Commercial Energy Comparison UK — Electricity, Gas and Water Explained | Kilowatt Energy

Business Gas — What Your Commercial Energy Comparison Should Cover

Business gas is the primary fuel for heating, hot water, cooking and industrial processes. It is particularly important for restaurants, hotels, schools, care homes, manufacturers and any business with significant thermal load.

What your gas bill contains:

Business gas bills include a unit rate (pence per kWh), a standing charge (pence per day) and the Climate Change Levy. VAT at 20% is standard for most commercial premises; however, charities, care homes, and businesses below Ofgem’s micro-business threshold (under 293,000 kWh of gas per year) may qualify for the reduced 5% rate. This is one of the most commonly missed entitlements in business energy, and overpaid VAT can be recovered retrospectively for up to 4 years.

Current rates August 2026:

Business gas unit rates currently range from 6p to 9p per kWh for most SME customers on fixed-term contracts.

Common gas billing errors a commercial energy comparison can reveal: 

Incorrect estimated meter readings, VAT applied at 20% when 5% applies, Climate Change Levy applied to exempt businesses, and charges incurred during change-of-tenancy periods that are not the current occupier’s liability. Our forensic energy bill audit reviews every line item and identifies recoverable overcharges.

Business Water — The Overlooked Part of Commercial Energy Comparison

Business water is consistently the most overlooked element of any commercial energy comparison UK review and often the one with the most immediate savings potential.

The fact most businesses do not know:

Since April 2017, every business in England has had the legal right to choose its water retailer. Scotland’s market opened in 2008. The market structure mirrors energy — wholesalers maintain the physical infrastructure while licensed retailers compete on billing, metering and customer services. Switching retailer does not affect your water supply in any way.

Since 2017, only approximately 20% of eligible UK businesses have ever switched water retailer. The 80% who have not are almost certainly paying a default tariff that does not reflect the most competitive available rate. Some businesses on default tariffs since 2017 have been overcharged by up to 65% compared to negotiated market rates.

What your water bill contains:
Business water bills typically contain four charging elements: clean water supply, wastewater removal, surface water drainage and highway drainage. Errors in surface water drainage classifications and rateable value assessments are surprisingly common and can run undetected for years.

What including water in your commercial energy comparison can save:

Smaller businesses typically save £150 or more per year by switching water retailer. High-consumption businesses save an average of £2,200 annually. Our business water management service covers procurement, bill auditing, efficiency advisory and dispute management.

How Commercial Energy Comparison Works in Practice

Whether you approach suppliers directly or use a broker, the commercial energy comparison UK process follows the same basic steps. Here is how Kilowatt Energy manages it:

Step 1 — Gather your current contract details
Current supplier names for electricity, gas and water. Meter reference numbers — MPAN for electricity, MPRN for gas, SPID for water. Annual consumption from any recent bill. Contract end dates and current unit rates. If you cannot locate all of these, share what you have and we obtain the rest.

Step 2 — Full market comparison across all available suppliers
We compare live rates across 30+ energy suppliers and licensed water retailers simultaneously, matched to your specific meters, consumption profile and location. We do not operate a preferred panel — every available supplier is included in the commercial energy comparison.

Step 3 — Review the full contract not just the headline rate
We present a clear breakdown of each option — unit rate, standing charge, contract length, renewal terms and notice period. We explain what is fixed and what is variable, and we recommend based on your priorities.

Step 4 — Switch and manage renewals proactively
We handle the switch end to end for all three utilities and contact you 90 days before each contract expiry — ensuring you never roll onto an expensive out-of-contract rate.

What to Check Before Signing Any Commercial Energy Contract

Rollover and auto-renewal clauses — many business energy contracts automatically renew if you do not give notice before a specified deadline, typically 30-90 days before the end date. Missing this window can lock you into another term at a worse rate.

Out-of-contract rates — if your contract expires without a replacement, your supplier charges an out-of-contract or deemed rate. These are set entirely by the supplier with no regulatory cap and are typically 40-60% higher than negotiated fixed rates. Every week on an out-of-contract rate is money that cannot be recovered.

Standing charges vs unit rates — for low-consumption businesses or sites not trading seven days a week, a high daily standing charge can cost more annually than a slightly higher unit rate with a lower standing charge. Always calculate total annual cost when completing a commercial energy comparison.

VAT rate — confirm whether your business qualifies for the reduced 5% VAT rate on energy. Charities, care homes and businesses below Ofgem’s micro-business thresholds may be paying 20% when 5% applies. Overpaid VAT can be reclaimed for up to 4 years.

Broker commission disclosure — if you use a broker for your commercial energy comparison, ask them to disclose their commission before you sign. A reputable broker will tell you. One that refuses is a red flag — their commission is built into your unit rate and undisclosed commission inflates the deal presented as your best option.

Common Mistakes UK Businesses Make When Comparing Commercial Energy

Staying with the same supplier without checking the market. Loyalty does not produce better commercial energy rates. Suppliers rely on inertia — the business that never does a commercial energy comparison pays whatever rate the supplier sets at renewal.

Comparing only the unit rate. Standing charges, non-commodity costs and contract terms all affect total annual cost. A commercial energy comparison that shows only unit rates shows you less than half the picture.

Missing contract renewal windows. Not knowing your contract end date is one of the most expensive mistakes a business can make. Rolling onto an out-of-contract rate typically costs 40-60% more than a negotiated deal.

Leaving water out of the comparison. 80% of businesses have never compared water retailers since the market opened in 2017. Water billing errors are remarkably common and can run for years undetected. Including water in your commercial energy comparison UK review takes minimal extra time and regularly reveals significant savings.

Not reading the Letter of Authority. A LOA authorises a broker to act on your behalf. A fair LOA covers specific permitted actions — obtaining quotes and passing them to you. An overly broad LOA can give a broker authority to sign contracts without your explicit approval for each deal.

How Different Business Types Should Approach Commercial Energy Comparison

Restaurants and hospitality — high gas use for cooking, significant electricity for refrigeration and lighting, meaningful water use for cleaning and food preparation. All three utilities should be included in your commercial energy comparison. VAT qualification should be checked for both electricity and gas.

Care homes and residential settings — typically qualify for 5% VAT on energy. High gas use for heating and hot water. High water use for laundry and kitchen. VAT reclaim potential is significant if 20% has been historically charged.

Retail and offices — primarily electricity-dependent. Standing charge level matters significantly for sites not trading seven days a week. Water use is lower but worth including in the commercial energy comparison for billing accuracy.

Multi-site businesses — the strongest case for consolidated commercial energy comparison UK. Misaligned contract renewal dates, different suppliers across sites and inconsistent billing are common. Consolidation — as we demonstrated for Popovic Properties across 25 sites delivering £25,000 annual savings — produces both cost and administrative benefits.

Manufacturers and industrial users — high electricity consumption with potential for half-hourly meter benefits and flexible commercial energy procurement. Gas use for process heating. Water use that may include trade effluent agreements requiring specialist review. All three utilities should be part of a structured annual commercial energy comparison.