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Most electricity and gas tariffs come with standing charges. Sometimes energy suppliers offer a no-standing charge energy contract - so it's worth understanding if this setup is right for your business or home.
But before you completely get rid of your standing charge contract, you must decide which tariff is right for you.
A standing charge is a fixed amount of money you pay daily, regardless of whether you use any energy. Your supplier sets the cost, and if you are unhappy with your business electricity standing charge you can always switch to another supplier.
Your standing charge covers the cost of:
Essentially, standing charges allow suppliers to maintain and improve their services.
Standing charges vary from supplier to supplier but tend to be similar. Ofgem, the regulator that oversees domestic and commercial gas and electricity, reviews and updates the cap on energy prices (including standing charge prices) every three months.
In 2024, business standing charges can be anywhere from 15p to 160p per day, depending on your energy usage. The daily business electricity standing charge is 72p per day on average across the UK, in September 2024, for a business using 25,000kWh of electricity a year. A business using 25,000kWh of gas a year can expect to be charged 48.6p per day in standing charges.
In the UK, as of August 2024, the only supplier to offer a no standing charge tariff is Utilita.
Utilita offers a variable tariff with zero standing charges on gas and electricity. Prices per kilowatt hour will vary based on your location.
No one is exempt from standing charges. Homeowners and business owners both have to pay this fixed charge. You even have to pay standing charges if you have a holiday home that is empty for most of the year.
The only way to avoid standing charges is to choose a no-standing charge tariff.
Most businesses have a standing charge included in their tariff. It is usually agreed upon when signing a fixed contract or can flex as the market changes if you are on a variable rate.
Learn more about how each tariff type can affect your business and ways you can benefit from them.
If you choose the right business energy tariff, you can minimise your daily standing charge and save money in the long run.
Let’s look at a fixed price, multi-rate, variable rate, and no-standing charge tariffs.
Fixed Price tariffs are the most popular type and for good reason. This tariff charges you the same fixed amount for electricity, gas, and your standing charge. Even if the wholesale price of energy fluctuates, your supplier will charge you the amount specified in your fixed-price contract.
Pros
Cons
If you choose a variable rate tariff, the price of your gas, electricity, and standing charge will fluctuate based on wholesale prices. Even if you use the same amount of gas and electricity from month to month, your next bill could be drastically higher or lower.
Luckily for people on variable rates, Ofgem has established a price cap. Ofgem’s price cap is slightly reassuring, but it has risen drastically in the last few years.
Pros
Cons
To access a multi-rate energy tariff, you need to have a multi-rate meter installed on your premises.
Two-rate meters are better known as Economy 7 meters. The day is split into two sections, peak and off-peak usage. The off-peak period is usually in the early hours of the morning, and it offers much cheaper rates than the peak periods.
Multi-rate business energy tariffs still have standing charges, but off-peak savings can soften the blow.
Pros
Cons
True to the name, no-standing charge tariffs do not have the fixed daily charge that many business owners want to avoid. These tariffs are also known as zero-standing charge tariffs.
The supplier covers the cost of supplying your gas and electricity, so you don’t have to. You only ever pay for the energy you use. You can sign up for a no-standing charge gas, electricity, or dual-fuel tariff.
Pros
Cons
If you want to ditch your business electricity standing charge, you have to shop around. Given the recent economic downturn, it is especially difficult for suppliers that offer this kind of tariff.
As of December 2024, there are business energy suppliers that are beginning offer zero-standing charge business energy tariffs. While the lack of daily standing charge does mean a higher unit rate (about 30p per kWh compared to 25p per kWh), there are still savings to be had on these tariffs. If you think your energy usage will benefit from this tariff, then it's worth running a comparison.
Want to compare this deal to all the other offers on the market? Compare standing charge suppliers today.
We took a look at the tariffs on offer from our panel of business energy suppliers, here are the 10 cheapest two-year deal standing charges available on the market as of September 2024 (for London businesses, for a fair comparison. For standing charges in your region, it's best to run a comparison). For more information about a supplier, click on the supplier's name.
| Supplier | Tariff Name | Contract Length (Years) | Region | Daily Standing Charge (Pence) | Annual Standing Charge Cost |
|---|---|---|---|---|---|
| Scottish Power | For Business vJ5 ADV AF_K26F CED-30/11/2026 | 2 | London | 34.37 | £125.45 |
| Scottish Power | Renewable For Business vJ5 ADV AG_K26F CED-30/11/2026 | 2 | London | 34.37 | £125.45 |
| British Gas Lite | BGLite Sep 2024 V104Love 12 | 3 | Single Rate SC DD Acquisition | 2 | London | 42 | £153.30 |
| EDF Energy | E-1R-EDF_FOL_06M_M_2YR_24-08-27_v1-C | 2 | London | 50 | £182.50 |
| SmartestEnergy | SmartFIX – 2 Year | 2 | London | 53.26 | £194.40 |
| SmartestEnergy | SmartPAY24 | 2 | London | 54.76 | £199.87 |
| SmartestEnergy | SmartFIXRenewable – 2 Year | 2 | London | 55.92 | £204.11 |
| British Gas | 12 | 3 | Single Rate SC DD Acquisition | 2 | London | 62 | £226.30 |
| British Gas | 12 | 3 | Single Rate REGO SC DD Acquisition | 2 | London | 62 | £226.30 |
| Valda Energy | Valda Energy 3UR_3.12.24 Single Rate LSC | 2 | London | 71 | £259.15 |
Standing charges above are SwitchWhiz's panel of suppliers for businesses in London using 25,000kWh of commercial electricity a year and for a contract beginning on 1st September 2024.
| Supplier | Tariff Name | Contract Length (Years) | Region | Daily Standing Charge (Pence) | Annual Standing Charge Cost |
|---|---|---|---|---|---|
| British Gas | London | B1A DSC DD Acquisition | 2 | London | 30 | £109.50 |
| British Gas | London | B1A Carbon Neutral DSC DD Acquisition | 2 | London | 30 | £109.50 |
| Scottish Power | For Business vM3 ADV AF_J26K CED-31/10/2026 | 2 | London | 35.11 | £128.15 |
| Valda Energy | Valda Energy NT - LSC | 2 | London | 41 | £149.65 |
| British Gas Lite | BGLite V103Love London | G3 SC DD Acquisition | 2 | London | 48.44 | £176.81 |
| British Gas | London | B1A SC DD Acquisition | 2 | London | 68.44 | £249.81 |
| British Gas | London | B1A Carbon Neutral SC DD Acquisition | 2 | London | 68.44 | £249.81 |
| SmartestEnergy | SmartestEnergy SmartFIX – 2 Year Level1 | 2 | London | 144.3 | £526.70 |
| SmartestEnergy | SmartestEnergy SMARTPAY – 2 Year | 2 | London | 144.8 | £528.42 |
The standing charges above are SwitchWhiz's panel of suppliers for businesses in London using 25,000kWh of commercial gas a year and for a contract beginning on 1st September 2024.
The amount you pay in standing charges depends on your energy usage, but typically shouldn't be more than a small percentage of your annual bill. For a business using 25,000kWh of electricity annually, the standing charge comes (around 72p per day on September 24) up to about 4.5% of their annual bill. For a micro business using a modest 2,500kWh of electricity annually, the standing charge (91p per day in September 2024) makes up 36% of the business's annual bill.
The table below shows how the standing charge impacts the annual business electricity bill for businesses of different sizes.
| Business Size | 2-Year Rate (p per kWh) | 2-yr Standing Charge (p) | 2-yr Annual cost | Standing Charge Impact on Annual Cost (%) |
|---|---|---|---|---|
| Micro business (0 - 5,000kWh) |
24.0 | 91.3 | £932.44 | 35.71% |
| Small business (5,000 - 15,000kWh) |
25.7 | 75.0 | £2,846.55 | 9.63% |
| Medium business (15,000 - 25,000kWh) |
25.7 | 77.5 | £5,421.84 | 5.22% |
| Large business (25,000 - 50,000kWh) |
26.1 | 85.5 | £10,116.73 | 3.09% |
| Very large business (50,000 - 100,000kWh) |
25.8 | 100.8 | £19,690.20 | 1.87% |
The table above is calculated using the mid-point of the electricity usage band, i.e. 0-5000kWh is calculated using 2,500kWh. Data is from the SwitchWhiz panel of commercial electricity suppliers, and data retrieved on September 1, 2024
If you are currently on a tariff that has standing charges, you are contractually obligated to pay them. Remember, standing charges are not linked to your usage. Even if you use no energy, you still have to pay your daily standing charge.
The only way to avoid standing charges is to choose a no-standing charge tariff.
It all depends on the type of business. No-standing charge tariffs typically have higher kWh unit rates to account for the lack of a daily, fixed cost. Because of this, zero-standing charge deals make sense for businesses that use less energy.
If you run a conventional business that is open at all hours of the day, you probably won’t benefit from a zero-standing charge tariff. However, if you run a yoga studio that is only open for a few hours each day, this type of tariff is perfect for you.
First, you need to check the terms in your existing contract. Do you have to pay an exit fee? If the answer is yes, are the exit fees low enough to justify switching to another, far cheaper tariff?
Next, you need to compare all the suppliers and tariffs on the market. If that sounds impossible, don’t worry. Our intelligent algorithm compares all business electricity standing charge tariffs and finds the best deal for your business.