HVAC or refrigeration contractor energy suppliers, tariffs and costs

For HVAC and refrigeration contractor businesses, managing energy consumption efficiently is crucial to maintaining profitability and ensuring reliable service delivery. These businesses typically have unique energy demands due to the nature of their work, which often involves running power-intensive equipment such as air conditioning units, refrigeration systems, and various electric tools. Understanding energy usage patterns and staying informed about cost-saving opportunities can help HVAC and refrigeration contractors optimise their operations and manage overheads. With the right energy solutions, these businesses can achieve greater energy efficiency and contribute to a more sustainable environment.

How much does energy cost for an HVAC or refrigeration contractor?

There is no published price list for HVAC and refrigeration contractors. What an HVAC or refrigeration contractor 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 HVAC and refrigeration contractors?

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 HVAC and refrigeration contractors 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 HVAC and refrigeration contractors?

There is no single answer. Suppliers price business contracts individually rather than publishing standard tariffs for HVAC and refrigeration contractors, 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 HVAC and refrigeration contractors use energy

HVAC and refrigeration contractors typically experience fluctuating energy demands depending on the projects they undertake. Their energy usage is often characterised by the need for high power during installation and maintenance operations. Equipment such as air conditioning units, ventilation systems, and refrigeration units require significant electricity to operate efficiently. Additionally, contractors may use portable power tools and diagnostic equipment on-site, contributing to their overall energy consumption. Because the demand can vary widely based on the size and scope of projects, understanding these patterns is key to managing energy costs effectively.

What affects energy bills for HVAC and refrigeration contractors

Energy bills for HVAC and refrigeration contractors can be influenced by several factors, including:

• The efficiency and age of the equipment used in installations.
• Frequency and duration of equipment usage during projects.
• Seasonal demand for heating, ventilation, and cooling services.
• Location and climate, affecting heating and cooling needs.
• Tariff choice and contract terms with the energy provider.

How to compare tariffs

When comparing energy tariffs, HVAC and refrigeration contractors should consider the following checklist to ensure they select the best option for their business needs:

• Evaluate the contract length and flexibility.
• Check for any hidden fees or additional charges.
• Consider the availability of green energy options.
• Assess whether the tariff offers a fixed or variable rate.
• Look into any discounts for energy-efficient practices or equipment.

Gas or electricity: what matters most

For HVAC and refrigeration contractors, electricity is often more critical than gas, as most of the equipment used in installations and maintenance runs on electric power. However, gas may be relevant for businesses involved in heating system installations. It's vital to balance the use of both energy sources to maximise efficiency and minimise costs. Contractors should evaluate their specific needs to determine the most cost-effective energy mix.

How switching works

Switching energy suppliers involves several key steps:

1. Review current energy usage and identify needs.
2. Compare tariffs and select a suitable provider.
3. Contact the new supplier to initiate the switch.
4. Provide necessary business information and meter readings.
5. Ask your new supplier for the confirmed start date; your supply continues while the switch goes through.

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