Business energy is the gas and electricity your company buys to run its premises — and for most UK businesses it's one of the largest controllable overheads on the books. Yet it's also the one most owners understand the least, because the contracts, tariffs and bills are wrapped in jargon that the big suppliers have never been in a hurry to untangle.

This guide fixes that. By the end you'll know exactly how business energy pricing works, what every line on your bill means, the difference between each type of contract, how switching works, and the practical levers that bring the cost down. No fluff, no sales spin — just the clear picture we wish every business owner had before they signed.

What is business energy — and how is it different from domestic?

Business energy and domestic energy are bought in fundamentally different ways. A household can switch in minutes and walk away whenever it likes. A business is treated as a commercial customer, and that changes almost everything about the deal you get.

The key differences worth knowing:

• Separate gas and electricity contracts. Unlike a domestic dual-fuel deal, business gas and business electricity are almost always supplied on two separate contracts, often with different start and end dates.
• Fixed contract terms. Business contracts run for a set period — typically one to five years — and you generally cannot leave mid-term without a valid reason. This makes choosing the right contract, at the right time, far more important.
• Bespoke pricing. There are no published "best buy" tables for business. Suppliers quote a rate based on your location, your consumption, your meter type and the day you ask. The same business can be quoted very different prices by the same supplier in the same week.
• No price cap. The energy price cap you hear about in the news protects households only. Business energy isn't capped, which is exactly why shopping the market matters so much.

Because business deals are bespoke and time-sensitive, the price you're offered depends heavily on when and how you buy — and that's the first place savings are won or lost.

How business energy pricing actually works

Strip away the jargon and almost every business energy bill is built from just two charges.

1. The unit rate (pence per kWh)

This is the price you pay for each unit of energy you actually use, measured in pence per kilowatt-hour (p/kWh). Use more, pay more. Your electricity and gas will each have their own unit rate, and electricity is always the more expensive of the two per unit.

2. The standing charge (pence per day)

A fixed daily fee you pay simply to be connected to the network — charged every day, whether you use any energy or not. It covers the cost of maintaining the pipes, wires and meters that keep you supplied.

A cheap-looking unit rate paired with a sky-high standing charge can easily work out worse than a deal that looks more expensive at first glance. The only way to compare contracts fairly is to look at both numbers together against your real usage — which is precisely what a broker does for you.

What's actually on your business energy bill

Beyond the unit rate and standing charge, a few other items appear on most commercial bills. Knowing what they are stops you from being caught out.

Types of business energy contract explained

When you take out a business energy deal, it will usually be one of the following. Choosing the right one is one of the most consequential decisions you'll make.

• Fixed-rate contract. Your unit rate and standing charge are locked for the whole term, so your prices won't rise even if the wider market does. Your bills still rise and fall with how much you use, but the rate is protected. The most popular choice for budgeting certainty.
• Variable-rate contract. Your rates move up and down with the wholesale market. You might benefit if prices fall, but you carry the risk if they climb. Harder to budget around.
• Flexible / basket purchasing. Used mainly by very large or multi-site businesses, this lets you buy your energy in chunks over time to manage risk. Powerful, but complex, and usually managed with a broker.
• Deemed & out-of-contract rates. Not a deal you choose — it's the costly default you're dumped onto if you move into new premises without a contract, or let an existing one lapse. Always the most expensive rates a supplier offers.
• Rollover contract. If you do nothing as a contract ends, some suppliers automatically "roll" you onto a new fixed term at uncompetitive rates. Knowing your end date is the simplest way to never get caught by one.

Business energy meters explained

Your meter type affects how you're billed and which contracts you're eligible for. There are three you're likely to encounter.

• Standard meters record total usage and are read periodically. Common in smaller premises.
• Smart meters send readings to your supplier automatically, ending estimated bills and giving you a clearer view of what you're using.
• Half-hourly (HH) meters record consumption every 30 minutes and are mandatory for larger businesses above a certain capacity. They give the most accurate billing and often unlock more competitive tariffs — but they need specialist handling.

If you're opening a new site, upgrading a meter, or think you may need a half-hourly meter, that's a specialist job. It's one of the core services our team manages end to end so you don't have to navigate the supplier and network process alone.

How to switch business energy supplier

Switching is more straightforward than most owners fear. The process looks like this:

1. Know your timing. You can usually agree a new contract in the months before your current one ends — securing tomorrow's deal at today's price. Switch too late and you risk a rollover or out-of-contract rates.
2. Gather your details. A recent bill, your MPAN/MPRN, your annual usage and your contract end date are all a supplier needs to quote accurately.
3. Compare the whole market. Because business prices are bespoke, the only way to know you've got the best deal is to tender across multiple suppliers — not just check one or two.
4. Sign and let it run. Once you accept a quote, the new supplier coordinates the switch. There's no interruption to your supply — the energy keeps flowing exactly as before.

The catch is step three: comparing the genuine whole-of-market cost, against your real consumption, across suppliers who all quote differently. That's time-consuming to do well — which is where a broker earns its keep.

Why use a business energy broker?

A business energy broker does the searching so you can do the running of your business. A good one will compare a wide range of suppliers on your behalf, use established supplier relationships to secure rates you'd struggle to get alone, handle the paperwork, and keep an eye on your renewal so you never drift onto expensive default rates.

The questions worth asking any broker are simple: do they search a genuinely wide panel of suppliers, are they transparent about how they're paid, and will they proactively manage your renewals? At Sonix Energy you get a dedicated, UK-based broker rather than an automated system — someone who knows your account and is a phone call away.

How to reduce your business energy bills: quick wins

Switching to the right contract is the biggest single lever, but it isn't the only one. A few that pay off quickly:

• Never let a contract lapse onto out-of-contract rates — diarise your end date the moment you sign.
• Check your VAT rate — if you're a low-usage business or charity paying 20%, you may be due the 5% rate (and a refund).
• Submit regular meter readings or move to a smart meter to kill inaccurate estimated bills.
• Tackle the obvious waste — LED lighting, timers and heating controls, and switching equipment off out of hours add up across a year.
• Consolidate multiple sites onto aligned contract dates to simplify admin and strengthen your buying position.

Frequently asked questions