Construction company energy suppliers, tariffs and costs

Construction companies in the UK face unique energy challenges due to their reliance on power-intensive machinery and variable project locations. These businesses need a flexible and cost-effective energy strategy to ensure the smooth operation of equipment while managing costs. From powering heavy machinery to maintaining site offices, the energy requirements can vary greatly depending on the scale and nature of the construction project. Selecting the right energy plan can lead to significant operational savings and increased efficiency, making it crucial for construction businesses to regularly review and compare energy tariffs.

How much does energy cost for a construction company?

There is no published price list for construction companies. What a construction company 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 construction company 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 construction company 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 construction companies 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 construction companies?

No supplier specialises in construction companies 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 Construction company

Construction companies typically have high and variable energy demands. The use of heavy-duty equipment, machinery, and temporary site offices means electricity and gas consumption can fluctuate widely from project to project. On-site generators are often used, especially in remote locations, leading to additional fuel considerations. These businesses must factor in the cost of running equipment such as cranes, diggers, and concrete mixers, which require substantial energy resources. Understanding these patterns helps in choosing the most suitable energy contracts that offer flexibility and reliability.

What affects bills for Construction company

Several factors influence the energy bills of construction companies:

• Project size and duration, which determine the overall energy requirement.
• Use of energy-efficient machinery and technology.
• Location of the construction site, affecting access to energy sources and potential reliance on portable generators.
• Seasonal variations, as more energy might be needed for heating in winter or cooling in summer.
• Contract terms, including fixed or variable-rate tariffs.

How to compare tariffs

When comparing energy tariffs, construction companies should consider the following checklist:

• Assess the average energy consumption per project.
• Check for tariffs that offer flexibility for varying demands.
• Look for contracts that include green energy options if sustainability is a priority.
• Compare the terms of fixed versus variable rates and their suitability for your business model.
• Consider the reputation and customer service of potential energy suppliers.

Gas vs electricity considerations

For construction companies, both gas and electricity play crucial roles, but their importance can vary based on project specifics. Electricity is typically essential for operating machinery and site offices, while gas may be used less frequently, often for heating or specific machinery. Companies need to evaluate their specific project requirements to decide the proportion of gas to electricity needed, ensuring they choose a tariff that aligns with their energy mix needs.

Switching process overview

Switching energy providers involves several key steps:

1. Review current energy usage and contracts to understand needs.
2. Research and compare different energy tariffs available for construction businesses.
3. Contact potential suppliers to discuss specific requirements and get quotes.
4. Select the most cost-effective and suitable tariff.
5. Coordinate with the new supplier to manage the switch, ensuring minimal disruption to site operations.
6. Monitor the first few bills to ensure the switch has been implemented correctly.

More business energy guides

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