Metal recycling yard energy suppliers, tariffs and costs

Metal recycling yards are at the forefront of sustainable industry practices, playing a crucial role in reducing waste and conserving natural resources. As energy-intensive operations, these businesses must navigate unique energy challenges, from powering heavy machinery to lighting extensive outdoor spaces. Understanding energy usage and costs is vital for metal recycling yards to operate efficiently and competitively. By optimising energy consumption, these businesses can lower their operational costs and reduce their environmental impact. At YourUtilities.co.uk, we provide tailored energy comparison services to help metal recycling yards find the best energy deals suited to their specific needs.

How much does energy cost for a metal recycling yard?

There is no published price list for metal recycling yards. What a metal recycling yard 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 metal recycling yards?

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 recycling yards 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 recycling yards?

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

Metal recycling yards typically operate with high energy demands due to the nature of their work. Energy is primarily consumed through the operation of heavy machinery used for shredding, baling, and transporting scrap metal. Additionally, large outdoor areas require adequate lighting, especially in winter months, contributing to electricity use. Furthermore, processes like metal smelting or separation might require substantial energy, making it imperative for yards to monitor and manage their energy consumption carefully. By understanding these usage patterns, metal recycling yards can better plan their energy needs and explore cost-saving opportunities.

What affects energy bills for metal recycling yards

Several factors can influence the energy costs for metal recycling yards:

• Seasonal demand: Energy needs may spike during specific times of the year due to increased operational hours.
• Equipment efficiency: The age and efficiency of machinery can significantly impact energy consumption.
• Peak usage times: Using energy during peak times can increase costs due to higher tariffs.
• Energy source: The choice between renewable and non-renewable energy sources can affect the overall cost.

How to compare tariffs

When comparing energy tariffs for a metal recycling yard, consider the following checklist:

• Assess current energy usage patterns to determine needs.
• Identify peak and off-peak usage to leverage time-of-use tariffs.
• Explore both fixed and variable rate plans to find the best fit.
• Check for any additional charges or fees that may apply.
• Consider the benefits of green energy tariffs for environmental impact.

Gas or electricity: what matters most

For metal recycling yards, electricity is often the primary energy source due to its role in powering machinery and lighting. However, gas may also be used in processes such as metal melting or heating. The decision between gas and electricity will depend on the specific processes and equipment used by the yard. Evaluating the efficiency and cost-effectiveness of each energy type is crucial for optimising expenses and operational efficiency.

How switching works

Switching energy suppliers can be straightforward for a metal recycling yard:

1. Review your current energy contract and note any exit fees.
2. Gather recent energy usage data to provide to potential suppliers.
3. Compare tariffs from multiple suppliers using a reliable comparison tool.
4. Select a new supplier and agree on a contract that best fits your needs.
5. Coordinate with the new supplier to handle the switch, ensuring minimal disruption to operations.

More business energy guides

Return to our business energy hub to explore guides for other industries, or go directly to our business gas or business electricity pages.

Explore other industry guides

• Waste management facility energy quotes
• Timber merchant energy quotes
• Laboratory and testing facility energy quotes
• Laundry and dry cleaner energy quotes
• Cleaning company energy quotes