10 ways to cut business energy costs in 2026

Last reviewed 2 September 2026 by Utilities Made Simple · independent, whole-of-market, supplier-paid — how we are paid

Ordered by return on effort, not by how interesting they are. The first four are administrative and cost nothing. The rest need money or management time.

The four that cost nothing

1. Never let a contract lapse

Out-of-contract and deemed rates commonly run 35–45p per kWh for electricity, against 22–30p per kWh for a new fixed SME contract. On 50,000 kWh a year that gap is several thousand pounds. Nothing else on this list is worth as much for as little effort. Put the end date in a calendar — our contract end-date reminder does it in a minute.

2. Check your VAT rate

If your site uses less than 33 kWh a day of electricity, or 60% or more of the energy is domestic, or you are a charity using energy for non-business purposes, you should be on 5% VAT with no Climate Change Levy. That is a 15% reduction plus 0.801p per kWh — and it is reclaimable four years back. Try the eligibility checker.

3. Right-size your available capacity

Half-hourly sites pay every month for the kVA they have agreed, whether they use it or not. Plant gets replaced with more efficient equipment, production moves, shifts change — and the capacity stays where it was set years ago. Twelve months of half-hourly data shows your true peak. See capacity charges and kVA explained.

4. Get actual meter readings

Estimated billing hides both overcharging and genuine consumption problems, and produces catch-up bills that look like price rises. Submit reads, or push for a smart or AMR meter, and check the read type marker on every bill.

The four worth management time

5. Find your overnight baseload

Look at consumption between 1am and 5am on a Sunday. Whatever that number is, it is running every hour of the year. On most sites it is bigger than anyone expects, and the cause is usually identifiable within an hour of walking round: compressors, extraction, display lighting, an old chiller, IT equipment that never sleeps.

6. Shift flexible load out of the red band

Half-hourly sites pay dramatically more for distribution during red-band periods — typically late afternoon on winter weekdays. Charging, heating water, running batch processes or loading dishwashers outside those hours costs nothing to change and reduces the network element directly.

7. Fix the controls before you buy equipment

Heating and cooling fighting each other, timers set for an occupancy pattern that changed two years ago, thermostats at 24 degrees, doors propped open on a heated shop front. Controls and settings are free and are routinely worth more than the next capital project.

8. Consolidate multi-site contracts and stagger the end dates

Multi-site organisations often have sites on five different suppliers with five different end dates, several of them lapsed. Bringing them onto one contract improves the price and makes the admin possible. Staggering renewal dates across the year spreads market risk better than trying to time it.

The two capital measures

9. LED lighting, where it is still not done

Unglamorous and largely finished in most businesses, but still outstanding in plenty of warehouses, workshops and back-of-house areas. Payback depends entirely on running hours: 24-hour areas pay back fast, a stockroom used twice a day does not.

10. Solar, if the roof and the load profile suit

Generation is worth most where you use the power yourself rather than exporting it, so a business with a heavy daytime load and a large south-facing roof is the strong case. Get a proper survey and model it against your actual half-hourly consumption, not against an annual total. Anyone quoting a payback without your consumption data is guessing.

What we would do first

Points 1 and 2, this week, from a single bill. They take under an hour between them and neither costs anything. If you would rather not, email a recent bill to info@utilitiesms.co.uk and we will check both and tell you what we find — including if the answer is that your deal is already good.