Bakery energy suppliers, tariffs and costs

Running a bakery involves a variety of energy needs that can impact your overall business costs. From ovens to refrigerators, a bakery requires a reliable and efficient energy supply to ensure the smooth operation of daily activities. Understanding the energy needs of your bakery and how they influence your bottom line is crucial. Energy consumption in a bakery is influenced by various factors such as the size of your operations, the type of equipment you use, and your opening hours. By comparing different energy tariffs, you can find the most cost-effective solution tailored to your business's unique requirements.

How much does energy cost for a bakery?

There is no published price list for bakeries. What a bakery 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 bakeries?

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 bakeries 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 bakeries?

There is no single answer. Suppliers price business contracts individually rather than publishing standard tariffs for bakeries, 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 bakeries use energy

Bakeries typically have a high energy usage profile due to the necessity of operating equipment like ovens, mixers, and refrigeration units. These appliances are often used simultaneously and continuously during business hours, contributing to a significant portion of a bakery’s energy consumption. Additionally, lighting and heating or cooling systems further add to the energy demands. Understanding the peak times of energy usage can help bakeries manage consumption more efficiently, potentially leading to improved cost management through better tariff selection and energy management practices.

What affects energy bills for bakeries

Several factors influence the energy costs for bakeries, including:

• Type and efficiency of equipment used, such as ovens and refrigerators.
• Operational hours and whether the bakery operates late into the evening or early morning.
• Building insulation and energy efficiency measures in place.
• Seasonal variations affecting heating or cooling needs.
• Energy tariff type and supplier terms and conditions.

How to compare tariffs

When comparing energy tariffs for your bakery, consider the following checklist:

• Review your current energy usage and identify peak consumption periods.
• Research different suppliers and their specific offers for businesses.
• Check the terms and conditions, including contract length and exit fees.
• Consider any additional services offered, such as energy efficiency advice.
• Evaluate whether a fixed or variable tariff suits your business needs better.

Gas or electricity: what matters most

In bakeries, both gas and electricity are integral to operations. While electric ovens and mixers are common, gas ovens are often preferred for baking due to their precise temperature control and cost efficiency. Electricity is crucial for running refrigeration units, lighting, and other electronic equipment. Deciding between gas and electricity often depends on your specific equipment needs and the costs associated with each energy type in your area.

How switching works

Switching energy providers for your bakery involves the following steps:

1. Gather your current energy usage data and contract details.
2. Compare different energy suppliers and tariffs.
3. Select the best tariff that meets your needs and apply for the switch.
4. Your new supplier will arrange the switch and inform your current provider.
5. Confirm the switch date and ensure a smooth transition with no disruption to your service.

More business energy guides

Return to our business energy hub to explore guides for other industries, or go directly to our business gas or business electricity pages.

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