Timber merchant energy suppliers, tariffs and costs

Timber merchant businesses have unique energy needs due to their specific operational requirements. These businesses typically involve large-scale timber processing, storage, and transport, all of which require substantial energy usage. Managing energy efficiently can significantly affect operational costs and overall profitability. Understanding the energy profile and consumption patterns of a timber merchant is crucial for making informed decisions about energy suppliers and tariffs. At YourUtilities.co.uk, we help timber merchants navigate the complexities of business energy comparison, ensuring they find the most suitable tariffs for their needs.

How much does energy cost for a timber merchant?

There is no published price list for timber merchants. What a timber merchant 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 timber merchants?

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 timber merchants 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 timber merchants?

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

Timber merchants often operate in large facilities that require consistent heating, lighting, and machinery operation, leading to significant energy consumption. Energy usage tends to be higher during working hours, with peak consumption typically occurring in the mornings and early afternoons when machinery is most active. The need for climate control in storage areas to protect wood from moisture also contributes to energy demand. Additionally, transportation logistics for timber distribution may indirectly impact energy considerations, as businesses evaluate the efficiency of their fleet operations.

What affects energy bills for timber merchants

Several factors influence energy bills for timber merchants, including:

• Seasonal variations that affect heating and cooling needs.
• The efficiency of machinery and lighting systems.
• Operational hours and the intensity of machinery use.
• Building insulation and the quality of climate control systems.
• Energy tariffs and contract terms negotiated with suppliers.

How to compare tariffs

When comparing energy tariffs, timber merchants should consider the following checklist:

• Review current energy usage patterns and identify peak demand periods.
• Check contract end dates to avoid automatic renewals at higher rates.
• Consider fixed vs variable rate tariffs based on market trends.
• Evaluate suppliers' customer service and support for businesses.
• Look for energy efficiency incentives or green energy options.

Gas or electricity: what matters most

For timber merchants, electricity is often the primary energy source due to the need to power machinery and lighting. However, gas may also play a role, particularly in heating large spaces or drying timber. The choice between gas and electricity will depend on the specific operations and infrastructure of the business. Evaluating the cost-effectiveness of both energy types is essential for optimising expenses.

How switching works

The process of switching energy suppliers for timber merchants typically involves:

1. Reviewing current energy contracts and identifying end dates.
2. Gathering data on energy usage to find suitable tariffs.
3. Comparing offers from multiple suppliers using a comparison tool.
4. Selecting a new supplier and negotiating contract terms.
5. Coordinating the switch with the new supplier, ensuring no disruption to energy supply.

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