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24 Aug

How to Compare Business Energy Prices Per kWh?

by Simon Thompson

When you are looking at your business energy bills it is important to remember that although there are a wide variety of costs that go into making them up, the two critical ones are:

  • Standing charge. The fixed amount you are charged on a daily basis, regardless of how much energy you actually use
  • Unit rate. The price you pay per unit of energy used, usually shown as kWh – these are the costs that will vary each month

But what do you need to know when you are looking at business energy prices per kwh?

What does kWh mean?

kWh is the abbreviation of kilowatt-hour – a measure of energy that is equal to 1000 watts being used for an hour. Every appliance that is used in a business has its performance measured in watts, and you should be able to find the wattage of an item on its packaging or label.

What is the average cost of electricity per kWh?

When we are looking at business electricity rates per kWh the rates paid tend to vary by region, but the average cost within the UK is around 14.40p per kWh. This compares to around 20.58p per day on average for the standing charge within the UK – although again there are differences in regions.

How do energy providers use kWh information?

When your chosen energy supplier is calculating your energy bill, they will look at how many kWh of electricity and gas you used over a set period of time and then multiply this by the price per unit set in your agreed tariff.

They will also multiply the number of days covered by the billing period by the daily standing charge and then add this cost to your kWh cost to come up with the total amount owed.

What other costs are included in your business energy bill?

On top of the costs of the standing charge and kWh price, you will probably also pay taxation costs such as VAT (at a rate of 20%) and the Climate Change Levy (CCL) as well. This is why when you are comparing business energy suppliers it is best to compare the cost of your annual bill rather than just the rates.

You may find a supplier with a cheaper kWh price, for example, but they may then have a higher standing charge which you have to pay. If you use your consumption data for the past year as a guide, you will have a much better idea of overall costs.

If you are looking to compare energy prices then the best way to do it is to contact the D-ENERGi team. You don’t need to waste any time going from supplier to supplier to find the best quote, we will take care of all of that for you.