Business energy price comparison guide

Comparing business energy prices sounds simple: collect a few quotes, pick the lowest unit rate, sign. In practice, two quotes with almost identical headline rates can differ by thousands of pounds a year, because most of what you pay is hidden inside that single number.

This guide explains how business energy pricing is actually built, why comparison sites and brokers rarely show you the whole picture, and the checks that tell you which quote is genuinely cheapest.

How business energy prices differ from domestic tariffs

Business energy is not covered by the domestic price cap, contracts are individually quoted rather than published, and prices are usually valid for only a few hours or days because they are priced off live wholesale markets. There is no cooling-off period on most business contracts, so a signature is binding.

That means comparison is a point-in-time exercise. A quote you gathered last week cannot be fairly compared with one issued today, because the underlying wholesale market has moved in between.

What is actually inside your unit rate

A business electricity or gas unit rate is a stack of separate costs bundled into one pence-per-kWh figure:

• Wholesale commodity cost — the traded price of the energy itself, and the only part that tracks the market.
• Network charges — transmission and distribution costs for getting energy to your meter.
• Policy and levy costs — government schemes recovered through your bill.
• Supplier risk premium — a buffer the supplier adds because it is fixing a price years ahead.
• Supplier margin — the supplier's own profit.
• Broker commission — an uplift added to the unit rate to pay whoever arranged the contract.

Only the first item moves with the market. Everything else is negotiable, variable between suppliers, and almost never itemised on a quote. Two suppliers can buy energy at the same wholesale price and still quote very different rates purely because of the layers stacked on top.

How comparison sites and brokers are paid

Most business energy comparison services are free to use because they are paid by the supplier, not by you. Commission is typically added to your unit rate as an uplift — often between 0.1p and 1p per kWh — and collected over the life of the contract.

Two consequences follow. First, the commission is paid by you, invisibly, through a higher rate. Second, longer contracts pay more commission, which is why three and five-year fixes are pushed harder than shorter, more flexible arrangements.

None of this is inherently wrong — brokers do useful work on bill validation, site moves and reporting. But you cannot compare quotes properly without knowing how much commission is inside each one. Since 2024, Ofgem's rules require suppliers and third-party intermediaries to disclose commission on request, so you are entitled to ask.

The nine checks before you sign

• Ask for the commission or uplift, in pence per kWh, in writing for every quote.
• Check whether the quote includes all non-commodity costs, or whether they are 'pass-through' and will change later.
• Compare standing charges per meter per day, not just unit rates — multi-site businesses feel these heavily.
• Confirm whether the price is genuinely fixed, or subject to change clauses if network or policy costs move.
• Look for volume tolerance clauses that penalise you for using materially more or less than forecast.
• Check contract length, exit fees and any automatic rollover terms.
• Confirm the quote validity window — an expired quote is not a comparison.
• Compare quotes priced on the same day, using the same annual consumption figure from your actual meter data.
• Model the total annual cost, not the unit rate: (consumption x unit rate) + (standing charge x days x meters).

Fixed, flexible and wholesale-linked pricing compared

A fixed contract asks your business to predict the market once, even though the price changes every hour. It buys certainty, and you pay a risk premium for it. If you fix at the top of a market, you carry that decision for years.

Flexible or basket purchasing spreads buying across multiple points in time and is normally reserved for very large consumers with the resources to manage it.

Wholesale-linked pricing takes a different route: you pay the wholesale market price plus a single, visible fee, with no broker commission or risk premium buried in the rate. You see what the energy costs and you see what you are paying for the service. Comparison becomes arithmetic instead of guesswork.

Common mistakes when comparing business energy quotes

• Comparing unit rates alone and ignoring standing charges and contract terms.
• Using an estimated annual consumption rather than half-hourly or actual meter data.
• Comparing quotes gathered days apart, in different market conditions.
• Assuming a longer fix is safer — it usually carries a larger risk premium.
• Letting a contract roll over, which puts you on out-of-contract rates that are typically far higher.
• Treating a 'free' comparison service as cost-free when its fee is inside your rate.

When to start comparing

Most suppliers will quote up to twelve months before your contract end date, and many businesses secure prices six to nine months out. Starting early gives you the option to wait for a better market rather than accepting whatever is available in your final week. Leaving it late is the single most expensive habit in business energy procurement.

The short answer

The cheapest quote is rarely the one with the lowest headline rate — it is the one with the least stacked on top of the wholesale price. Ask for the commission, compare total annual cost on the same day using real consumption data, and read the change and tolerance clauses before you sign.

Hedged shows UK businesses the live wholesale price alongside a single transparent fee, so a comparison takes minutes rather than weeks. You can see your price with no obligation to switch.