Cafe and coffee shop energy suppliers and costs

Running a cafe involves juggling various costs, and energy is a significant component. Whether you're brewing coffee, preparing meals, or creating a cozy atmosphere, energy usage is at the heart of your operations. Understanding your energy needs can help streamline your expenses and enhance efficiency. As cafes typically operate for long hours and use a variety of equipment, choosing the right energy plan is crucial. Careful management of energy consumption can lead to improved cost management, allowing you to focus more on serving your customers and growing your business.

How much does energy cost for a cafe?

There is no published price list for cafes. What a cafe 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 cafes?

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 cafes 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 cafes?

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

Cafes are energy-intensive businesses due to their reliance on various electrical appliances and equipment. Typical energy usage patterns include the operation of coffee machines, refrigerators, ovens, and lighting, which often run for extended hours. The need to maintain a comfortable climate for customers also contributes to energy consumption, with heating or cooling systems often in use. Understanding these patterns can help cafe owners identify areas where efficiency can be improved, leading to potential cost reductions.

What affects energy bills for cafes

Several factors can influence energy bills for cafes:

• Opening hours: Longer operating hours increase energy consumption.
• Equipment efficiency: Older or less efficient appliances consume more energy.
• Seasonal demand: Heating and cooling needs vary with the seasons.
• Number of staff and customers: More people means more energy usage.
• Energy tariffs: The type of contract and rates affect costs.

How to compare tariffs

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

• Review current energy consumption patterns.
• Identify peak usage times and equipment.
• Compare fixed vs variable rate tariffs.
• Consider renewable energy options.
• Check contract length and any exit fees.
• Evaluate customer service and support.

Gas or electricity: what matters most

Cafes primarily rely on electricity for equipment like coffee machines and refrigerators, but gas can be crucial for cooking and heating. While electricity is essential for day-to-day operations, gas usage may vary depending on the specific services offered. Balancing both utilities effectively can lead to more efficient energy management and improved cost management.

How switching works

Switching energy suppliers for your cafe can be straightforward if you follow these steps:

1. Review your current energy contract terms.
2. Gather usage data from recent bills.
3. Research and compare available tariffs.
4. Contact potential new suppliers for quotes.
5. Notify your current supplier of your intention to switch.
6. Coordinate the switch date to avoid service disruption.

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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