Pharmacy energy suppliers, tariffs and costs

Pharmacy businesses in the UK face unique challenges when it comes to managing their energy consumption. With a need to maintain precise temperature control for medications and a reliance on various electronic equipment, pharmacies must pay close attention to their energy usage. Balancing operational efficiency with cost-effectiveness is crucial, especially in a competitive market. Understanding the specific energy needs and savings opportunities can help pharmacies run more sustainably and economically. At YourUtilities.co.uk, we aim to assist pharmacy owners in navigating the complexities of energy tariffs, helping them make informed choices that align with their business needs.

How much does energy cost for a pharmacy?

There is no published price list for pharmacies. What a pharmacy 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 pharmacies?

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 pharmacies 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 pharmacies?

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

Pharmacies typically have a high energy demand due to the need to operate refrigeration units for temperature-sensitive medications around the clock. Additionally, lighting, computers, and other electronic devices contribute to their energy consumption. Many pharmacies also have extended operating hours, further increasing energy usage. These factors make it crucial for pharmacies to optimise their energy efficiency to manage costs effectively. By understanding their energy usage patterns, pharmacy owners can better negotiate tariffs and implement energy-saving measures where possible.

What affects energy bills for pharmacies

Several factors can influence the energy bills for a pharmacy business, including:

• The size and location of the pharmacy, as larger spaces generally require more energy.
• The efficiency of refrigeration and other essential equipment, which can significantly impact energy consumption.
• Operating hours, as longer hours typically lead to higher energy usage.
• Seasonal variations, which might affect heating and cooling demands.
• Energy supplier tariffs and contract terms, which can vary widely.

How to compare tariffs

When comparing energy tariffs, pharmacy owners should consider the following:

• Review current energy usage and identify peak consumption times.
• Check the length and terms of current contracts to avoid exit fees.
• Consider fixed vs variable rate tariffs depending on market stability.
• Look for suppliers that offer green energy options if sustainability is a priority.
• Ensure the supplier has a reliable customer service reputation.

Gas or electricity: what matters most

For most pharmacies, electricity will likely be the primary energy concern due to the reliance on refrigeration units, lighting, and electronic devices. Gas may be used for heating, but its importance will vary depending on the size of the pharmacy and its location. Pharmacies should assess their specific needs to determine the most cost-effective energy mix and consider energy-saving technologies to reduce consumption.

How switching works

The process of switching energy providers for a pharmacy typically involves the following steps:

1. Review your current energy contract for any exit fees or notice periods.
2. Collect recent energy bills to understand your usage patterns.
3. Research and compare tariffs using an energy comparison service.
4. Contact the chosen energy supplier to agree on a new contract.
5. Allow the new supplier to manage the switch, ensuring no disruption in service.

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.

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