Understanding Business Energy Bills

With lots of individual charges, tariffs, and jargon to make sense of, we want to make understanding your business energy bills that little bit simpler. In this guide, we’ll break down the key components of your business energy bills, explain what they mean and how they affect your business, so you can take control of your energy and maximise your efficiency. 

Your business electricity and business gas bills are a combination of your actual energy usage, fixed daily charges, and various taxes and levies. 

• Unit rate – measured in Kilowatt hours (kWh) this is the primary component of your energy bill and is based on the amount of energy you use. This will usually be agreed upon with your supplier when you sign your contract. 

• Standing charges – this is a fixed rate that covers the cost of maintaining the energy supply to your business premises. This charge is not affected by how much energy you use and is included in your bill as a daily rate which will be agreed at the start of your contract. 

• Taxes and levies – these are non-commodity charges that are paid in addition to the energy you use each billing period. Some of the additional taxes and levies you will pay on your business energy bills include: 

• Value Added Tax – VAT is charged at a rate of 20%  

• Climate Change Levy – CCL is a government-imposed environmental tax designed to encourage energy efficiency in businesses 

• DUoS – Distribution Use of System [link once live] charges cover the cost of installing and maintaining electricity generation and distribution systems 

Your bill will also contain important information such as your contract start and end date, your supplier’s contact details, and either your Meter Point Administration Number (MPAN) or Meter Point Reference Number (MPRN) which you may need to give your supplier when making a query. 

There are several factors, both internal and external, that can drive energy prices and affect your business’ energy bills.   

• How much energy you use: The amount of energy you use is one of the greatest factors affecting the amount you pay for your energy bills. This means that by implementing energy efficiency strategies and reducing your consumption, you can reduce the amount you pay for your business energy bill. 

• The type of business energy plan you have: When you enter into a fixed business energy contract, you may have agreed-upon rates for the duration of your contract. This will directly affect the amount you pay for your bills. Similarly, if you have a variable contract, your prices may fluctuate more regularly. 

• Your credit score: Your business credit score can affect the energy deals that suppliers offer you. The higher your credit score, the more likely you are to be offered favourable rates. 

• The wholesale market: Energy prices are known to go up and down regularly with world events such as natural disasters and political unrest causing disruptions to energy generation and supply, driving the price of energy up. 

• Supply and demand: Energy prices are higher during periods of greater demand, such as  daytime hours in the week, and during the winter months. This means your bills will likely be higher if you use lots of energy at these times. 

Although the energy used by businesses and domestic customers comes from the same sources and is transported through the same distribution systems, average business energy bills are often higher than domestic energy bills. 

• Higher usage – This is partly because businesses typically use much more energy than domestic customers due to energy-intensive practices such as operating machinery and powering office equipment. Businesses also tend to have greater periods of energy use, due to long opening hours. 

• Higher standing charges – Business energy contracts will also usually have higher fixed standing charges which reflect the greater infrastructure and service demands associated with supplying energy to commercial properties compared to homes. 

• Additional charges – Businesses are subjected to higher rates of VAT, as well as a number of other government-imposed taxes and levies that do not apply to domestic customers. 

If you think you might be overpaying for your energy, our Energy HealthCheck tool can help you compare your business energy bills to similar businesses in your sector. It takes just 2 minutes to get your results, along with some recommendations for energy managment solutions to help you cut your costs. 

There are lots of different ways you can pay your business energy bill, so you can choose the option that’s right for you. 

• Direct debit: To make sure you never miss a payment; you can set up a direct debit for your business energy bills to be paid to your supplier automatically. 

• Via an online customer portal: Most energy suppliers have an online customer portal where you can make payments easily online. 

• BACS payment: You can also pay via a direct bank transfer using the details provided on your bill. 

• Pay-As-You-Go (PAYG): Also known as a prepayment meter, PAYG is a more flexible way of managing your bills that lets you pay for your energy before you use it, usually via an app, online, or at a physical location.  

• By phone: You may be able to make payments via phone by calling your supplier. The number to call should be listed on your bill. 

If you’re a Yü Energy customer and need help paying your energy bills, visit our support page for more information.  

We know managing your business energy bills can be overwhelming, that’s why we’ve created a range of free tools for our customers to help make things easier.  

Get your free quote today and find out more about how we can reduce your business energy bills and help you make the most of your business energy.