Cold storage warehouse energy suppliers, tariffs and costs

Cold storage warehouses are integral to the supply chain, ensuring that perishable goods are kept at optimal temperatures for preservation. These facilities require significant energy input to maintain consistent environmental conditions, making energy management a crucial concern. The demand for electricity is notably high due to the refrigeration systems that must run continuously, and even brief downtime can result in product spoilage. As such, business energy considerations for cold storage warehouses are focused on reliability, efficiency, and cost-effectiveness. Understanding the unique energy usage patterns of these facilities and knowing how to compare energy tariffs can lead to smarter decisions and lower costs.

How much does energy cost for a cold storage warehouse?

There is no published price list for cold storage warehouses. What a cold storage warehouse 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 cold storage warehouses?

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 cold storage warehouses 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 cold storage warehouses?

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

Cold storage warehouses have a unique energy usage profile primarily dominated by the need for constant refrigeration and climate control. The energy demand is mostly consistent throughout the year, with slight variations due to seasonal changes in ambient temperature. These facilities generally operate 24/7 to ensure that perishable goods are stored under optimal conditions, which necessitates a reliable and uninterrupted power supply. Lighting, while important, typically accounts for a smaller portion of overall energy use compared to refrigeration.

What affects energy bills for cold storage warehouses

Several factors can influence the energy bills of cold storage warehouses:

• Energy efficiency of refrigeration equipment
• Insulation quality of the storage facility
• Ambient temperature variations
• Operational hours and intensity
• Tariff type and contract terms with the energy supplier
• Implementation of energy-saving technologies

Managing these aspects can help in controlling energy costs effectively.

How to compare tariffs

When comparing energy tariffs for your cold storage warehouse, consider the following checklist:

• Assess the energy efficiency of your current setup
• Identify peak and off-peak energy usage patterns
• Review contract terms including fixed vs. variable rates
• Check for any additional fees or hidden charges
• Consider the potential for renewable energy sources
• Evaluate customer service and support from providers
• Use online comparison tools for a comprehensive overview

Gas or electricity: what matters most

In cold storage warehouses, electricity is the primary energy source due to the demands of refrigeration systems. Gas may be used for any auxiliary heating requirements, but its role is generally secondary. Electricity tariffs, therefore, have a more significant impact on overall energy costs. It is essential to consider energy efficiency measures and alternative energy sources, such as solar panels, to reduce dependency on grid electricity and enhance sustainability.

How switching works

Switching energy suppliers for a cold storage warehouse can be streamlined with these steps:

1. Review your current energy usage and contract terms
2. Research and compare tariffs from different suppliers
3. Contact chosen suppliers to confirm details and terms
4. Provide necessary information and consent to switch
5. Coordinate with the new supplier for a seamless transition
6. Monitor the switch process and confirm completion

Ensure that all steps are completed to avoid any disruption in 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.

Explore other industry guides

• Haulage and logistics company energy quotes
• Warehouse and distribution energy quotes
• Fulfilment centre energy quotes
• Refrigerated transport depot energy quotes
• Self storage facility energy quotes
• Food wholesaler energy quotes