Business energy contracts with no standing charges

Updated with latest energy rates on May 7, 2025

When you compare business energy tariffs, you may have noticed that quotes show the “standing charge” alongside the unit rates. But what exactly does this mean, and how does it affect your business energy costs?  

This guide explains everything you need to know about business electricity and gas standing charges, including how they work, how they differ across contracts, and whether a no standing charge tariff could be the right option for your business. 

What is a standing charge? 

The standing charge on your business gas and electricity bill is a fixed fee that you pay each month to cover the cost of supplying power and connecting your premises to the energy network. It’s a flat charge you have to pay regardless of how much energy you use. 

It helps cover the cost of maintaining the infrastructure, like power lines and gas pipelines, that deliver energy to your business. Standing charges ensure that the energy network remains operational and ready to provide energy when you need it. 

How do standing charges work on business energy contracts? 

The standing charge you pay can vary depending on the type of energy contract you’re on. It’s important to know how your contract’s standing charges are structured to understand the full cost of your energy supply. 

Fixed contracts 

On a fixed contract, the standing charge will usually be priced in pence per day. Most fixed and variable business energy contracts include a standing charge. For example, your business electricity bill might show the following charges: 

• Unit rate – 25.6p per kWh 
• Standing charge – 54.2p per day 

If your business uses 10,000kWh of energy a year, then you’ll pay £2,560 for the energy you use, plus a further £198 in standing charges. 

Unit rates and standings charges can vary significantly based on the supplier and the length of your contract. It’s important to compare both to get a true idea of the total cost. 

Flexible contracts 

If you're a large business with higher energy usage, flexible contracts may offer a pass-through standing charge. These charges are typically set by the companies that operate and maintain the energy network and are passed on to you by the supplier.  

The fees for these services can fluctuate based on factors such as changes in the Distribution Use of System (DUoS) or gas transportation charges. 

What are the latest business energy standing charges? 

The standing charge for business electricity and gas can vary depending on the size of your business. As of May 2025, average standing charges are as follows: 

Business size	Standing charge (electricity)	Standing charge (gas)
Micro business	46.0p	44.1p
Small business	52.5p	46.0p
Medium business	69.0p	97.5p
Large business	161.6p	220.1p

_{Note: These figures represent the average standing charge for business electricity and gas from May 2025, though rates can vary by location and meter type. For more specific information, it’s always best to get a quote based on your business's energy usage and location.} 

Could your business benefit from a no-standing charge tariff? 

If your business only operates part of the year, or if you only use energy for a few hours each day, you might benefit from a business energy tariff with no standing charge.  

These types of tariffs allow you to pay only for the energy you use, making them an attractive option for businesses that have irregular or low energy usage. 

Advantages of a no standing charge tariff 

The main benefit of a no-standing charge tariff is that you only pay for the energy you use – no daily fees, even if you don’t consume any energy. This is especially beneficial if your business is closed for periods of time, such as during holidays or weekends, as you won’t be paying for gas and electricity when you’re not using it. 

However, it’s important to understand that no standing charge tariffs usually come with higher unit rates compared to those that include a standing charge. While the rate for each kilowatt-hour (kWh) of energy might be higher, you might still save money overall if your energy usage is low. 

Disadvantages of a no standing charge tariff 

While no standing charge tariffs seem like an attractive option at first, they may not always be the best choice for every business.  

If your business uses a lot of energy, you may end up paying more for your energy than you would with a contract that includes a standing charge. This is because the unit rates for these tariffs tend to be higher than on other fixed contracts, and businesses that use a significant amount of electricity or gas could end up paying more overall. 

As ever, it’s worth doing your sums and speaking to an energy expert before you commit to a contract. For higher-usage businesses, it’s possible that the unit rate will outweigh the benefit of having no standing charge. 

How can you lower your business energy costs? 

If standing charges are part of your business’s energy bill, being more energy efficient and thinking about when you use energy can help to cut your bills. Consider the following tips: 

• Energy efficiency upgrades: Implementing energy-efficient practices, such as switching to LED lighting or improving insulation, can help reduce your overall energy usage, which will lower both your standing charges and unit rates. 
• Consider time-of-use tariffs: Some business energy suppliers offer time-of-use tariffs, where the price of electricity changes depending on the time of day. If your business operates at non-peak hours, these tariffs may help reduce your costs. 
• Switch suppliers: Regularly comparing business electricity suppliers can help you find a deal that best suits your business. Different suppliers have varying standing charge structures, and switching to one that offers lower charges, or a better unit rate could save you money. 

If your business is small or has irregular energy usage, exploring no standing charge business electricity options might save you money. However, larger businesses with higher energy consumption may benefit more from traditional tariffs with lower unit rates. 

For tailored advice on which tariff is best for your business, contact the experts at Bionic on 0800 140 4667 to get the best deal on your business energy.