What is on your business electricity bill?

Your business electricity bill combines energy use, fixed charges and any separately billed network or policy costs, followed by tax. The electricity Climate Change Levy main rate is 0.801p per kWh from April 2026 [S5]. Match each line to your contract and billing period before assessing solar, batteries or chargers. Check tax treatment with your accountant. Checked October 2026.

Last checked 18 October 2026

How do you read a business electricity bill line by line?

Start with the supply address, meter identifier and billing dates. Put the contract price schedule beside the invoice. Your first task is to map each charge to its quantity, rate and period, rather than judging the total against a neighbouring business with different consumption.

Ofgem groups business prices into wholesale energy, network and environmental costs. The way your contract recovers those costs matters: a bundled unit rate and a rate excluding passed-through charges are different starting points for a reconciliation. Ask for written clarification where the invoice and schedule use different labels. [S9]

Use business electricity price data for context by consumption band. The figures do not replace your contract. This guide explains invoice components; the guide hub links to detailed help with individual charges.

What do unit rates and standing charges mean?

The unit rate is the price for energy used. A kilowatt hour, or kWh, measures energy; a kilowatt, or kW, measures power. The standing charge is a daily amount payable even on a day with no consumption. Ofgem identifies both as parts of a tariff. [S1]

If your contract lists day and night rates, check each register’s units and the applicable hours. Multiply each register’s energy by its own rate, then add the results. Do not average the rates without weighting them by consumption. Check whether the unit prices include network and policy costs before adding separate lines.

For the fixed daily element, use business electricity standing charges. Keep metering and data-service charges visible too if your agreement lists them separately.

Where do DUoS, TNUoS and capacity charges fit?

Your distribution network operator, or DNO, runs the local network. Distribution Use of System, or DUoS, recovers distribution costs. National Grid Electricity Distribution’s explanatory guide distinguishes energy, fixed, capacity and exceeded-capacity components. Some tariffs use red, amber and green energy windows. [S2]

Transmission Network Use of System, or TNUoS, recovers the cost of installing and maintaining the transmission system. NESO applies charges to suppliers and other relevant network users. How your supplier recovers that cost from your business depends on the contract. Do not apply a published transmission tariff to your invoice without checking the contractual charging basis. [S3]

Capacity or availability charges concern the supply capacity allocated to your premises, commonly expressed in kilovolt-amperes, or kVA. This differs from the energy consumed in kWh. Check the agreed capacity, billed rate and days; review excess-capacity charges separately. [S2] The agreed supply capacity guide covers changes to that allocation.

For interval data and time bands, read half-hourly metering and DUoS charges. A new charger proposal should use your site’s actual demand profile alongside this bill map.

What are RO, FiT, CfD and other policy costs?

The Renewables Obligation, or RO, and Feed-in Tariffs, or FiT, are renewable-generation support schemes with supplier obligations. Contracts for Difference, or CfD, support eligible low-carbon generation through a separate supplier-obligation mechanism. Ofgem also describes Capacity Market supplier charges, which support security of supply. These schemes are distinct from the levy tax on your invoice. [S4]

Ask which policy costs your unit rate includes, which can be adjusted during the contract, and which appear as separate lines. Request the calculation for an adjustment rather than assuming every line labelled environmental cost has the same basis. This is a contract-reading exercise; we do not compare suppliers or recommend tariffs.

How do CCL and VAT change the bill total?

Climate Change Levy, or CCL, applies to taxable business energy. GOV.UK sets out exclusions and reliefs, including small supplies and qualifying uses. Do not assume a contract’s renewable label settles the tax position. [S8]

HMRC lists the electricity main rate from April 2026 as £0.00801 per kWh, equivalent to 0.801p per kWh. Multiply taxable consumption by the applicable rate, checking relief separately. [S5] Use the CCL guide for the detailed treatment.

The standard VAT rate is 20%; the reduced rate is 5%. [S7] HMRC Notice 701/19 determines which fuel and power supplies qualify for reduced treatment, including de minimis supplies and qualifying use. The VAT base includes CCL where appropriate. This is general information: check with your accountant before requesting a tax correction or signing a use declaration. [S6]

What does a worked business electricity bill look like?

This is an illustration, not a quote. Assume a 30-day period, 5,000 kWh total consumption, a fully taxable business supply and no relief. All commercial rates, quantities and fixed amounts below are assumptions. The unit rates exclude the separately listed costs; the DUoS energy line excludes the separate capacity charge. CCL uses the verified main rate [S5], and VAT uses the standard rate [S7].

Replace every assumption with your invoice inputs. If your price already includes an allocation, remove the duplicate line. Prior balances, payments and credits should then reconcile the invoice total to the amount due. Keep their dates visible so a payment timing difference is not mistaken for a consumption error.

Why might reactive energy appear on the invoice?

A kVArh is a kilovolt-ampere reactive hour, a measure of reactive energy. The network guide describes a separate reactive charge on relevant half-hourly supplies. It concerns the electrical characteristics of the load and power factor, rather than a second purchase of the same active kWh. [S2]

Ask for the chargeable quantity and tariff calculation. The illustration uses an assumed billable quantity, not total reactive energy recorded by a meter. Have an electrical specialist assess equipment before proposing power factor correction; a bill line alone is not an installation design.

What should you do next?

Gather your bill, price schedule and interval data. Mark which costs vary with energy use and which require a separate contractual or capacity change. Use cut energy costs and the site check, then get matched with an installer that covers your area.

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