Hair salon energy suppliers, tariffs and costs

Running a hair salon involves more than just styling hair; it requires a keen understanding of operational costs, including energy expenses. Energy usage in salons is typically higher compared to other small businesses due to the reliance on electrical equipment such as hairdryers, straighteners, and washing machines. For salon owners, managing energy efficiently can lead to improved cost management, which can then be reinvested into other areas of the business. Understanding your salon's energy needs and being proactive about energy management can make a big difference in your overall expenses. At YourUtilities.co.uk, we help salon owners navigate the complexities of business energy, making it easier to compare available options and manage overheads.

How much does energy cost for a hair salon?

There is no published price list for hair salons. What a hair salon 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 hair salons?

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 hair salons 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 hair salons?

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

Hair salons are known for their intensive energy usage due to the need for constant operation of various electrical appliances. Equipment such as hairdryers, straighteners, and washing machines are essential in daily operations and contribute significantly to the energy consumption profile of a salon. Moreover, salons often rely on good lighting to create a welcoming atmosphere for clients, which can further increase electricity demands. Understanding these patterns can help salon owners identify areas where energy efficiency can be improved, potentially leading to improved cost management.

What affects energy bills for hair salons

Several factors can influence the energy bills of a hair salon:

• Number of electrical devices in use.
• Operating hours and peak usage times.
• Quality and efficiency of appliances.
• Seasonal changes affecting heating and lighting needs.
• Location and type of energy tariff chosen.
• Building insulation and energy efficiency measures in place.

How to compare tariffs

When comparing energy tariffs for a hair salon, consider the following checklist:

• Assess your current energy usage patterns.
• Determine peak usage times and needs.
• Look for tariffs that offer flexibility for high usage periods.
• Consider fixed vs variable rate options.
• Check for any hidden fees or contract terms.
• Evaluate the customer service and support of potential suppliers.

Gas or electricity: what matters most

In hair salons, electricity typically plays a more crucial role than gas due to the reliance on electrical appliances for day-to-day operations. However, gas may still be used for heating purposes, particularly in larger salons or during colder months. Understanding the balance between these two energy sources can help salon owners optimise their energy expenses, ensuring neither resource is wasted.

How switching works

Switching energy providers for your hair salon can be straightforward by following these steps:

1. Review your current energy contract and identify the end date.
2. Research and compare energy tariffs that suit your business needs.
3. Contact your chosen supplier to initiate the switch.
4. Provide any necessary documentation or meter readings.
5. Ensure a smooth transition by coordinating with both old and new suppliers.

More business energy guides

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