Building contractor energy suppliers, tariffs and costs

Builder and contractor businesses depend heavily on energy to power tools, equipment, and site operations, making energy considerations crucial for maintaining efficiency and managing costs. The nature of construction work involves a mix of on-site activities and potentially mobile operations, which can lead to varied energy needs. Understanding these energy demands and effectively managing energy consumption can have a significant impact on a business's bottom line. YourUtilities.co.uk helps builders and contractors navigate the complexities of energy tariffs, ensuring they find the most suitable options for their unique operational requirements.

How much does energy cost for a building contractor?

There is no published price list for builders and contractors. What a building contractor pays is set mainly by how much it uses in a year, because suppliers price by consumption band, and then by contract length, meter type, payment method and credit history. The most recent government figures (first quarter of 2026, provisional) put the average unit price paid by UK non-domestic customers at 24.14p per kWh for electricity and 5.17p per kWh for gas, including the Climate Change Levy and excluding VAT. A year earlier the averages were 25.74p and 5.54p. The smallest sites pay the most per unit: businesses using under 20,000 kWh of electricity a year averaged 35.02p per kWh, and those using under 278,000 kWh of gas averaged 7.48p 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 30 June 2026. Q1 2026 figures are provisional; next update 29 September 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.

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. A site using 15,000 kWh of electricity a year sits in the very small band: 15,000 × 35.02p is about £5,250 a year, or roughly £440 a month before VAT. A site using 60,000 kWh of gas a year: 60,000 × 7.48p is about £4,490 a year, or roughly £375 a month. Because the smallest band pays a much higher unit rate, a building contractor that moves into the next band by growing, or that sits near a band boundary, can see its per-unit price change noticeably at renewal.

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. Where a site is mixed, 60% or more qualifying use means the whole supply is charged at 5%; 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) and gov.uk VAT rates.

Is a building contractor a microbusiness?

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 builders and contractors 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 builders and contractors?

No supplier specialises in builders and contractors or publishes tariffs specific to them. The cheapest supplier for one business is often not the cheapest for the next, because each prices on the consumption band, 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 any out-of-contract rate before signing.

Energy usage profile for Builder and contractor

Builders and contractors typically have fluctuating energy needs depending on the scale and nature of their projects. Energy consumption is often higher during peak construction phases when power tools, machinery, and temporary site accommodations are in full use. Portable generators might be used on sites without a grid connection, further influencing energy patterns. Understanding the cyclical nature of energy use in construction can help businesses align their energy contracts with their operational phases, ensuring they are not overpaying during less intensive periods.

What affects bills for Builder and contractor

Several factors can influence energy bills for builder and contractor businesses:

• Seasonal demand variations as projects scale up or down.
• The efficiency of machinery and equipment used on-site.
• Use of temporary power solutions like generators.
• Energy supplier tariffs and contract terms.
• Site location and access to grid connections.

How to compare tariffs

When comparing energy tariffs, builders and contractors should consider the following checklist:

• Analyse current and projected energy usage patterns.
• Look for flexible contracts that accommodate business fluctuations.
• Consider tariffs with off-peak rates if applicable.
• Evaluate the benefits of fixed versus variable rate contracts.
• Check for any additional services or support offered by suppliers.

Gas vs electricity considerations

For builders and contractors, electricity is often the primary energy source due to its role in powering tools and equipment. However, gas may also play a role, particularly for heating and on-site facilities. The choice between gas and electricity can depend on the specific needs of a project and the infrastructure available. Understanding the balance between these energy sources helps optimise operational efficiency and cost-effectiveness.

Switching process overview

Switching energy suppliers can be straightforward for builders and contractors by following these steps:

1. Review your current energy contract and note the end date.
2. Compare alternative tariffs and suppliers on YourUtilities.co.uk.
3. Contact the chosen supplier to initiate the switch.
4. Provide any necessary meter readings for a smooth transition.
5. Confirm the switch date and ensure there are no disruptions 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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