Within this guide, we will help you understand the changes that are currently happening within the energy market and how to secure a new energy deal or a better energy deal as a micro business.
Compare prices now
What is a microbusiness?
Companies House defines a microbusiness as the following:
- An annual turnover of no more than £632,000
- An annual balance sheet total of no more than £316,000
- No more than 10 employees
Ofgem has recently announced changes that will simplify the process for micro businesses trying to switch energy suppliers.
What is the definition of a microbusiness for energy?
Energy Regulator, Ofgem, defines a microbusiness as a business which:
- Uses less than 100,000 kWh of electricity a year
- Uses less than 293,000 kWh of gas a year
How do microbusiness energy contracts work?
No two businesses are the same, so it’s impossible to give an exact figure – factors such as your location, sector and tariff, as well as consumption, will all have an impact.
However, we’ve put together the chart below detailing how much electricity and businesses of a similar size to yours use annually, the average kWh unit price for gas and electricity and the average standing charges to give you a rough idea. Additionally, it is crucial to consider third-party costs in energy contracts, as transparency and disclosure of these costs, including those from brokers and suppliers, ensure consumers are fully informed about their expenses.
How are microbusiness energy contracts different to normal ones?
Microbusiness energy deals typically differ from other SMEs in terms of contract rates, the amount of energy consumed and the level of flexibility and control they have over their energy consumption. Due to their smaller size and lower energy consumption, micro-businesses typically have less bargaining power when negotiating their energy costs and contracts with suppliers. This can limit their options and result in less favourable contract terms compared to larger SMEs.
Third-party intermediaries play a crucial role in facilitating access to energy suppliers and advising clients. They operate within a regulatory framework, including the Alternative Dispute Resolution (ADR) scheme, which aims to enhance protections for microbusiness customers when dealing with brokers or TPIs.
In addition, micro-businesses often have less control over their energy consumption and are less able to take advantage of flexible pricing options such as time-of-use tariffs or demand response programs. This is because they may not have the same level of energy management expertise or resources as larger SMEs, and may not be able to adapt their energy consumption patterns to take advantage of these options.
Overall, micro business energy contracts tend to be simpler and more standardised than contracts for larger SMEs, with fewer options for customisation or negotiation. However, micro-businesses can still benefit from shopping around for the best deals and looking for suppliers that offer support and advice on energy efficiency measures that can help them reduce their energy consumption and costs.
Domestic energy refers to the energy used in households, while business energy refers to separate contracts and the energy used by businesses or commercial premises. There are several key differences between domestic energy deals and corporate energy:
Usage
The amount of energy usage in households is much lower than that used in businesses. This is because businesses typically have larger premises, and more equipment, and run for longer hours resulting in their energy consumption being higher.
Tariffs
The energy tariffs for households and businesses are different. Business energy tariffs are usually based on the amount of energy used and the time of day it is used, whereas domestic tariffs are usually based on a fixed rate per unit of energy used.
Metering
Business energy meters are generally more complicated than domestic energy meters, as they need to measure energy consumption for various parts of the business separately. This means that businesses may have multiple meters for different areas, such as lighting and heating.
Energy efficiency
Businesses often concentrate more on energy efficiency than households, as lowering your energy consumption can have a significant impact on your business energy bills. They may invest in energy-efficient equipment, implement energy-saving practices, and conduct energy audits to find areas where they can save energy.
Overall, the main difference between domestic electricity bills and business energy is the level of energy usage, which can have an impact on pricing, metering, and energy efficiency measures.
How much does energy cost for microbusinesses?
Want to get an up-to-date idea of the going rate for business energy? The table below shows averages per unit of gas and electricity on a one-year fixed-term energy contract starting from August 2024.
What are the energy rates for microbusinesses?
Average business electricity prices per kwh by business size
| Business size | Annual usage | Unit price (per kWh) | Daily standing charge (pence) | Annual cost |
|---|---|---|---|---|
| Micro business | 5,000 to 15,000 kWH | 25.1p | 49.9p | £2,692 (based on annual usage of 10,000 kWh) |
| Small business | 15,000 to 25,000 kWh | 25.1p | 48.1p | £5,958 (based on annual usage of 22,500 kWh) |
| Medium business | 25,000 to 55,000 kWh | 25.1p | 73.9p | £12,192 (based on annual usage of 47,500 kWh) |
| Large business | More than 55,000 kWh | 24.5p | 75.4p | £13,750 (based on annual usage of 65,000 kWh) |
Disclaimer: Due to volatility within the energy market, prices can change on an hourly basis meaning that the prices you’re quoted are different from the averages shown. Prices may also vary according to your meter type and business location. Updated 2025.
Average gas kWh Prices by business size
| Business size | Annual usage | Unit price (per kWh) | Daily standing charge (pence) | Annual cost |
|---|---|---|---|---|
| Micro business | 5,000 to 15,000 kWH | 5.9p | 33.9p | £920 (based on annual usage of 10,000kWh) |
| Small business | 15,000 to 30,000 kWh | 5.9p | 36.6p | £18,131 (based on annual usage of 22,500kWh) |
| Medium business | 30,000 to 65,000 kWh | 5.9p | 79.2p | £38,328 (based on annual usage of 47,500kWh) |
| Large business | More than 65,000 kWh | 5.4p | 55.7p | £52,200 (based on annual usage of 65,000kWh) |
Disclaimer: Due to volatility within the energy market, prices can change on an hourly basis meaning that the prices you’re quoted are different from the averages shown. Prices may also vary according to your meter type and business location. Updated 2025.
How can your microbusiness switch rates/tariffs?
If you are looking to compare microbusiness energy deals, contact the energy experts at Utility Bidder.
Our energy experts can talk you through competitive quotes from the UK’s leading business energy suppliers and provide you with all the information you need. We will manage the entire switching process for you. Get in touch today to start your business energy comparison.
What is alternative dispute resolution for business energy?
The Alternative dispute resolution scheme (ADR) has been introduced by Energy Regulator, Ofgem and The Energy Ombudsman.
The aim of the ‘Microbusiness Strategic Review‘ is to provide better, fairer energy agreements for micro-businesses in the UK. Based on consumer feedback and research, Ofgem has introduced guidelines and restrictions for TPIs/ Brokers and energy suppliers to support microbusinesses when procuring new energy deals.
Initiated in mid-2022, several elements of the overall scheme are now active, which will contribute to the wider aim of providing a better experience to micro businesses within the energy industry. The Microbusiness Strategic Review is a combination of several measures put in place by Ofgem. These measures include Faster More Reliable Switching (FMRS), an Alternative Dispute Resolution scheme (ADR), fee transparency and the removal of termination notices. The aim is to provide protection, support and guidance when navigating the current market.
Due to the current turbulence of the market, the Microbusiness Strategic Review is more important than ever. The main goal of the Microbusiness Strategic Review is to enhance the experience of micro-businesses in the utility market.
Are there any incentives or support for microbusinesses?
Many government schemes provide loans, grants, or subsidized energy-saving measures to help small businesses reduce their environmental impact. These typically assist with:
- Implementing energy efficiency measures, such as optimizing production processes.
- Covering the upfront costs of investing in energy-efficient equipment.
- Supporting waste management and reduction initiatives.
- Promoting sustainable development projects.
Start by exploring the GOV.UK business finance and support finder.
You should also inquire with your local council about available energy efficiency funding or grants for sustainable business growth. Typically, a business case is required for applications, and some projects may qualify for business innovation funding.
Consider the national Smart Export Guarantee scheme, which pays businesses to generate their own renewable power and heat.
Starting in 2022, the government plans to introduce two new energy efficiency schemes to replace the existing renewable heat incentives:
- Clean Heat Grant: Offers upfront capital funding for businesses or households that adopt green heating technologies, like heat pumps or, in some cases, biomass systems.
- Green Gas Support Scheme: Provides funding for biomethane injection, aiming to increase the amount of green gas in the national grid.
What help is available if you’re struggling to pay your energy bills
If you are struggling with your business energy bills and fall into debt with your energy supplier, your energy supply may be disrupted or handed over to a debt recovery agency.
It is highly unlikely that your energy supply will be disrupted but may happen if you have an electricity bill and cannot arrange a payment plan within 30 days of your missed payment.
If your business energy supply is cut off, you may incur a fee that will be added to the total debt amount. In addition to this, there is also a fee to be reconnected.
If you are struggling to pay your business energy bills, you must get in touch with your energy supplier as soon as possible to enquire about support or payment plans they may be able to offer.
Can you switch suppliers if you’re in debt?
If you are in debt with your energy provider for more than 28 days, you will not be able to switch your micro business energy contract. You will be able to switch energy suppliers once the debt has been cleared.
It is important to remember that you can only switch energy suppliers during your renewal period which is usually one or up to six months before your business energy contract end date.
Can people who work from home get business energy deals?
If you’re working from home, it’s likely that your energy consumption will increase, since you’ll be using more gas and electricity bills and heating than you would if you were out of the house during the day. However, whether or not you need a business energy deal will depend on the nature of your work and the terms of your energy contract.
If you’re running a business from home, or you’re using a lot of energy for work-related purposes, you may need to switch to a business energy deal. This is because most residential energy contracts are designed for personal use, and they may not provide the same level of support or flexibility that a business energy contract can offer. In addition, if you’re working from home and using a lot of energy, you may be able to claim tax deductions or other benefits that are only available to businesses.
It’s also worth noting that many energy providers offer exclusive deals for small businesses and self-employed individuals, so it’s worth shopping around to see if you can find a better deal than your current residential energy contract. Ultimately, the decision of whether or not to switch to a new business premises’ energy contract will depend on your circumstances, so it’s worth doing some research and seeking advice from your energy supplier if you’re not sure what the best option for your business gas and electricity is for you.
Response was very quick. quotes were very competitive and the advice from Liam was exactly what was needed. a great service!
Very quick & easy contact, sourced new rates quickly & transfer process was simple .
Utility Bidder takes all the hassle out of sorting through the mine field of service providers and provides a professional and time efficient way of securing a competitive price for my energy needs.
Having previously spoken with a rival broker whose consultants I felt were pressuring me into signing a contract immediately, Kirsty Schofield was a breath of air. She found a cheaper and shorter contract to suit my needs and was very friendly and efficient. She made renewing my energy contract a pleasant experience instead of a dreaded chore.”
First class service from Sarah at Utility Bidder, I have been with them for a couple of years now and wouldn’t go elsewhere and would certainly recommend.
Don’t take our word! Listen to our customers
Award-winning energy comparison
We’re dedicated to helping businesses like yours save more on energy. It only takes a couple of minutes to compare quotes.