Business energy for care homes

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

Start with VAT, not with rates

Residents live in the building, so the majority of the energy is domestic use. At 60% or above, the entire supply goes to 5% VAT with no Climate Change Levy at 0.801p per kWh. Most homes qualify comfortably. It is claimed with a one-page declaration to the supplier and can be backdated up to four years.

This is the single most commonly missed saving in the sector, usually because everyone assumed it had been dealt with when the home opened. Check it before you price anything — try the eligibility checker or read the VAT and CCL guide.

Why the load shape matters

A care home runs continuously: heating and hot water around the clock, laundry, catering, lifts, call systems and lighting with no weekend drop-off. That gives a high load factor, which suppliers generally like — it is predictable volume. Suppliers who price it as what it is, rather than against a default small-business profile, come back keener.

Larger homes and groups will be on half-hourly meters, where the market band runs 19–24p per kWh against 22–30p per kWh for standard business meters. See half-hourly vs non-half-hourly meters.

Where costs hide in this sector

• Hot water and heating losses. Continuous demand means continuous losses. Insulation on pipework and calorifiers, and correct control settings, pay back faster here than almost anywhere.
• Laundry. Often the largest single load after heating, and often running outside optimal hours for no operational reason.
• Standing charges across a group. At 45–65p a day a day per meter, a dozen sites is real money before a single unit is consumed.
• Lapsed contracts on newly acquired homes. Acquisitions arrive on deemed rates at 35–45p per kWh and stay there until someone notices.

Before your next renewal

1. Confirm the VAT rate on every site's bill, individually.
2. Register residents who need it on the network operator's Priority Services Register — that is free and sits with the network company, not the supplier.
3. Get twelve months of consumption per site, half-hourly where it exists.
4. Price the group on one day, with the load shape explained, and compare total annual cost rather than unit rates.

More on how suppliers differ for this sector: business energy suppliers compared for care homes.

What a care home typically uses

We publish consumption benchmarks only where we can stand behind the figure, and the honest answer for this sector is that the spread between sites is wide enough that a single national average would mislead you more than it helped. Building age, occupancy, plant and hours drive far more variation than sector does.

What is useful is your own number against comparable sites. Send us twelve months of bills for one site and we will tell you where it sits — free, and with no obligation to do anything about it.