IT services provider energy suppliers, tariffs and costs

IT services providers rely heavily on technology and digital infrastructure, making energy consumption a critical consideration for these businesses. The constant need for servers, computers, and networking equipment means that energy costs can quickly add up. Efficient energy management not only helps in reducing operational costs but also supports sustainability goals. Understanding how energy is used and exploring competitive tariffs can significantly impact the bottom line. With the right choices, IT services providers can ensure they meet their energy needs while maintaining cost efficiency and environmental responsibility.

How much does energy cost for an IT services provider?

There is no published price list for IT services providers. What an IT services provider 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 IT services providers?

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 IT services providers 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 IT services providers?

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

IT services providers typically have a high energy usage profile due to their reliance on technology and digital infrastructure. This includes powering servers, workstations, networking equipment, and cooling systems. The need for uninterrupted power supply to maintain uptime and data integrity is crucial. Many IT businesses operate around the clock, which can lead to consistent energy consumption throughout the day and night. As such, understanding usage patterns is essential for managing costs and optimising energy efficiency.

What affects energy bills for IT services providers

Several factors can affect energy costs for IT services providers:

• Number of servers and workstations in operation.
• Efficiency of cooling systems used to maintain optimal temperatures.
• Operating hours of the business, especially if 24/7 uptime is required.
• Location and size of the data centre or office space.
• Contracts and tariffs chosen, including fixed or variable rate options.

How to compare tariffs

When comparing energy tariffs, consider the following checklist:

• Analyse current energy usage patterns and peak demand times.
• Consider the flexibility of fixed vs variable rate tariffs.
• Check for any additional benefits, such as renewable energy options.
• Evaluate contract length and early termination fees.
• Assess the customer service and support offered by the provider.

Gas or electricity: what matters most

For IT services providers, electricity is typically the primary energy concern due to the need to power electronic devices and cooling systems. Gas may play a minor role, usually for heating purposes, depending on the facility's requirements. However, focusing on electricity efficiency can offer the most significant potential for improved cost management and sustainability improvements.

How switching works

Switching energy providers can be straightforward if the following steps are followed:

1. Review your current contract for any exit fees or notice periods.
2. Research and compare potential new suppliers and tariffs.
3. Contact the chosen supplier to initiate the switch.
4. Provide any necessary information and confirm the switch date.
5. Ensure a seamless transition by coordinating with both old and new suppliers.

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