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Business electricity standing charges
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What is a business electricity standing charge?
A business electricity standing charge is a fixed daily fee included in most business electricity tariffs, charged regardless of how much electricity is consumed.
Standing charges typically appear as a separate line on business electricity bills and are priced in pence per day (e.g. 50p/day).
In this guide, we cover all the key questions about business electricity standing charges, including:
- What’s included in a business electricity standing charge?
- How are standing charges for business electricity calculated?
- Business electricity standing charges on different tariffs
- Average business energy standing charges
- Strategies to reduce business electricity standing charges
💡This article does not cover high-voltage connections used in the industrial sector, which have standing charges of hundreds of pounds per day.
What’s included in a business electricity standing charge?
Business electricity standing charges encompass six different costs energy suppliers incur to supply commercial properties with electricity. We’ll explain each below.
Distribution Use of System Charges (DUoS)
All businesses pay a fixed DUoS standing charge for the maintenance of their connection to their local electricity distribution network.
DUoS standing charges depend on the pricing set by your local distribution network operator and the import capacity of your business electricity connection.
For example, a low-voltage commercial property in London pays a DUoS charge of 24p/day.
Transmission Network Use of System (TNUoS)
All businesses pay fixed TNUoS standing charges for using the national grid to distribute electricity across Britain.
TNUoS fixed charges depend on the Maximum Import Capacity of a connection and range from 7p/day for a commercial property with low demand to £3.12/day for a property with a 100kVA connection.
For a full breakdown of TNUoS standing charges by business size, visit our guide to TNUoS charges for businesses.
Metering maintenance and communication
Fixed metering costs cover the installation, maintenance, and manual meter readings of a business electricity meter.
Modern smart business energy meters do not require manual meter readings but instead incur charges for the wireless communication of business energy consumption data.
💡Customers with half-hourly meters can opt for separate Meter Operator contracts instead of paying metering costs through the business electricity standing charge.
Capacity charges
Customers with half-hourly electricity meters pay an additional fixed capacity charge to guarantee the Maximum Import Capacity of their connection.
Please visit our full guide to maximum demand charges for more information.
Supplier operating costs
Business energy suppliers incur fixed costs to manage their customers’ services and billing functions.
A supplier typically recovers the overheads associated with customer management through daily standing charges.
Supplier profit margin
Business electricity prices are uncapped, meaning most suppliers add a profit margin to the components of daily standing charges summarised above.
Use our business electricity comparison service to find the most competitive standing charges currently available.
How standing charges for business electricity are calculated
Business energy suppliers consider the following two key factors when calculating standing charges for their customers.
Type of connection
Distribution and transmission standing charges depend on the capacity of an individual connection to the grid.
A business electricity connection with a higher demand for electricity places additional strain on the grid, increasing the associated fixed charges.
Your connection details are included with the MPAN associated with a non-domestic business electricity connection.
Location
The electricity distribution network in Britain is divided into 14 regional distribution networks.
The distribution charges for each network are set by Ofgem based on the costs of maintaining the infrastructure in that particular region.
DUoS standing charges tend to be higher in rural regions, such as North Wales and Mersey, where power cables need to span longer distances between properties.
Business electricity standing charges on different tariffs
The type of business energy contract your business chooses significantly impacts the daily business electricity standing charge you will incur.
Here’s a breakdown of the different tariff types:
| Tariff Type | Typical Standing Charge | Reason |
|---|---|---|
| Fixed Tariff | Medium to High | Supplier incorporates expected annual rises in DUoS and TNUoS charges into quotes. |
| Variable Tariff | Low to Medium | Supplier can adjust for rises in distribution costs as and when they occur. |
| Prepayment Tariff | High | Covers prepayment meter costs and higher administrative risks for suppliers. |
| Green Business Energy | Medium to High | Supplier may increase standing charges to cover REGO certificate purchases. |
| Out-of-Contract Tariff | Very High | Suppliers incorporate a high margin on top of standing charges for default tariffs. |
Average business energy standing charges
The table below shows average electricity standing charges for different types of commercial properties.
| Property Type | Standing Charge | Annual Cost | Explanation |
|---|---|---|---|
| Domestic property | 40 - 70p/day | £150 - £250 | Regional cap applied by the energy price cap. |
| Small commercial property (up to 5,000 kWh annual consumption) | 40 - 70p/day | £150 - £250 | Incurs similar distribution costs to a domestic tariff. |
| Medium commercial property (50,000 kWh annual consumption) | 70 - 110p/day | £250 - £400 | TNUoS and DUoS charges rise with additional consumption. |
| Commercial property with half-hourly meter (100 kW max. power demand) | £6 - £13/day | £2,200 - £4,700 | TNUoS charges are significantly higher for half-hourly (HH) meters. |
Source: Published 2024/25 DUoS and TNUoS standing charges.
Each property type has a large range because individual quotes depend on location, current tariff type, and the supplier’s margin.
Are there any no-standing charge deals left for businesses?
Yes, some suppliers do offer no-standing-charge business energy contracts. One prominent example is Octopus Business Energy.
In a no-standing-charge tariff, a supplier will charge a significantly higher business electricity prices per kWh to cover the fixed costs they incur.
Compare business energy prices today to search the market for the best no-standing-charge tariffs available to your business.
Why businesses have to pay electricity standing charges
Business electricity tariffs typically include a daily standing charge, with small business energy standing charges starting at approximately 40p/day.
This is similar to the household standing charge incurred under the energy price cap.
This fee represents the minimum fixed costs incurred using Britain’s national and regional electricity distribution networks.
Getting a no-standing-charge business electricity tariff is possible, but this will result in a significantly more expensive unit rate.
Strategies to reduce business electricity standing charges
Unlike unit rates for energy consumption, reducing business electricity standing charges can be challenging since they represent fixed costs for maintaining and delivering electricity to your property.
However, here we outline three different strategies for reducing business electricity standing charges.
Disconnect redundant connections
Off-grid energy solutions, such as commercial solar panels, batteries, and back-up generators, are increasingly popular, meaning businesses rely less on a connection to the local grid.
Consider whether your business could use these off-grid solutions to avoid paying a business electricity standing charge.
Switch to a more competitive tariff
Each business energy supplier adds a margin to the standing charges of their customer tariffs. Consider using a comparison service or a business energy broker to find a more competitive tariff.
It is straightforward to switch business energy suppliers and take advantage of a more competitive tariff.
Optimising your connection
Consider conducting a business energy audit to review and optimise your business electricity connections. Recommended changes could include:
- Reducing your Maximum Import Capacity.
- Consolidating multiple meters at the same site.
- Replacing a half-hourly meter with a smart meter.