowcom for Energy Switching

More Than Just Energy – Complete Business Solutions

Unique Advantage: When you switch business energy with Yellowcom, you get access to our complete suite of business services:

Bundle Benefits:

• Business phone systems with energy discounts
• Business broadband integrated billing
• Single point of contact for all your business utilities and communications

Local UK & Ireland Support:

• Dedicated account managers in Belfast, Glasgow, and Dublin
• No call centers – speak directly to UK energy experts
• 24/7 support for urgent energy queries

Proven Track Record

Client Results:

• Average savings: 23% on total energy costs
• Switching success rate: 97% completion without service interruption
• Client satisfaction: 4.8/5 average rating
• Combined service discounts: Up to 15% when bundling utilities and communications

---

Stop Overpaying – Get Your Free Energy Audit Today

The Cost of Waiting: Every month you delay switching could be costing you £200-800+ in unnecessary energy charges.

Your Free Business Energy Audit Includes:

• ✅ Complete usage analysis of your last 12 months
• ✅ Market comparison across 40+ UK energy suppliers
• ✅ Potential savings calculation with different contract options
• ✅ Green energy options assessment and pricing
• ✅ Bundle discount opportunities with your existing Yellowcom services
• ✅ Zero obligation – get informed before you decide

Ready to discover how much you could save?

Get Your Free Business Energy Audit →

Or speak directly to our UK energy specialists:

📞 UK: 03330 156 651
📞 Ireland: 01263 5299
📧 energy@yellowcom.co.uk

Don’t let energy suppliers profit from your loyalty. Switch smart and start saving today.