Is There an Energy Price Cap for Businesses?

Is There an Energy Price Cap for Businesses?

In short: no, there is no energy price cap for businesses.

Unlike domestic energy customers, businesses in the UK are not protected by a government-imposed price cap on their electricity or gas tariffs. While households have the benefit of the Ofgem-set energy price cap, commercial energy users must negotiate their rates directly with suppliers based on market conditions, contract types, and business usage patterns.

What Is the Energy Price Cap?

The energy price cap is a mechanism introduced by Ofgem to limit how much energy suppliers can charge domestic customers on standard variable and prepayment tariffs.

Reviewed every three months, the cap is influenced by a range of factors including wholesale prices, policy costs, and supplier operating costs. Although widely quoted as an "annual bill," it's actually a cap on unit rates (p/kWh) and standing charges (daily fixed fees).

As of July 2025, the domestic price cap stands at:

Electricity: 25.73p per kWh | 51.37p per day standing charge

Gas: 6.33p per kWh | 29.82p per day standing charge

This equates to an average annual bill of around £1,720 for households paying by Direct Debit.

Why Is There No Cap for Business Energy?

Business energy use is much more varied and complex than domestic consumption. Two companies in the same industry can use vastly different amounts of energy depending on:

• Business size

• Equipment and processes

• Operating hours

• Site infrastructure

For example, a takeaway restaurant and a light manufacturing facility may both rely heavily on electricity, but their load profiles, peak usage times, and contract structures are completely different.

This diversity makes it nearly impossible to impose a universal energy price cap that is fair, practical, or beneficial across all businesses.

Instead, business energy is purchased on bespoke contracts, which allows for flexibility in contract duration, tariff type (fixed or flexible), and supplier selection. These contracts are individually priced based on your unique business profile and market conditions at the time.

What Does the Domestic Price Cap Mean for Businesses?

While the domestic energy price cap doesn’t apply to businesses, it can serve as an indirect indicator of where the wider energy market is heading. Because the cap is based partly on wholesale energy prices, any major increase or decrease can hint at what business energy users may see in future commercial quotes.

For instance, a 7% drop in the domestic cap this July reflects lower wholesale gas prices, which may signal opportunities for businesses to lock in favourable fixed-rate deals. However, the commercial energy market moves independently and often reacts to a broader range of global and structural influences.

Should You Fix Your Business Energy Rates?

With wholesale prices still volatile and no business energy price cap to fall back on, fixing your rates can provide:

• Price certainty over the length of your contract

• Protection from unexpected spikes in market rates

• Peace of mind when budgeting and forecasting

As Tim Jarvis, Ofgem's Director General of Markets, recently put it:

"Prices are still high compared to historical norms. There’s a lot of volatility. It does make this market difficult, so I would recommend people try and switch to protect themselves from these fluctuations."

If you’re unsure whether to fix or float your next contract, Bright Edge can help you review your options and make a decision that fits your usage profile and risk tolerance.

Final Thoughts

While there is no official business energy price cap, that doesn’t mean you’re powerless. In fact, with the right advice and market timing, many businesses can secure better deals than those found under domestic caps.

At Bright Edge, we help you:

• Benchmark your current rates

• Compare live quotes from top UK suppliers

• Avoid out-of-contract penalties

• Secure a tariff that supports your growth

Let Bright Edge negotiate your business energy rates & see how much you could save

Contact us today to get started