Agricultural farm energy suppliers, tariffs and costs

For agricultural farms, energy consumption is a critical operational consideration. The sector's reliance on machinery, irrigation systems, heating for livestock, and other energy-intensive processes means that efficient energy management can greatly impact the overall cost structure of the business. With varying energy needs depending on the season and type of farming, agricultural businesses must carefully evaluate their energy usage to ensure sustainability and cost-effectiveness. As environmental concerns grow, renewable energy sources and energy-saving technologies are becoming increasingly important to modern farming practices. Understanding the unique energy requirements of your agricultural business can help in choosing the right energy strategy.

How much does energy cost for an agricultural farm?

There is no published price list for agricultural farms. What an agricultural farm pays depends on how much it uses in a year, when it agreed its contract and for how long, wholesale prices at that time, the standing charge, meter type, payment method and credit history. The most recent government figures, for the second quarter of 2026 (April to June, provisional), put the average price paid by UK non-domestic customers at 24.51p per kWh for electricity and 5.28p per kWh for gas, including the Climate Change Levy and standing charges and excluding VAT. A year earlier the averages were 24.03p and 5.31p. Smaller users typically pay more per unit: businesses using under 20,000 kWh of electricity a year averaged 38.36p per kWh, and those using under 278,000 kWh of gas averaged 9.31p per kWh.

Source: Department for Energy Security and Net Zero, Prices of fuels purchased by non-domestic consumers in the UK (Quarterly Energy Prices tables 3.4.1 and 3.4.2), published 29 September 2026. Q2 2026 figures are provisional; next update 17 December 2026. Prices are fully delivered averages including the Climate Change Levy and all other elements except VAT, so standing charges are already spread across the units. Averages across every UK business in a band, not quotes, and not comparable with a supplier’s unit rate.

Working out a monthly figure for your business

Take the annual kWh from your latest bill or annual statement, find the band above and multiply for a rough benchmark. A site using 15,000 kWh of electricity a year sits in the very small band: 15,000 × 38.36p is about £5,750 a year, or roughly £480 a month before VAT. A site using 60,000 kWh of gas a year: 60,000 × 9.31p is about £5,590 a year, or roughly £465 a month. The bands are statistical groupings used by the government, not supplier price breaks, so treat them as a guide to what similar-sized sites paid rather than a price you will be offered. To judge an actual quote, compare its total annual cost (unit rate × your annual kWh, plus the daily standing charge × 365) with what you pay now.

VAT and the Climate Change Levy on business energy

The prices above exclude VAT. Business energy normally carries VAT at 20% plus the Climate Change Levy (CCL). HMRC applies the 5% reduced rate, with no CCL, in three cases. First, low usage: supplies averaging no more than 33 kWh of electricity a day (1,000 kWh a month) or 145 kWh of gas a day (4,397 kWh a month) are treated as domestic use whoever the customer is. Second, fuel and power for domestic use, which HMRC defines to include homes providing care for the elderly or disabled, children’s homes, hospices and school or university residential accommodation. Third, a charity’s non-business activities. From 1 October 2026 to 31 March 2027, electricity that qualifies for the reduced rate is charged at 0% VAT instead of 5% in England, Scotland and Wales; qualifying gas stays at 5%, qualifying electricity in Northern Ireland stays at 5%, and electricity returns to 5% from 1 April 2027. HMRC has not changed which supplies qualify or the certificate process; the same rules decide whether a supply gets 0% or 20%. Where a site is mixed, 60% or more qualifying use means the whole supply gets the reduced rate; below that the supply is split between the two rates, and the customer gives the supplier a certificate declaring the qualifying percentage. Source: HMRC VAT Notice 701/19 (sections 2.8, 3.2 to 3.5, 4.2 and 5.2, updated 5 February 2025), gov.uk VAT rates and HMRC Revenue and Customs Brief 10 (2026).

Do Ofgem’s microbusiness protections apply to agricultural farms?

Ofgem treats a business as a microbusiness if it has fewer than 10 employees (or their full-time equivalent) and an annual turnover or balance sheet total of no more than £2 million, or if it uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year. A business can be a microbusiness for one fuel and not the other. Independent agricultural farms that meet either test are covered by Ofgem’s microbusiness rules, which give extra protections around contract terms and renewals (Ofgem: get energy for your business).

Do business energy rates vary by region?

Yes. Part of every unit rate covers the cost of the local electricity distribution network, and Great Britain has 14 licensed distribution areas each with its own charges, so identical contracts are priced differently in, for example, the north of Scotland and London. DESNZ does not publish non-domestic prices by region, so regional figures quoted elsewhere are supplier or broker estimates rather than official statistics.

Which energy supplier is best for agricultural farms?

There is no single answer. Suppliers price business contracts individually rather than publishing standard tariffs for agricultural farms, so the cheapest supplier for one business is often not the cheapest for the next: each prices on the consumption, meter type, contract length and credit profile in front of it. Compare the total annual cost of like-for-like contract lengths rather than the headline unit rate, and check the standing charge and what happens when the contract ends before signing.

How agricultural farms use energy

Agricultural farms typically have a diverse energy usage profile, with demands fluctuating throughout the year. Energy consumption is influenced by the type of farming activity, such as crop production or livestock management. Equipment like tractors, irrigation systems, and heating for barns all contribute to energy use. Seasonal activities, such as planting or harvesting, can lead to spikes in energy demand. Moreover, farms using greenhouses or processing their produce on-site may have additional energy requirements. Understanding these patterns is crucial for managing costs and ensuring efficient energy use.

What affects energy bills for agricultural farms

Several factors can affect the energy bills for agricultural farms, including:

• Type of farming operation (e.g., arable, livestock, mixed farming)
• Size of the farm and the scale of operations
• Seasonal variations and weather conditions
• Efficiency of machinery and equipment
• Use of renewable energy sources such as solar panels
• Energy tariffs and contract terms

How to compare tariffs

When comparing energy tariffs for an agricultural farm, consider the following checklist:

• Assess your current energy usage and patterns
• Identify your peak and off-peak usage times
• Research available tariffs and contract terms
• Consider the benefits of fixed vs variable rates
• Explore renewable energy options and incentives
• Check for any early termination fees on existing contracts

Gas or electricity: what matters most

For agricultural farms, the decision between gas and electricity largely depends on the specific needs of the business. Electricity is often used for lighting, running machinery, and powering irrigation systems, while gas may be used for heating and hot water. The choice may also be influenced by the availability of resources and the infrastructure on the farm. Renewable energy sources such as solar and wind can also supplement or replace traditional energy sources, reducing reliance on gas and electricity.

How switching works

Switching energy suppliers for an agricultural farm can be straightforward. Follow these steps:

1. Review your current energy contract and note the end date
2. Gather your farm's energy usage data
3. Research potential energy suppliers and tariffs
4. Contact the chosen supplier to initiate the switch
5. Ensure there are no interruptions in energy supply during the transition
6. Confirm the switch completion and monitor your first bill for accuracy

More business energy guides

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