Understanding Business Electricity Bill

As a business owner you have lot of tasks that are competing for priority and business electricity bill probably never makes it in that list. However, if you spend few minutes understanding your bill, it can really pay off.


Business Electricity Bill

There is lot of information on your business electricity bill, however, the three most important things that you need to understand in order to cut down your electricity bills are:
  • Your standing charge
  • Your unit rate
  • Your contract expiry date
  • Climate Change Levy (CCL)
  • VAT


Standing Charge

The standing charge is the rate you pay each day for the supply of electricity to your business, irrespective of how much electricity you use. Some electricity supplier tariffs do not have Standing Charge but usually include this cost in your unit rate, making it slightly higher.

Unit Rate

The unit rate is the amount you pay for usage of each kilo watt hour (kWh) of electricity you use at your business.

Your Contract Expiry Date

This is the date when your current electricity supply contract expires.

Climate Change Levy (CCL)

CCL is a government levy that is compulsory for those businesses that do not use renewable energy. For businesses that use less than 33 kWh of electricity per day (12, 045 kWh per year) are also exempt from paying CCL charges. Few categories of businesses like B&B and care home are also exempt from paying CCL charges.


VAT

For most businesses, the VAT charged on electricity bill is 20%. Again, like the CCL charges, if a business spends less than 33 KWh of electricity per day (12, 045 KWh per year), your businesses will be charged a reduced rate of 5% on your electricity bills.
There are few other charges that are mentioned on your business electricity bill but they are counted towards the final cost of your bills. Some of these charges are:
  • IGT charges
  • Smart meter charges
  • Smart meter charges
  • Industry charges
  • Supplier margins
If you have concern regarding your electricity bills, call us on 0345 021 5000 and one of our trained energy experts can help you with your queries.