Greenhouse or horticulture business energy suppliers, tariffs and costs

Greenhouse and horticulture businesses have unique energy needs that require careful management to ensure both efficiency and sustainability. From maintaining optimal temperatures to ensuring adequate lighting, energy consumption in these sectors can be significant. As these businesses strive to produce high-quality plants and crops, understanding the nuances of energy use becomes crucial. Navigating the complexities of energy tariffs, choosing the right type of energy, and finding ways to reduce consumption are all vital components for these businesses to maintain competitiveness and profitability.

How much does energy cost for a greenhouse or horticulture business?

There is no published price list for greenhouse and horticulture businesses. What a greenhouse or horticulture business 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 greenhouse and horticulture businesses?

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 greenhouse and horticulture businesses 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 greenhouse and horticulture businesses?

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

Greenhouse and horticulture businesses typically experience high energy usage due to their need for controlled environments. This includes heating systems to maintain temperature, lighting to extend daylight hours, and ventilation to manage humidity levels. Seasonal changes can also influence energy demand, with peak usage often occurring in colder months when heating is essential. Understanding the specific energy requirements of your particular crops and adjusting your energy use accordingly can lead to more efficient operations.

What affects energy bills for greenhouse and horticulture businesses

Several factors can affect energy bills for greenhouse and horticulture businesses, including:

• Weather conditions impacting heating and lighting needs.
• Energy efficiency of equipment and facilities.
• Time of year, with increased demand in winter months.
• Type of energy tariff and contract terms.
• Scale of operations and the types of crops grown.

How to compare tariffs

When comparing energy tariffs for greenhouse and horticulture businesses, consider the following checklist:

• Identify your peak energy usage times.
• Review the terms and conditions of each tariff.
• Check if green energy options are available and feasible.
• Look for fixed vs. variable rate options.
• Assess the contract length and any early termination fees.
• Consider the supplier's customer service and support.

Gas or electricity: what matters most

Both gas and electricity play crucial roles in greenhouse and horticulture businesses. Gas is often used for heating, which is vital for maintaining the optimal growth temperature, especially in colder months. Electricity is essential for lighting and powering equipment such as fans and irrigation systems. The choice between gas and electricity may depend on availability, cost-effectiveness, and specific business needs.

How switching works

The process of switching energy suppliers for greenhouse and horticulture businesses can be straightforward if planned properly. Here are the steps:

1. Review your current energy usage and contract terms.
2. Research and compare different energy suppliers and tariffs.
3. Select a new supplier that meets your needs.
4. Contact your chosen supplier to initiate the switch.
5. Provide the necessary information and agree on a start date.
6. Ensure that the final meter reading is submitted to your former supplier.

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