“Tariff” is one of the most loaded words in UK business energy. To suppliers it means a specific contract structure with defined price-setting rules; to customers it often just means “what unit rate am I on”. This guide explains every business energy tariff type available in the UK in 2026 with the trade-offs of each.
1. Fixed-rate contracts
Unit rate (p/kWh) and standing charge (p/day) are agreed at the start and locked for the contract term — typically 12, 24, 36, 48 or 60 months. Your prices do not change for the life of the contract regardless of what wholesale electricity does.
Best for: SMEs (under 100k kWh/year) wanting price certainty.
2. Flexible / variable contracts
Multi-year framework where unit rates track wholesale movements monthly or quarterly. The supplier hedges on your behalf and adjusts your price.
Best for: sophisticated mid-large buyers (over 1 GWh/year) with risk appetite.
3. Pass-through contracts
You pay the wholesale unit rate plus each non-commodity cost as a separate transparent line item. Highest level of cost visibility.
Best for: large I&C buyers (over 5 GWh/year) with internal energy expertise.
4. Deemed-rate contracts
The default tariff a supplier puts you on if you move into a premises and have not signed a contract. Deemed rates are usually 50-80% above market. See our deemed contracts guide.
5. Out-of-contract / rollover
The tariff your supplier moves you to if you let your fixed contract expire without signing a new one. Like deemed rates, these are punitive. Ofgem rules from 2024 give you 30 days to switch off rollover tariffs without exit fees.
Other tariff variants
Green / renewable tariffs
Variant of any of the above where the electricity is matched with REGOs or sleeved from a named renewable generator. See our renewable energy guide.
Time-of-use tariffs
Different unit rates for different times of day. Basic version is Economy 7 (off-peak overnight rate). HH-settled tariffs typically have multi-band time-of-use pricing with red/amber/green windows. See our Economy 7 for business guide.
No-standing-charge tariffs
Higher unit rate but no daily standing charge. Suits very low-volume sites where the standing charge dominates the bill. See our no-standing-charge tariffs guide.
Smart fixed tariffs
Fixed unit rate with a small variable component — usually a “trigger” if BSUoS or wholesale spikes outside an agreed band. Less common in 2026 than during the 2022-23 crisis.
Which tariff is cheapest?
Generalising:
- Under 100k kWh/year: 24-month fixed contract usually cheapest.
- 100k-1m kWh/year: 12-36 month fixed or flexible (depends on wholesale curve).
- Over 1m kWh/year: pass-through or flexible usually cheapest because supplier margin is smaller and you control hedging.
Also known as
UK business electricity tariffs (also called business electricity plans, commercial electricity tariffs or business electric tariffs) come in fixed, variable, deemed and pass-through formats. Smaller premises searching small business electricity tariffs see the same product mix at lower volumes.
When deciding the best business electricity tariff, the choice is rarely about brand — it is fixed-vs-variable, contract length, exit fees and renewal terms. The same logic applies whether the supplier calls it a “tariff”, a “plan” or a “contract”.
Frequently Asked Questions
Fixed-rate contracts dominate the SME market. Roughly 80% of UK businesses under 100k kWh/year are on a 12-36 month fixed tariff.
Sometimes — flexible tariffs let you benefit from falling wholesale prices, but expose you to rises. On average they slightly under-perform fixed tariffs over a full cycle, but for active buyers who time the market they can deliver 1-2p/kWh of saving.
Deemed-rate contracts and out-of-contract / rollover tariffs are the most expensive on the market — typically 50-80% above a properly negotiated fixed contract. Both are avoidable with timely contract management.
Generally no — fixed-rate contracts charge an early-termination fee equal to the remaining unit rate × estimated remaining usage. Switching mid-contract only makes sense if savings significantly outweigh the exit fee.
A fixed-rate contract with a small variable component triggered if specific wholesale or non-commodity components move outside an agreed band. Less common in 2026 than during the 2022-23 energy crisis when wholesale uncertainty was high.
Want to see which tariff suits your meter? Get a free 60-second business energy quote covering fixed, flexible and pass-through options.
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