A care home never closes. Corridor lights stay on at 3am, heating and hot water run through the night, and the laundry room is busy most days. So, when a renewal quote lands, it is not small print. Electricity is one of the biggest lines in your running costs, and every pound you save is a pound you can put back into care.
The catch is that business electricity suppliers do not price a care home like an office. There is no Ofgem price cap for businesses, your tax position may differ, and your meter type can change how you are billed.
This article explains how to choose business electricity suppliers for a care home, in plain English, with worked examples, tables, a chart and a switching checklist. A quick note: SwitchUrEnergy is a UK energy services comparison platform, and we earn from supplier partners when you switch through us, so we show you how to check any quote, ours included.
Key takeaways
Check whether your home qualifies for 5% VAT and no Climate Change Levy before comparing anything.
Compare annual cost, not just the unit rate.
Larger homes may need a half-hourly meter, which changes how quotes are built.
Never let a contract roll onto deemed rates.
Why care homes are different from other business customers
Most commercial buildings have quiet periods. A care home does not. Residents need warmth, light, hot water, meals, call systems and medical equipment around the clock, so your demand is high and steady rather than tied to opening hours. That shapes how you should compare commercial electricity suppliers.
Steady demand rewards price certainty
You cannot switch things off to dodge an expensive rate, so a fixed price protects the budget you have set for care and staffing.
You may be in a bigger size band than you expect
Kitchens, laundries, lifts and heating plant add up. Many homes land in the medium or large bands, where standing charges and metering rules differ from those for a small shop.
Your tax treatment may differ
Residential care can qualify for relief that ordinary commercial customers do not get. It is the easiest saving to miss, so we cover it next.
Check your VAT and Climate Change Levy position first
Most businesses pay 20% VAT on electricity. Power used in a relevant residential building, such as a care home, can qualify for the reduced 5% rate. The Climate Change Levy (CCL) is a per kWh charge on business energy. It is excluded for homes that provide residential accommodation with personal care for people who need it because of old age, disability, drug or alcohol dependence or mental disorder. Where the reduced VAT rate applies, the levy normally falls away too.
You usually need to tell your supplier. Suppliers publish a declaration or qualifying use certificate, and Octopus names care homes for the elderly among those who can claim. If your premises mix residential and other use, the split matters. When at least 60% of use qualifies, the whole supply can be treated as qualifying, and below that the bill is apportioned.
Check your latest invoice today and ask every supplier to confirm your treatment in writing. This is general information, not tax advice, so confirm details against HMRC’s VAT Notice 701/19 or with your adviser.
What to look for in business electricity suppliers
A low unit rate is only one line on the invoice. Use the below table as a checklist for every supplier or broker you speak to.
Table 1: A care home checklist for comparing suppliers
Factor | Why it matters for a care home | What to ask |
|---|---|---|
Annual cost | Standing charges weigh more at larger sites | What is my estimated annual cost, with levy and VAT shown separately? |
Contract and exit terms | Steady usage suits fixed pricing | What can change mid-term, and what does leaving early cost? |
Meter type | Half-hourly sites are priced differently | Is my agreed capacity right for my real demand? |
Renewal process | A missed date can mean deemed rates | When will you write to me, and which rate would I roll onto? |
Broker fees | Commission sits inside your rate | How much is the commission, in pounds? |
Meter type and half-hourly data
Any site that reaches 100kW of demand in a half-hour period must have a half-hourly meter. Larger homes may cross that line. The first two digits of your MPAN show your profile, and 00 means half-hourly. These sites usually receive bespoke quotes and may pay capacity charges.
Complaints and protections
A smaller home using up to 100,000 kWh a year may count as a microbusiness, but many larger homes will not. The Energy Ombudsman’s free service covers businesses with fewer than 50 employees, so larger operators should check what applies. Ask any broker to show its commission in pounds.
Contract types compared
The below table shows the four contract types you will meet and how each suits a care home.
Table 2: Contract types at a glance
Contract type | How the price behaves | Care home fit |
|---|---|---|
Fixed | Unit rate and standing charge locked for the term | Strong fit for steady demand and tight budgets |
Flexible or pass-through | Energy bought in stages, some costs passed on at cost | Larger groups with someone managing the market |
Time-of-use (smart) | Rates change by time of day | Only if you can move load away from peaks |
Deemed or out of contract | Default rate with no contract in place | Nobody by choice |
Most homes start with a fixed deal of one to three years. A shorter term lets you re-price sooner if the market eases, while a longer one gives certainty if it rises, and longer is not always cheaper. Business energy contracts are binding once agreed, and most suppliers offer no cooling-off period, so read the full terms before you say yes. Our guide to the 8 questions to ask a commercial electricity supplier shows what good answers sound like.
Where Octopus electricity fits
Octopus electricity often appears on care home shortlists. Octopus Energy for Business sells direct, so you see its price through its own online quote and should place it beside the others, because it is not on our partner panel. Published details point to 12, 24 or 36 month terms and 100% renewable energy, plus a joining advance payment of about three months’ estimated cost, refunded at the end of the contract.
Its Shape Shifter tariffs reward businesses that avoid the 4pm to 7pm peak and need a working smart meter, while its No Standing Charge tariff suits lower-usage sites.
For a care home, a time-of-use tariff only wins if you can genuinely move laundry or hot-water heating out of the peak, because evening routines make late afternoon hard to avoid. A plain fixed quote may come out cheaper, so compare annual cost. Our panel also includes British Gas, E.ON Next, EDF, ScottishPower, TotalEnergies and others.
What does a good rate look like?
There is no care home rate card, so use size bands. Table 3 repeats the rule-of-thumb ladder from our October 2026 rates guide, in pence per kWh before VAT.
Table 3: Rate ladder by size band, October 2026
Band | Annual use (kWh) | Strong | Ask questions | Typical standing charge |
|---|---|---|---|---|
Small | 15,001 to 30,000 | 26.0p or below | Above 31.0p | 45p to 65p a day |
Medium | 30,001 to 65,000 | 25.0p or below | Above 30.0p | 100p to 110p a day |
Large | 65,001 and over | 24.0p or below | Above 29.0p | 140p to 150p a day |
These are guides, not quotes. Half-hourly sites are priced differently, so expect a bespoke quote.
Practical examples: what the numbers look like
Example 1: the tax check. A home uses 100,000 kWh a year at 27p per kWh with a 145p daily standing charge (illustrative figures, before levy and VAT). Table 4 bills the same site two ways.
Table 4: The same care home, billed two ways
Line | Billed as standard business | Billed as qualifying care home |
|---|---|---|
Energy (100,000 kWh at 27p) | £27,000.00 | £27,000.00 |
Standing charge (145p a day for 365 days) | £529.25 | £529.25 |
Climate Change Levy (0.801p per kWh) | £801.00 | £0.00 |
VAT | £5,666.05 (at 20%) | £1,376.46 (at 5%) |
Total | £33,996.30 | £28,905.71 |
That is a gap of £5,090.59 a year, and it has nothing to do with the supplier’s unit rate. The levy rate is 0.801p per kWh from 1 April 2026.
Example 2: the cost of drifting. If that home missed its renewal date and rolled onto a 40p deemed rate, with the same standing charge, its bill before VAT would rise by £13,000, about £1,083 a month. Deemed rates can run at two to three times a fixed rate, so 40p is a cautious example. The chart shows all three outcomes with VAT included.
How SwitchUrEnergy and UK energy services can help
Good UK energy services go beyond price. We compare and switch electricity, gas and water in one place. Comparing is free to you, we show the contract term and any exit fees before you commit, and our Letter of Authority never lets us sign a contract without your consent. We compare a wide network of licensed suppliers, though not every supplier in the market. For more, read our guides to electricity suppliers by business type and what happens if your supplier goes bust.
Frequently Asked Questions (FAQs)
Here are answers to the questions we hear most often.
Do care homes pay 20% VAT on electricity?
Usually not. Homes providing residential accommodation with personal care can qualify for the reduced 5% rate, but you normally need to give your supplier a declaration. If you have been charged 20%, ask whether past bills can be corrected.
Is there a price cap on business electricity?
No. Ofgem’s cap covers households. Your price depends on wholesale markets, usage, credit profile and contract, so review your deal before renewal.
What happens if I do nothing at renewal?
You normally roll onto deemed or out-of-contract rates, which typically run at two to three times a fixed rate. Diarise your renewal window and compare early.
Is Octopus electricity available to care homes?
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.
Does it cost anything to compare with SwitchUrEnergy?
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 suppliers for a care home fit how the building really runs: steady demand, the right tax treatment, the right meter and a contract you will not forget to renew. Get those right and the unit rate becomes much easier to judge.
Start with your latest invoice, find your end date and compare at least three quotes by annual cost. When you are ready, get your care home electricity quote in a few minutes, or call (0203) 9500885, Monday to Friday, 9am to 5pm. Our team will talk you through your options before you commit.
This article is general information, not financial, tax or legal advice.