Off licence energy suppliers, tariffs and costs

Running an off licence requires careful consideration of various operational costs, with energy consumption being a significant factor. These businesses often have extended opening hours and rely on refrigeration and lighting to present their products attractively and maintain stock quality. Understanding your energy needs and managing costs effectively can help boost profit margins. At YourUtilities.co.uk, we provide valuable insights and tools to help off licence owners compare energy tariffs and optimise their energy consumption. Whether you're looking to manage overheads or switch suppliers, we're here to guide you through the process, ensuring you make informed decisions for your business's energy needs.

How much does energy cost for an off licence?

There is no published price list for off licences. What an off licence 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 off licences?

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 off licences 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 off licences?

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

Off licences typically consume a substantial amount of energy due to the need for continuous refrigeration and lighting. With long opening hours, these businesses require efficient energy management to maintain a comfortable environment for customers while keeping products at the right temperature. Additionally, the use of electronic payment systems, security alarms, and air conditioning contributes to the overall energy usage. Understanding peak consumption times and identifying energy-saving opportunities can help off licence owners manage their energy expenses more effectively.

What affects energy bills for off licences

Several factors can influence the energy costs for an off licence, including:

• Opening hours and the duration of lighting and refrigeration use.
• Energy efficiency of refrigeration units and lighting systems.
• Seasonal temperature changes affecting heating and cooling needs.
• Choice of energy tariff and supplier contracts.
• Usage habits and demand peaks during business hours.

How to compare tariffs

When comparing energy tariffs for an off licence, consider the following checklist:

• Analyse your current energy usage and identify peak times.
• Review different tariff options, including fixed and variable rates.
• Consider the terms and conditions of each contract, including exit fees.
• Look for energy suppliers that offer business-specific deals or incentives.
• Check for renewable energy options if sustainability is a priority.

Gas or electricity: what matters most

For most off licences, electricity is the primary energy source due to the need for refrigeration, lighting, and electronic devices. Gas may be used for heating, but its overall impact is typically less significant than electricity. Balancing both utilities and ensuring efficient use can lead to improved cost management and improved operational efficiency.

How switching works

Switching energy suppliers for your off licence can be straightforward. Follow these steps:

1. Review your current energy contract for any exit fees.
2. Compare new tariffs and select the best option for your needs.
3. Contact your chosen supplier to initiate the switch.
4. Provide your current energy readings to the new supplier.
5. Confirm the switch date and ensure a smooth transition without service interruption.

More business energy guides

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