Business energy prices in 2026 and how SMEs pay less for energy, water and card fees

Most owners know roughly what they pay for energy. Far fewer know their unit rate, whether they are still in contract, whether the VAT on the bill is right, or that the water bill has been open to competition for nearly a decade. That is understandable. They are five separate markets with five sets of rules, and in each one the supplier does well when nothing happens.

This article goes through them one at a time. The energy sections lean on Ofgem's rules and its 2025 survey of 1,002 businesses, the DESNZ price statistics and the HMRC rules on VAT and the Climate Change Levy. The oil section uses the CMA's July 2026 report. Water uses Ofwat and the Scottish regulator. Card fees use the Payment Systems Regulator and UK Finance. Every figure is linked at the end.

What the official figures say about savings

You will see average savings quoted on comparison sites. Those figures come from the sites' own customers and nobody outside can check them, so they are not used here. The regulators have measured the market in a different way, by counting how many businesses end up on the dearer rates and what happens when they ask for a better deal. Those figures are below, each linked at the end.

Further down there are two worked examples that put pounds on the energy and card lines. They use assumed rates and say so.

Business electricity and gas prices in 2026

DESNZ publishes the average business electricity and business gas prices paid by non-domestic customers every quarter. The latest figures, for the first quarter of 2026, are below. They are averages across every business size, and small premises generally pay above them because the fixed costs of a supply are spread over fewer units.

A business comparing quotes should put them against those averages rather than against last year's contract. A unit rate well above 24p for electricity or 5p for gas on a standard premises is a sign the business is on an out of contract or deemed rate, or that the contract was signed when wholesale prices were higher.

What SMEs are paying and doing

Ofgem surveys businesses every year on how they deal with the market. The 2025 results, from 1,002 telephone interviews between August and October 2025, are below with the 2024 figures beside them.

The lines that cost the most are the out of contract and deemed rates. Around a quarter of businesses whose contract ended were moved onto one of those rather than a new contract, and a fifth had few or no offers to choose from. In most cases the renewal had been left until the supplier's letter arrived.

The rules that protect a business

Business energy has fewer protections than household energy. There is no price cap and no cooling off period. What there is depends on the size of the business, and the thresholds matter because they decide whether you can use the ombudsman and what a broker has to tell you.

Most owners have not heard about the December 2024 change. Until then only microbusinesses could take a complaint to the Energy Ombudsman. Ofgem's licence change extended it to small business consumers, and the Energy Ombudsman raised the maximum award for business disputes from £10,000 to £20,000 the same day. Suppliers now have to tell small businesses at least once a year that Citizens Advice can help and how to start a dispute.

How a business energy bill works and what to compare

A business energy bill has four parts, and most switching conversations only cover the first.

The VAT and levy lines are where small premises lose money without switching anything. HMRC's notice on fuel and power says a supply at or below an average of 33 kWh a day of electricity, or 145 kWh a day of gas, is charged at the reduced rate of VAT regardless of what it is used for, and the Climate Change Levy does not apply to it. That covers a lot of small shops, offices and workshops. Where 60% or more of the supply is for domestic or charity non-business use, the whole supply qualifies, and below that the qualifying share does. The supplier applies the standard rate unless it is told otherwise, and the business has to tell it.

On a 40,000 kWh premises the levy alone is about £320 a year at the 2026 to 2027 rate of 0.801p per kWh. That premises is above the de minimis line, so it pays the levy and 20% VAT. A premises using 10,000 kWh a year, which is about 27 kWh a day, is below it. On a £9,600 bill the difference between 20% and 5% VAT would be £1,440 a year, and VAT registered businesses reclaim it anyway, but a business that is not VAT registered, or a charity, keeps the difference.

The bigger loss is the out of contract rate. When a fixed term finishes and no new contract has been agreed, the supplier moves the business onto its out of contract rate. Ofgem says this is a variable rate and usually higher than a negotiated one. Citizens Advice says the supplier should contact you about three months before the end of a fixed term, and that a rollover period cannot be longer than twelve months.

The switching window on a fixed term contract opens a few months before the end date. That is when to get quotes, because once the term ends the business is on the variable rate until a new contract starts, and a new contract from a different supplier typically takes a few weeks to begin. The other thing to put in the diary is the move. Ofgem says a business that uses energy at new premises before a contract starts is put on a deemed rate, and in its 2025 survey 8% of businesses whose contract ended were on one.

Using a broker

Just over a third of businesses use a broker to find their contract, and Ofgem's survey found 72% of them satisfied with the service. A broker does the comparison across suppliers, handles the paperwork and chases the switch, which for a business without an office manager is the main reason to use one. Most brokers are paid by the supplier rather than by the business, usually through an amount built into the unit rate, and the rules now say that has to be disclosed.

Citizens Advice sets out the rules. A broker paid by a supplier has to be a member of a redress scheme, which means the Energy Ombudsman or the UIA, and has to tell you how much the supplier is paying them before you agree the contract. For a microbusiness the supplier then confirms the total broker payment and the amounts built into the unit rate and standing charge, within ten days of the contract being agreed. For larger businesses the supplier confirms the per unit and standing charge amounts. A broker that is registered and gives you the figure up front is working within the rules, and the figure lets you compare its offer with any other on a like for like basis.

How to compare business energy suppliers and switch

Business energy quotes are not published the way household tariffs are. A supplier or broker prices each business on its meter, its use and the wholesale market that day, so a comparison means getting several quotes on the same day for the same details. The details to have ready are the meter numbers (the MPAN for electricity and the MPRN for gas, both on the bill), the last twelve months of use in kWh, the contract end date and the current unit rate and standing charge.

Switching itself follows the same steps whichever supplier or broker is used.

1. Find the contract end date and any notice period. Citizens Advice says the supplier should contact you about three months before a fixed term ends. Evergreen contracts need up to 30 days notice.
2. Get quotes on the same day for the same details. Meter numbers, annual kWh, the end date. Three quotes is enough to see the spread.
3. Compare unit rate, standing charge and term together. Work out the annual cost of each quote on your own kWh rather than comparing unit rates alone.
4. Check what is included. Whether a broker payment is built into the rate, whether the VAT rate is right for the premises, and whether there are exit fees.
5. Sign and give notice. The new supplier handles the transfer. Ofgem says the old supplier can object if there is a debt, so clear any balance first.
6. Take a meter reading on the switch date. So the final bill from the old supplier and the first from the new one meet at the same number.

Business oil

Businesses off the gas grid heat with oil, and the oil market has none of the rules above. The CMA published its study of the heating oil market in July 2026. It found about 1.5 million households rely on heating oil, that the market is generally competitive, and that customers lack the protections that apply to gas and electricity, including access to an ombudsman. It recommended a registration regime for suppliers with minimum standards on quoting, cancellations and dispute resolution.

The price moves fast. The CMA found average retail prices rose from 65p a litre in England in February 2026 to 103p in March, with 83% of the rise coming from wholesale costs, and a typical 500 litre order went from about £320 to £520. Prices peaked at 123p in April and fell back to 104p in May. Scotland was dearest at 113p in March, Northern Ireland cheapest at 97p. Around 1,700 customers may have had orders cancelled in breach of contract during the spike.

For a business that means a few habits. Get three quotes before each order, since there is no cap and suppliers in the same area quote different prices on the same day. Buy before winter if the tank allows, as demand sets the price. Check the minimum order, the delivery date and the cancellation terms before paying. The CMA's recommendations are not law yet, so keep a record of every quote, as a dispute with an oil supplier has nowhere to go at the moment.

Business water rates and switching

Business water is the bill owners most often do not know they can switch. The retail part of the water market, which covers meter reading, billing and customer service, has been open to competition for business customers in Scotland since April 2008 and in England since April 2017. The pipes and the water itself stay with the regional wholesaler, so what changes when you switch is the retailer, its price for the retail part of the service and the service itself.

Very few businesses have done anything with it. Ofwat's state of the market report for 2021 to 2022 found 9.9% of eligible customers in England had switched or renegotiated in the previous twelve months, with larger businesses at 23.4%, and 77% were satisfied with their retailer. Ofwat gives no figure for savings, and because the wholesale charge is the same whichever retailer you use, the price difference between retailers is on the retail part only. The reasons to look at it are mostly service. One bill for several sites, a retailer that chases a leak, trade effluent charges checked, and a meter read rather than estimated. In Scotland, a code of practice introduced in April 2025 promises an enhanced service from retailers that have signed up, and WICS says a switch generally takes less than a month.

Merchant services and card machine fees

Merchant services is the industry name for the agreement that lets a business accept card payments, through a card machine, an online checkout or both, and the fees on it are what most owners call card fees. Cards are how most UK customers pay. UK Finance's 2026 report puts debit cards at 54% of all payments in 2025 and cash at 8%, with 39% of payments contactless. For a business that accepts card payments from its customers, the fees are a cost of sale that runs on every transaction and is rarely looked at after the terminal arrives.

The Payment Systems Regulator reviewed the market in 2021 and found it did not work well for businesses with card turnover under £50 million, which is almost all of them. Businesses did not shop around or negotiate, could not compare prices because the pricing was complicated, and were locked into terminal contracts with large early termination fees. Its survey found 78% of small and medium merchants had never tried to negotiate with their provider, and of the 21% who had, nearly 90% got a better price or better terms. Around 98% of small and medium merchants were on the provider's standard pricing, and new customers paid less than existing ones on average. Its remedies apply to the fourteen largest acquirers. From January 2023 card terminal contracts cannot run for more than 18 months. From July 2023 acquirers must give businesses a summary box of their fees, an online tool showing the key charges, and a message at the end of the contract term saying they could get a better deal elsewhere.

The fee itself has three parts. Interchange goes to the card issuer and is capped by law on UK consumer cards at 0.2% of the transaction for debit and 0.3% for credit. Scheme fees go to the card network and are not capped. The acquirer's margin is the part you can negotiate. Business cards, international cards and cards where the issuer or acquirer is outside the UK are not covered by the caps and cost more, which is why a blended rate on a mixed customer base is higher than the headline figures suggest.

The useful number is the effective rate, which is everything the acquirer took in a month divided by the card takings in that month. It includes the percentage fee, the per transaction fees, the terminal rental, the authorisation fees and any minimum monthly charge. Work it out from the statement, then put it against the summary box from two other providers. A difference of half a percentage point on £300,000 of card sales is £1,500 a year.

The annual check across all five

None of this needs doing every month. Once a year, with a recent bill for each service to hand, it takes about two hours.

What should an owner do this month?

1. Find the end date of every energy contract. It is on the contract or the last renewal letter. Put a reminder four months before each one.
2. Check whether you are already out of contract. If the last fixed term has ended and nothing was signed, you are on the variable rate now and can switch at any time.
3. Look at the VAT and levy lines on the energy bill. If the premises uses under 33 kWh of electricity a day or 145 kWh of gas, or is mostly domestic or charity use, tell the supplier.
4. Check the broker is registered and has given you its figure. A registered broker tells you what the supplier pays it before you sign, which is how you compare offers properly.
5. Work out your effective card rate. Total fees for a month divided by card takings. Then ask your acquirer for the summary box and compare it with two others.
6. Find out who your water retailer is. If the answer is the same company that owned the pipes in 2017, nobody has ever chosen one.
7. Get three oil quotes before the next fill. And fill before the cold weather if the tank allows.

On any one of these bills the saving from checking once a year is usually modest. Across all five, and over the length of each contract, it tends to add up to a few thousand pounds. Our articles on how much cash to keep in reserve and what Budget 2026 changes cover the other fixed costs that moved this year.

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