Your renewal quote has landed, the number looks steep, and you have no idea whether it is fair. Business electricity rates are not capped, they move with the market, and two similar sites can be quoted prices several pence apart.
So what counts as a good rate for your size? That depends on how much power you use, because suppliers spread fixed costs over more kilowatt hours when you use more of them. A café and a factory should never chase the same headline figure.
This article gathers what the main UK sources publish for October 2026, explains why they disagree, and turns the spread into a simple benchmark for each size band.
The key points
A strong fixed unit rate this month is roughly 27p per kWh or below for a micro site, 26p for small, 25p for medium and 24p for large, before VAT.
Above about 32p, 31p, 30p and 29p respectively, compare before you sign.
Out-of-contract rates typically run at two to three times a fixed rate, so never drift onto one by accident.
Judge every quote by annual cost, not unit rate alone.
These are rules of thumb built from published figures, not quotes. Only a live quote for your postcode, meter and usage gives your real number.
What drives your rate: the UK natural gas price, network costs and more
Your unit rate is built in layers. You can influence some of them. Others you can only time.
Why the UK natural gas price sets the tone
Gas-fired power stations still set the wholesale price of electricity for much of the year, so the UK natural gas price feeds straight into your quote. On 5 October, Catalyst Commercial put winter 2026 gas near 187 pence per therm and summer 2027 near 137. One therm is about 29.3 kWh, so 187p is roughly 6.4p per kWh before network charges, levies and supplier costs. European storage was only around 72% full. Our September gas guide explains how prices spiked in March after the Middle East conflict and have stayed jumpy since.
The charges stacked on top
Wholesale energy is only part of the bill. Purely Energy puts it at 40% to 55% of a typical bill, while Green Light Consultancy Group says non-commodity costs make up around 64%. Methods differ, but the message holds: a falling wholesale price does not always reach your invoice.
Network charges vary by region. Green Light reports transmission charges rising by roughly 60% from April 2026, mostly through standing charges.
Climate Change Levy is 0.801p per kWh from 1 April 2026 and 0.827p from April 2027, according to GOV.UK. Some quotes show it separately, others fold it in.
VAT is 20% for most businesses. Charities and very low users can qualify for 5%.
Your profile: credit score, meter type, usage and contract length all move the price.
The unit rate is one of four lines on your invoice. Its wholesale slice is the part that follows the UK natural gas price most directly. The more it
What counts as a good rate for your size
A good rate is relative. A 60,000 kWh site pays less per unit than a 10,000 kWh one, so start by finding your band.
Find your size band
Comparison panels group business electricity users roughly as micro (5,000 to 15,000 kWh a year), small (15,001 to 30,000), medium (30,001 to 65,000) and large (above 65,000). These match the bands in our September gas guide. Ofgem separately treats you as a microbusiness if you have fewer than 10 employees and turnover within about €2 million, or use under 100,000 kWh of electricity a year, according to Love Energy Savings. Sites below 5,000 kWh pay the most per unit, so judge those by annual cost.
Our rate ladder for October 2026
We set the strong line a little below the average one-year fixed rates that live panels report (about 27p to 29p) and above the wholesale-led figures some brokers publish (21p to 23p), because those lower numbers depend on site details and credit. The top line sits where all-terms averages land.
Size band | Typical annual use (kWh) | Strong | Typical | Ask questions | Typical standing charge |
Micro | 5,000 to 15,000 | 27.0p or below | 27.1p to 32.0p | Above 32.0p | 40p to 55p a day |
Small | 15,001 to 30,000 | 26.0p or below | 26.1p to 31.0p | Above 31.0p | 45p to 65p a day |
Medium | 30,001 to 65,000 | 25.0p or below | 25.1p to 30.0p | Above 30.0p | 100p to 110p a day |
Large | 65,001 and over | 24.0p or below | 24.1p to 29.0p | Above 29.0p | 140p to 150p a day |
Unit rates are pence per kWh before VAT, so check whether the Climate Change Levy is included. Landing in the last column does not mean you are being overcharged, but compare before you sign. If you are near 40p or higher, check your paperwork, because Purely Energy says out-of-contract rates have commonly sat well above that. Large sites with a peak demand above 100 kVA need a half-hourly meter and are priced on a different cost stack, so expect a bespoke quote.
Practical examples: what a few pence really costs
Two pence sounds trivial until you multiply it by your usage. These examples apply the ladder above and add a typical standing charge. All figures are before VAT.
Business | Annual use | Rate (strong / high) | Standing charge | Bill at strong | Bill at high | Extra a year |
Café (micro) | 12,000 kWh | 27p / 32p | 48p a day | £3,415 | £4,015 | £600 |
Retail shop or office (small) | 25,000 kWh | 26p / 31p | 60p a day | £6,719 | £7,969 | £1,250 |
Small hotel (medium) | 50,000 kWh | 25p / 30p | 105p a day | £12,883 | £15,383 | £2,500 |
Light manufacturer (large) | 90,000 kWh | 24p / 29p | 145p a day | £22,129 | £26,629 | £4,500 |
Two traps worth knowing
The standing charge trap. Imagine tariff A at 28p plus 60p a day, and tariff B at 31p with no standing charge. A's daily charge costs £219 a year, so B only wins below 7,300 kWh. At 5,000 kWh, B is £69 cheaper. At 12,000 kWh, A is £141 cheaper.
The cost of drifting. Purely Energy says out-of-contract rates typically run at two to three times a fixed rate. A small site using 25,000 kWh on a 26p fixed deal that rolls onto double that pays about £6,500 more over a year, roughly £540 for every month you wait.
One site, seven suppliers
Unit rate alone can mislead. Using the two-year fixed rates Love Energy Savings published for October 2026, we priced a 20,000 kWh site with each supplier.
The cheapest and dearest bills are £878 apart on identical usage. Valda would only beat British Gas above roughly 44,600 kWh a year, where its lower unit rate finally outweighs the higher daily charge.
Fixed, variable or flexible: choosing a contract
Most small and mid-sized sites choose a fixed contract, usually one to five years, which locks the unit rate and the standing charge. Variable or tracker deals move with the market and suit businesses that expect prices to fall. Larger sites may use flexible or pass-through contracts, which need active management. Deemed rates are the default when no contract exists, and they suit nobody.
With the UK natural gas price this unsettled, no term is risk free. A shorter fix lets you re-price sooner if the market eases. A longer one gives certainty if it rises. Longer is not automatically cheaper either. In our August comparison table, Utilita's three-year deal cost £29.55 less than its two-year deal, yet British Gas's four-year deal cost £12.95 more than its three-year one.
Where Octopus electricity fits
Octopus Energy for Business is worth a look if you like buying direct and want smarter tariffs. According to EnergyCosts.co.uk, Octopus does not publish a rate card for standard business import tariffs, so you only see prices through its online quote. Terms run for 12, 24 or 36 months, supply is 100% carbon-free, and a joining advance payment of around three months' estimated cost is usual, refunded at the end of the contract.
Its standout products are Shape Shifters, which reward businesses that can avoid the 4pm to 7pm peak, and a No Standing Charge tariff on a 12-month fix. Both suit particular profiles. Shape Shifters needs a working smart meter, and the no standing charge tariff works best for sites at the lower end of their usage band. If Octopus electricity is on your shortlist, put its quote beside the others and apply the same annual cost test.
Seven ways to secure a better rate
Know your numbers. Have your annual kWh, MPAN, meter type and contract end date to hand, so quotes reflect your real usage.
Diarise your renewal window. You can usually agree a new deal up to 12 months before your current one ends, while some suppliers only write about 60 days ahead. Early shoppers rarely meet out-of-contract rates.
Compare like for like. Use the same term, payment method and treatment of the Climate Change Levy and VAT.
Do the standing charge sum. Multiply your kWh by the unit rate, then add 365 days of standing charge.
Choose your term deliberately. Match it to how much price certainty your budget needs.
Read the small print. Check exit fees, notice periods and auto-rollover clauses. For contracts signed since 1 October 2024, Ofgem rules require broker fees to appear in the contract's principal terms, so ask any broker to show theirs.
Use less, or use it differently. Switching off idle equipment, upgrading lighting and moving load to off-peak hours can trim your kWh, and multi-rate tariffs reward it if your meter supports them.
How SwitchUrEnergy and UK energy services can help
UK energy services range from comparison and switching to metering and bill checks. We focus on the first two, covering electricity, gas and water in one place. Our comparison is free to you. Supplier partners pay us when you switch through our platform, and we show the contract term and any exit fees before you commit.
Our partner panel includes British Gas, British Gas Lite, Crown Gas & Power, E.ON Next, EDF, ScottishPower, Smartest Energy, TotalEnergies, Utilita and Yu Energy. We use a Letter of Authority only to request your usage and contract details. It never lets us sign a contract without your consent.
Three steps to your quote
Tell us about your business and your usage.
Compare personalised quotes side by side.
Pick your plan and we manage the switch, which typically completes within two to six weeks.
Prefer to talk? Call (0203) 9500885, Monday to Friday, 9am to 5pm. You can also read our guides to small business electricity prices by region, electricity suppliers by business type and what happens if your supplier goes bust.
Frequently Asked Questions (FAQs)
What are the best business electricity rates right now?
In October 2026, a strong fixed unit rate sits between about 24p and 27p per kWh depending on your size band, and typical rates run up to roughly 29p to 32p. Only a live quote for your postcode, meter and usage gives your real figure.
How much is business electricity per kWh?
Published October averages run from about 27p for one-year fixes on larger sites to 34.7p for the smallest sites averaged across all terms. The gap comes from what each source measures, so use the ladder above as a range.
Is there a price cap on business electricity?
No. Ofgem's cap covers households on default tariffs. Business rates are negotiated, so they depend on wholesale conditions, usage, credit and contract length.
Why does the UK natural gas price affect my electricity bill?
Gas-fired generation often sets the wholesale power price, so higher gas pushes up forward electricity prices and, in time, new quotes. A fixed contract you have already signed is unaffected until it ends.
Is Octopus electricity available to businesses?
Yes, through Octopus Energy for Business, which sells direct and shows prices through its online quote. Compare its annual cost with other quotes like for like.
Should I fix now or wait?
Nobody can promise where wholesale prices will go. A shorter term lets you re-price sooner if the market eases, while a longer term gives certainty if it rises. Compare both against your budget. This is general information, not financial advice.
What happens if I do nothing at renewal?
You usually roll onto deemed or out-of-contract rates, typically two to three times a fixed rate. These can normally be left without an exit fee, subject to notice terms, so compare and switch quickly.
Does comparing with SwitchUrEnergy cost anything?
No. Our comparison is free to you, and we earn from supplier partners when you switch through our platform.
Final Words
The best business electricity rates are not a single figure. They move with your size, your contract and the day you sign. In October 2026, aim for the strong end of your band, question anything in the last column of the ladder, and treat out-of-contract pricing as a warning light. Then check the standing charge, the levy, the term and the exit terms before you commit.
Ready to see where your business sits? Get your business electricity quote in a few minutes, or call (0203) 9500885. Comparing is free, and our team can talk through your options before you decide.