B&B or guesthouse energy suppliers, tariffs and costs

Running a B&B or guesthouse involves unique energy considerations, as these establishments often have varying occupancy rates and diverse energy needs. Energy consumption can be influenced by the number of guests, seasonal changes, and the amenities offered. It is crucial for B&B owners to understand their energy usage patterns and explore ways to optimise efficiency. By comparing business energy tariffs, B&Bs can better manage their operational costs while maintaining comfort and quality service for guests. Whether you are looking to reduce bills, switch suppliers, or make your guesthouse more eco-friendly, understanding your energy usage is key to making informed decisions.

How much does energy cost for a B&B or guesthouse?

There is no published price list for B&Bs and guesthouses. What a B&B or guesthouse 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 B&Bs and guesthouses?

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 B&Bs and guesthouses 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 B&Bs and guesthouses?

There is no single answer. Suppliers price business contracts individually rather than publishing standard tariffs for B&Bs and guesthouses, 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 B&Bs and guesthouses use energy

B&Bs and guesthouses tend to have fluctuating energy usage patterns due to varying guest numbers and seasonal demands. Heating, lighting, and hot water are typically the largest energy consumers, especially during peak tourist seasons. Additionally, facilities such as kitchens, laundry services, and entertainment systems contribute significantly to overall energy consumption. Understanding these patterns can help identify opportunities for energy savings, such as using energy-efficient appliances and implementing smart heating controls.

What affects energy bills for B&Bs and guesthouses

Several factors can influence the energy bills of B&Bs and guesthouses:

• Occupancy rates: More guests generally mean higher energy usage.
• Seasonal changes: Heating and cooling needs vary with the seasons.
• Building age and insulation: Older buildings may require more energy for heating.
• Appliance efficiency: Modern, energy-efficient appliances can reduce consumption.
• Location: Rural settings might have different supply costs compared to urban areas.

How to compare tariffs

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

• Assess your current energy usage and identify peak periods.
• Check contract terms, including duration and exit fees.
• Look for tariffs that suit your business size and occupancy fluctuations.
• Consider green energy options if sustainability is a priority.
• Review customer service ratings and support availability.

By following these steps, you can find a tariff that aligns with your business needs.

Gas or electricity: what matters most

For B&Bs and guesthouses, both gas and electricity play vital roles. Gas is often used for heating and hot water, offering cost-effective solutions during colder months. Electricity powers lighting, appliances, and entertainment systems, which are essential for guest comfort. The balance between gas and electricity usage depends on the specific services offered and the building's infrastructure. Evaluating which energy source is more critical for your operations can guide tariff selection and efficiency improvements.

How switching works

Switching energy suppliers for your B&B can be straightforward with the right approach:

1. Review your current energy contract and note any exit fees.
2. Research and compare new tariffs that fit your business profile.
3. Contact your chosen supplier to initiate the switch.
4. Provide any necessary meter readings and contract details.
5. Ask your new supplier for the confirmed start date; your supply continues while the switch goes through.

By following these steps, you can ensure a smooth transition to a new energy supplier.

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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