Restaurant energy suppliers, tariffs and costs

Running a restaurant involves a variety of energy-intensive tasks that require careful consideration to manage costs effectively. From the moment your kitchen fires up its equipment to the time your dining area is well-lit for evening service, energy is a crucial component of your daily operations. Understanding your restaurant's energy needs and how to optimise them can lead to improved cost management, freeing up funds that can be reinvested into enhancing customer experiences or expanding your menu offerings. With the right approach, you can ensure your restaurant remains competitive while staying within budget.

How much does energy cost for a restaurant?

There is no published price list for restaurants. What a restaurant 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 restaurants?

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 restaurants 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 restaurants?

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

Restaurants typically have a high energy usage profile due to the diverse range of activities that occur throughout the day. The kitchen is the heart of any restaurant, consuming significant energy for cooking, refrigeration, and dishwashing. Front-of-house areas also require energy for lighting, heating, or air conditioning to ensure a comfortable dining environment. Peak energy usage often aligns with meal times, meaning consumption is concentrated during breakfast, lunch, and dinner services. Understanding these patterns can help restaurant owners identify opportunities for energy savings, such as optimising equipment use and scheduling regular maintenance.

What affects energy bills for restaurants

Several factors can influence the energy bills of a restaurant:

• The size and layout of the restaurant, including kitchen and dining areas.
• The types of cooking and refrigeration equipment used.
• The hours of operation, particularly if the restaurant offers evening or late-night service.
• Efficiency of existing appliances and lighting systems.
• Seasonal variations in energy use, such as increased heating in winter or air conditioning in summer.

How to compare tariffs

When comparing energy tariffs for your restaurant, consider the following checklist:

• Evaluate your peak usage times and look for tariffs that suit your operational hours.
• Check for any hidden fees or additional charges that may apply.
• Consider the length of the contract and any early termination fees.
• Look for flexible payment options that align with your cash flow.
• Assess the reliability and reputation of the energy provider.

Gas or electricity: what matters most

In a restaurant setting, both gas and electricity play vital roles. Gas is often preferred for cooking due to its instant heat and fine control, making it ideal for busy kitchens. Electricity, however, is essential for refrigeration, lighting, and other appliances. Balancing the use of both energy types can help manage costs and ensure efficient operations. It's important to consider the availability and cost of each energy source in your area when making decisions about equipment investments.

How switching works

Switching energy suppliers for your restaurant can be straightforward if you follow these steps:

1. Review your current energy usage and identify your needs.
2. Research and compare different energy tariffs available for restaurants.
3. Contact potential suppliers for quotes and contract details.
4. Choose a new supplier and agree on the terms of the contract.
5. Inform your current supplier of your decision to switch.
6. Coordinate the switch date to ensure a seamless transition with no service interruption.

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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