Understanding Your Business Energy Bill
A plain-English guide to every charge on your hospitality business energy bill. No jargon, no confusion.
Unit Rate (p/kWh)
This is the price you pay per unit (kilowatt-hour) of electricity or gas you use. It's the biggest factor in your total bill. For hospitality businesses, this typically ranges from 25-35p/kWh for electricity and 6-12p/kWh for gas. If your unit rate is significantly above these ranges, you may be on an out-of-contract rate.
Tip: Compare your unit rate with our Bill Checker tool to see if you're overpaying.
Standing Charge (p/day)
A fixed daily charge you pay regardless of how much energy you use. It covers the cost of maintaining your connection to the grid. Standing charges for business premises typically range from 25-60p per day, adding £90-£220 per year.
Tip: Some tariffs have lower standing charges but higher unit rates (or vice versa). For high-consumption hospitality businesses, a lower unit rate is usually more important.
Climate Change Levy (CCL)
A government tax on energy used by businesses. It's added to your bill at a fixed rate per kWh. Currently around 0.775p/kWh for electricity and 0.672p/kWh for gas. Charities and very small businesses may be exempt or eligible for a reduced rate.
Tip: You can't avoid CCL, but it's worth checking you're paying the correct rate — some businesses qualify for reduced CCL through Climate Change Agreements.
VAT
Business energy is subject to 20% VAT (standard rate). Some businesses with very low energy use (below a threshold) may qualify for the reduced 5% rate, but most hospitality businesses use too much to qualify.
Tip: If your hospitality business also uses energy for domestic purposes (e.g., a flat above a pub), you may be able to split the supply and get the domestic portion at 5% VAT.
Deemed/Out-of-Contract Rate
If your fixed-term contract has ended and you haven't renewed, your supplier will move you to their 'deemed' or 'out-of-contract' rate. This is ALWAYS more expensive — typically 40-60% higher than a negotiated tariff. This is the single biggest reason hospitality businesses overpay for energy.
Tip: Check your contract end date immediately. If it's passed, you're likely overpaying right now. Contact us for a free comparison.
Maximum Demand (kVA)
For businesses with larger supplies (typically 100+ amp), you may see a 'maximum demand' or 'capacity charge'. This is based on the peak amount of power your business draws at any one time, measured in kilovolt-amperes (kVA).
Tip: You can reduce peak demand charges by staggering equipment start-up times — e.g., don't turn on all fryers, ovens, and the extraction system at exactly the same time.
Meter Type (NHH vs HH)
NHH (Non-Half-Hourly) meters record total usage and are read periodically. HH (Half-Hourly) meters record usage every 30 minutes and are usually required for businesses using more than 100,000 kWh/year. Most takeaways and cafés have NHH meters; larger restaurants and hotels often have HH meters.
Tip: If you have a half-hourly meter, you can potentially save money with time-of-use tariffs that offer cheaper rates during off-peak periods.
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