Few line items hit a UK SME’s bill harder than a business electricity deemed rate. Deemed rates are the supplier’s default tariff applied automatically when there is no signed contract — after a move-in, a contract end date, or a missed renewal — and they are deliberately priced to be uncomfortable. Across the 25 suppliers in this guide, 2026 deemed unit rates range from 32p/kWh at the cheapest (Pozitive Energy and Yu Energy) to 45p/kWh at the most expensive (BES Utilities, Utilita Business), with standing charges of 60-95p/day stacked on top.
If you suspect you’re on one — or just got a renewal letter quoting numbers in this band — you can usually leave inside 28 days and lock a fixed rate that is 30-50% cheaper. Run a free 60-second business energy quote to see what you’d actually pay on a fixed contract, then read on for the full supplier-by-supplier breakdown and the practical exit playbook.
What is a business electricity deemed rate?
A “deemed contract” is the contract you’re deemed to have accepted by drawing electricity from the grid without signing a formal supply agreement. Suppliers are legally required to keep the lights on whether you’ve signed paperwork or not, but the price they charge in that grey zone is set by them, not negotiated by you.
Deemed rates apply in three common situations:
- You moved into new premises and inherited the previous occupier’s incumbent supplier without a contract of your own.
- Your fixed contract ended and you didn’t sign a renewal — you “rolled over” onto an out-of-contract or deemed rate.
- Your supplier failed and Ofgem moved you to a Supplier of Last Resort (SoLR), which applies a deemed rate while you decide your next move.
For a deeper dive on the legal status of these contracts, see our business energy deemed contracts guide. The single most important thing to remember: a deemed contract has no minimum term. You can leave with as little as 28 days’ notice, every single day of the year.
Why deemed rates exist (and why they’re so high)
Deemed rates aren’t a punishment — they’re a risk premium. The supplier doesn’t know how long you’ll stay, can’t hedge wholesale exposure for an unknown volume, and may be supplying you on near-zero credit information. To cover that risk, they price the deemed rate above their fixed-contract book, typically 30-50% above the cheapest fixed-rate offer they could otherwise quote you.
Ofgem requires deemed rates to be “no more than is reasonable” but does not impose a price cap on non-domestic users (unlike the household market). That is why deemed rates spread so widely between the 25 suppliers below, with the highest 30-40% above the cheapest. If you’re inside a deemed window, every day costs real money.
The 25-supplier business electricity deemed rate table (2026)
Quotes below are typical 2026 deemed rates for a single-rate (Profile Class 03/04) commercial meter at SME usage levels. Your exact rate may vary by region, meter type and supplier credit policy — always check your most recent bill.
Indicative deemed rates as observed across Q1 2026 supplier sample bills. Always confirm with the unit-rate line on your latest invoice.
How to leave a deemed contract in 28 days
Unlike a fixed contract — which can lock you in for one to five years with eye-watering exit fees — deemed contracts have no minimum term. The supplier must release you on 28 days’ notice. Here is the playbook:
- Pull a current bill showing your MPAN (the 21-digit number on the front), supplier name, and the words “deemed”, “out-of-contract” or “out of contract” somewhere on it.
- Sign a Letter of Authority (LOA) with the broker or comparison service you want to handle the switch. Without it, suppliers will only quote estimates — not the real rates that come from your historic consumption data.
- Run a market comparison against every UK supplier, not just the four to five household names. Sort quotes by total annual cost, not unit rate alone.
- Sign the new contract. The new supplier issues a 28-day notice termination to the old supplier on your behalf. Switch dates land on the next available meter-reading slot inside the window.
- Submit a final meter read on switch day to your old supplier. This stops them billing you on deemed past the cutover.
Total elapsed time from signing the LOA to your first invoice on the new fixed rate: 28-35 days in 95% of cases. For a deeper how-to, see our switch business energy guide.
The 30-50% savings: real numbers
Here is what the deemed-versus-fixed gap looks like in cash for a typical SME drawing 30,000 kWh/year:
That is one switch, one signature, one half-hour of work. For larger users, the cash saving scales linearly — a 200,000 kWh business often saves £25-40k/year on the same exit. See our regional comparison in business electricity rates by region UK 2026 if you want to see how the gap varies by DNO area.
Real supplier escape examples
Patterns we’ve seen in 2025-26 client switches:
- Manchester restaurant, British Gas Business deemed at 42.5p/kWh: moved to Yu Energy 24-month fix at 22.4p. Annual saving on 22,000 kWh: £5,140.
- Leeds dental practice, ScottishPower Business deemed at 43.1p/kWh: moved to Pozitive Energy 36-month fix at 21.8p. Annual saving on 28,000 kWh: £7,328.
- Bristol micro-brewery, EDF Business deemed at 41.8p/kWh: moved to Crown Gas & Power 24-month fix at 21.5p. Annual saving on 65,000 kWh: £15,200.
- London office, BES Utilities deemed at 44.5p/kWh: moved to Smartest Energy 36-month fix at 22.0p. Annual saving on 45,000 kWh: £11,500.
- Glasgow bakery, Utilita Business deemed at 43.5p/kWh: moved to Octopus Energy for Business 24-month fix at 22.6p. Annual saving on 18,000 kWh: £4,150.
What if the supplier won’t release you?
By statute, suppliers cannot block a switch out of a deemed contract on grounds of contract duration — there isn’t one. The two valid reasons they can object are:
- Outstanding debt. If the deemed bill is in arrears, the supplier can object until the debt is cleared. Pay the outstanding amount or set up a payment plan, then re-issue the switch request.
- Wrong meter / mismatched MPAN. Industry data sometimes lags reality at change-of-tenancy. If you’ve just moved in, file a change-of-tenancy form first to get the meter into your name.
Anything else — “minimum term”, “renewal already issued”, “exit fees apply” — is not valid on a true deemed contract and can be escalated to the Energy Ombudsman free of charge.
Deemed vs out-of-contract: are they the same?
Often confused, slightly different. A deemed contract applies when you’ve never had a written contract with the supplier (typically after a move-in). An out-of-contract rate applies when your fixed contract expired and you didn’t renew. Pricing is similar — both sit in the 32-45p/kWh band — but out-of-contract may have stricter notice terms in the small print. Check the contract end date on your last fixed-rate paperwork.
Mistakes to avoid when leaving a deemed contract
- Don’t accept the supplier’s “renewal” quote at face value. Out-of-deemed renewal quotes from incumbents are usually 3-7p/kWh above the open market.
- Don’t sign without an LOA-driven comparison. Estimated quotes are typically 1-2p/kWh worse than real-data quotes.
- Don’t pick the lowest-credit-rated supplier just for the price. If they fail mid-contract, the SoLR transfer dumps you back on a deemed rate.
- Don’t ignore the standing charge. A 35p/kWh deal with a 95p/day standing charge can lose to a 38p/kWh deal at 60p/day on a small meter.
- Don’t forget VAT and CCL. Make sure your new contract has the right VAT rate (5% if eligible) and CCL exemptions applied. See our VAT on business energy bills guide.
Bigger picture: the wider 2026 market
If your business is sitting on deemed because of a recent move-in or an expired contract, the right next move is a market-wide comparison. Our business energy comparison guide explains the SME comparison process; our cheapest business energy guide ranks the most-quoted-cheapest fixed-rate suppliers per usage band; and our pillar UK business electricity 2026 guide walks through the full procurement lifecycle from market analysis to invoice validation.
Also known as
UK businesses search for this topic with many phrases. Whether you call it business electricity deemed rates, deemed contract electricity rates, or out-of-contract electricity rates, this guide covers the same underlying tariff family.
We see the same intent expressed as deemed business electricity prices, commercial deemed electricity rates, default business electricity tariff, no-contract electricity for business, rolled-over business electricity rates, SoLR business electricity rates, and change of tenancy electricity rates. The decision is the same: how do I leave the deemed rate fast and lock in a fixed price 30-50% cheaper.
Ready to compare? Run a free 60-second business energy comparison covering every UK supplier, or call 0333 015 2615 to speak to a UK-based energy advisor.
Frequently Asked Questions
Deemed rates are the default tariff applied when a business uses electricity without a signed contract — usually after moving in or letting a contract lapse. In 2026 they range from 32p/kWh (cheapest, e.g. Pozitive Energy) to 45p/kWh (most expensive, e.g. BES Utilities), with standing charges of 60-95p/day on top.
Sign a Letter of Authority with a broker, run a market comparison, sign a new fixed contract, and the new supplier issues a 28-day termination notice on your behalf. Total elapsed time is usually 28-35 days. Deemed contracts have no minimum term, so the supplier cannot legally hold you in.
Most SMEs save 30-50% by switching off deemed onto a properly negotiated fixed contract. On a 30,000 kWh business that is roughly £6,000-7,000 per year. On 200,000 kWh it’s typically £25-40k per year.
Only on two valid grounds: outstanding debt or a meter / MPAN data mismatch. Anything else — “minimum term”, “renewal already issued”, “exit fees apply” — is not lawful on a true deemed contract and can be escalated to the Energy Ombudsman.
Closely related, slightly different. Deemed applies when you have never signed a contract with the supplier (move-in scenarios). Out-of-contract applies when a fixed contract expired and you didn’t renew. Pricing sits in the same 32-45p/kWh band, but out-of-contract may have specific notice terms in the original paperwork.
BES Utilities at 44.5p/kWh and Utilita Business at 43.5p/kWh tend to be the most expensive deemed contracts in 2026, followed closely by ScottishPower Business at 43.1p/kWh and British Gas Business at 42.5p/kWh. The cheapest deemed rate in our sample is Pozitive Energy at 32.4p/kWh.
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