Car dealership energy suppliers, tariffs and costs

Car dealerships in the UK face unique energy challenges due to the nature of their operations. With large indoor and outdoor spaces requiring lighting, heating, and cooling, as well as the need for electricity to power office equipment and services, energy consumption is a significant concern. Additionally, as the automotive industry shifts towards electric vehicles, dealerships must also consider charging infrastructure, which adds another layer of complexity to their energy needs. By understanding their energy usage and exploring tailored energy solutions, car dealerships can optimise their energy efficiency and reduce operational costs.

How much does energy cost for a car dealership?

There is no published price list for car dealerships. What a car dealership 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 car dealerships?

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 car dealerships 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 car dealerships?

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

Car dealerships typically experience high energy consumption due to their extensive lighting requirements, both indoors and outdoors. Showrooms must be well-lit to display vehicles effectively, while outdoor forecourts also require significant lighting, especially during evening hours. Additionally, dealerships use energy for heating and cooling large spaces to create a comfortable environment for customers and staff. Office spaces within the dealership contribute to energy usage with computers, telecommunication systems, and other office equipment. As dealerships increasingly incorporate electric vehicle charging stations, their electricity consumption is likely to rise, making energy management crucial.

What affects energy bills for car dealerships

Several factors can influence the energy bills for car dealerships, including:

• Size of the dealership: Larger spaces require more energy for lighting, heating, and cooling.
• Operating hours: Extended working hours can lead to higher energy usage.
• Type of lighting: Energy-efficient LED lighting can manage costs effectively.
• Heating and cooling systems: Inefficient systems can increase energy consumption.
• Electric vehicle charging: Installing charging stations can significantly impact electricity usage.
• Energy tariffs: The choice of energy tariff can affect overall costs.

How to compare tariffs

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

• Assess your current energy usage patterns to understand your needs.
• Check if the tariff offers flexibility for future expansion or additional EV chargers.
• Compare fixed-rate and variable-rate tariffs to determine the best fit for your budget.
• Look for tariffs that offer renewable energy options if sustainability is a priority.
• Consider the reputation and customer service quality of potential suppliers.
• Review contract terms, including duration and exit fees, to avoid unexpected costs.

Gas or electricity: what matters most

For car dealerships, electricity is often more critical than gas, primarily due to the need for extensive lighting, office equipment, and increasingly, electric vehicle charging stations. While gas may still be used for heating, particularly in older buildings, the trend towards electrification of the automotive industry means that electricity consumption is likely to dominate. Dealerships should evaluate their energy needs and consider whether electricity-focused energy solutions, such as renewable energy tariffs or energy efficiency upgrades, might be beneficial.

How switching works

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

1. Review your current energy contract to determine the end date and any exit fees.
2. Compare offers from various suppliers to identify the best tariff for your needs.
3. Contact the new supplier to initiate the switch and provide them with necessary information.
4. Ensure any outstanding bills with your current supplier are settled.
5. Coordinate with both suppliers to ensure a smooth transition with no service interruption.

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