Average business energy consumption - How much does your business use?

Understanding business energy usage is a good way to stay on top of your utility bills. Whether you’re a startup or an established SME, knowing how your gas and electricity consumption measures up to that of similar businesses can help you work out whether you're using too much and where to cut costs. 

Let's take a closer look at how much energy UK businesses typically use, what affects consumption, and practical steps to help your business save money and hit sustainability targets.

What is the average energy consumption for UK businesses?

Business energy consumption is the amount of electricity and gas used by a business to power its operations. Measured in kilowatt hours (kWh), average usage is usually shown as an annual amount.

In the UK, consumption varies widely depending on business size, sector, and working habits. Here are the current UK averages by business size, as defined by Ofgem, the energy regulator:

• Microbusinesses: Usually under 10,000 kWh of gas and up to 15,000 kWh of electricity annually
• Small businesses: Around 25,000 kWh of gas and up to 25,000 kWh of electricity per year
• Medium businesses: Roughly 45,000 kWh of gas and up to 50,000 kWh of electricity annually
• Large businesses: More than 65,000 kWh of gas and over 50,000 kWh of electricity per year

What influences business energy usage?

The amount of energy your business uses is influenced by many things, some of which you may not have considered. Here are some of the key drivers:

• Business type and size: A manufacturing plant uses far more energy than a small office
• Operating hours: Longer or 24/7 operations mean higher energy use
• Employee habits: Staff switching off equipment and lights can make a real difference
• Equipment efficiency: Old, inefficient equipment can be a drain on energy
• Location and climate: Heating and cooling needs can spike costs, especially in harsher climates.

Why do average usage and costs matter?

Energy costs can make up a significant amount of your business's outgoings. Understanding average usage can help set benchmarks for comparison. Prices have been fairly stable across 2025 but are still higher than pre-pandemic rates. 

Fixing your rates helps protect your business from price volatility. Knowing how much energy you use is important to help secure the right type of contract and rates for your business.

How does a business energy bill break down?

The amount you spend on business energy depends on your consumption and the tariff you’re on. Here’s what to look out for on your bills:

• Unit cost: The amount you pay per kWh used
• Standing charge: Daily supply cost for your premises, billed regardless of usage

Choosing between fixed-rate and variable-rate tariffs affects what you pay each month. With a fixed rate, the price per kWh stays the same for the length of your contract, although your total bill will fluctuate with usage. Variable-rate deals track the market, so rates can rise or fall, not ideal if you're after bill stability.

How much is a typical business energy bill?

Costs reflect usage and region, but we've crunched the numbers to give you an average bill size for 2025, based on business size and average usage. 

For small businesses, the average annual electricity bill clocks in at £2,890 and gas at £950. Microbusinesses pay significantly less, while medium and large operations can expect annual costs exceeding £5,500 and £10,000 for electricity, respectively. Location matters too: London boasts lower unit prices than Merseyside, for example.

Estimated average 20205 annual electricity costs by business size

Business Size	Estimated average bill
Micro (10,000 kWh)	£2,723 a year
Small (20,000 kWh)	£5,579 a year
Medium (40,000 kWh)	£11,226 a year
Large (55,000 kWh +)	£13,492 a year

Estimated average 20205 annual gas costs by business size

Business Size	Estimated average bill
Micro (10,000 kWh)	£914 a year
Small (22,500 kWh)	£1,805 a year
Medium (47,500 kWh)	£3,672 a year
Large (65,000 kWh +)	£5,417 a year

^{Note: Prices are correct as of September 2025. Rates and bill size may vary according to your meter type and business location. The prices you’re quoted may be different from the averages shown. The figures shown are the average unit rates and standing charges quoted by Bionic per business size from January 1 to September 8, 2025.}

Why is business energy so expensive?

Unlike household energy, there’s no price cap for business users, and VAT is usually charged at 20% rather than 5% (though a reduced 5% rate is available in certain circumstances). If your business is VAT registered, any VAT you pay can be claimed back, just like any other business expense.

Regional differences in supply and standing charge rates can also play a part - two businesses in neighbouring counties could pay different prices for identical usage. Fluctuating wholesale costs and government levies also add to costs, so staying on top of contract end dates and shopping around for deals is crucial.

And although energy prices have dropped significantly since the 2022 price spike, they've remained higher than pre-pandemic levels.

How to cut your business energy usage

Improving energy efficiency is a good way to cut your usage and reduce your bills. Popular steps include:

• Conducting a business energy audit to spot inefficiency
• Switching to energy-efficient lighting, heating and appliances
• Encouraging green working habits among staff (switching off devices, reducing heating/cooling demand)
• Installing smart meters for accurate, real-time tracking
• Comparing suppliers to find the best rates

A few small changes add up to big savings over time. Check out our guide to business energy efficiency for more ideas.

How to find out your business energy usage

If you don’t know your business’s annual consumption, take these steps:

• Check your most recent energy bill – it will show annual usage in kWh
• Use your meter readings and supply dates to calculate yearly use
• Ask your energy supplier or broker for a usage statement

According to Ofgem figures, 90% of businesses now track their energy consumption, with smart meters particularly popular. The rollout of Market-wide Half-Hourly Settlement (MHHS) should help to encourage more business owners to check their usage.

Energy efficiency is about more than saving money

Reducing your energy use isn’t just about lowering costs – it’s also about your business hitting sustainability targets. 

A study from The British Standards Institution (BSI) has found that around one third (36%) of British businesses claim to have this year they have set targets to achieve net zero. This is a significant drop from the 58% who said they had done so last year, but also found that most businesses (83%) still want to take action and would like support to do so.

If you've not set energy efficiency targets at your business, then it's something worth considering. Not only can being more energy efficient help you save money, but it can also improve customer perceptions of your business. Most consumers (92%) say they trust brands that are socially responsible or environmentally friendly, and 55% are willing to pay more for eco-friendly brands.

Quick tips to help lower your business energy bills

Making small changes can go a long way to lowering your energy usage. Try out some of the ideas below to see if they can help cut your energy usage and lower your bills:

• Switch devices off when not in use
• Invest in LED lighting and modern heating controls
• Compare fixed and variable tariffs – and switch suppliers regularly
• Explore renewable energy options (on-site solar, wind, etc.)
• Regularly review contracts to avoid rolling onto higher out-of-contract rates

Knowing how much energy your business uses and taking steps to cut consumption are great ways to control costs, especially when paired with comparing energy suppliers to find the best rates. 

With ongoing volatility in energy pricing and growing pressures to ‘go green’, now is the time to get savvy about your business’s energy footprint.

For more detailed comparisons and ways to switch, run a business energy comparison with MoneySuperMarket.