Metal fabrication business energy suppliers, tariffs and costs

In the metal fabrication industry, energy efficiency is a crucial component of operational cost management. Businesses involved in manufacturing processes such as cutting, bending, and assembling metal parts often consume substantial amounts of energy. This is due to the need for running heavy machinery, maintaining optimal working conditions, and ensuring continuous production cycles. Therefore, understanding energy consumption patterns and exploring competitive tariff options can lead to significant savings and improved sustainability. At YourUtilities.co.uk, we help metal fabrication businesses navigate the complexities of business energy tariffs to find solutions that align with their operational needs and financial goals.

How much does energy cost for a metal fabrication business?

There is no published price list for metal fabrication businesses. What a metal fabrication business 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 metal fabrication business 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 metal fabrication business 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 metal fabrication 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 metal fabrication businesses?

No supplier specialises in metal fabrication businesses 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 Manufacturing - metal fabrication

Metal fabrication businesses typically experience high energy usage due to the operation of large machinery and equipment required for processes such as welding, cutting, and shaping metal. These activities often demand consistent and reliable power supply to maintain productivity. Additionally, energy is used in heating and ventilation systems to ensure safe and comfortable working conditions, especially in larger facilities. Understanding these usage patterns is essential for identifying opportunities to enhance efficiency and manage costs effectively. Investing in energy-efficient machinery and implementing energy management systems can further optimise energy consumption.

What affects bills for Manufacturing - metal fabrication

Energy costs for metal fabrication businesses can be influenced by several factors including:

• Type and efficiency of machinery used.
• Timing of energy use, with peak times potentially incurring higher rates.
• Facility size and insulation quality, affecting heating and cooling needs.
• Demand charges based on the highest level of energy usage during a billing period.
• Contract terms and conditions, including fixed vs variable rates.

How to compare tariffs

When comparing energy tariffs for metal fabrication businesses, consider the following checklist:

• Assess your current energy usage patterns and peak demand times.
• Determine if a fixed or variable rate tariff better suits your business needs.
• Check for any additional charges or fees in the tariff plan.
• Look for tariffs that offer renewable energy options if sustainability is a priority.
• Consider the length of the contract and any early termination penalties.

Gas vs electricity considerations

In metal fabrication, both gas and electricity play important roles. Electricity is crucial for powering machines and equipment whereas gas may be used for heating or specific industrial processes requiring high temperatures. The choice between gas and electricity can depend on cost, availability, and specific process requirements. Balancing the use of both energy types efficiently can help manage costs and improve operational sustainability.

Switching process overview

Switching energy providers for a metal fabrication business involves the following steps:

1. Review your current contract and note any end dates or termination fees.
2. Compare offers from different suppliers using energy comparison tools.
3. Choose a new supplier and agree on a suitable contract.
4. Notify your current supplier of your intention to switch.
5. The new supplier will coordinate the switch, ensuring no disruption to your energy supply.

More business energy guides

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