Business energy pass-through charges explained (UK, 2026)
Pass-through (non-commodity) charges — network, policy, balancing, capacity and metering costs — now make up roughly half of a typical UK business electricity bill. Here is what they are in 2026, how fixed and pass-through contracts treat them, and how to keep them under control.
- Understand DUoS, TNUoS, BSUoS, policy costs, CCL and the Capacity Market
- See why the domestic price cap does not apply to your business
- Compare fixed (fully bundled) vs pass-through contract structures
- Submit your details for a whole-of-market business energy comparison
Whole-of-market comparison. Charge structures vary by meter type, region, network and supplier terms. Figures current as of July 2026.
Quick answer
Pass-through charges are the non-commodity costs on a UK business energy bill — the parts you pay on top of the wholesale energy (commodity) price. They cover the cost of delivering electricity and gas to your site and of running the wider system: network charges (DUoS, TNUoS, BSUoS), policy/environmental costs (Renewables Obligation, Contracts for Difference, Feed-in Tariff), the Capacity Market, metering (MOP/DC/DA) and the Climate Change Levy (CCL).
In a fully fixed (bundled) contract the supplier folds an estimate of these into one p/kWh rate, so your price is locked. In a pass-through contract they are billed at cost and can move during your term. Note: the Ofgem domestic price cap (set at 26.11p/kWh electricity and 7.33p/kWh gas for July–September 2026) protects households only — it does not apply to business energy.
What are business energy pass-through charges?
In the UK business energy market, pass-through charges are costs a supplier may pass on to you at (or near) cost rather than bundling them into a single fixed p/kWh rate. They are sometimes called non-commodity costs or third-party charges, and they are linked to your site’s meter, how and when you use energy, and the regional network that serves your premises.
They have grown into a major part of the bill. By 2026, network, policy and balancing costs typically account for around half (roughly 45–60%) of a business electricity unit cost, with the wholesale commodity making up the rest. That share moves as wholesale prices and industry charges change, but the headline point holds: two quotes with the same unit rate can still cost very different amounts once pass-through charges and consumption patterns are considered.
You see pass-through items most often on electricity (especially half-hourly meters), but business gas contracts can include pass-through elements too — gas transportation, distribution and metering, plus CCL. The important question on any quote is simple: is this price fully fixed, or are some charges passed through?
Why it matters for procurement
If your business is budgeting, tendering, or comparing supplier offers, you need to know whether a quote is “fully fixed” or whether some costs can move with industry charges and your usage profile. Understanding the structure is the single biggest way to avoid bill shock at the next invoice or reconciliation.
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The domestic price cap does not apply to your business
A common misconception is that the Ofgem energy price cap protects business bills. It does not. The cap is a household protection only. Ofgem confirmed the latest cap on 27 May 2026, setting the July–September 2026 (Q3) level at a GB direct-debit average of 26.11p/kWh for electricity (57.19p/day standing charge) and 7.33p/kWh for gas (29.04p/day standing charge). Those numbers govern domestic tariffs and change every quarter — the next (Oct–Dec 2026) cap is not yet confirmed.
Business prices are contract-driven
Your rate comes from a negotiated, fixed-term contract — not a capped unit rate. That means there is no regulated ceiling, but it also means you can lock a price and shop the whole market.
No automatic switch back to a cap
If a business contract ends without renewal you roll onto expensive out-of-contract / deemed rates, which can be far above market. Diarise your renewal window well ahead.
The cap is still a useful sanity-check
It is not your price, but the household cap shows where wholesale and network costs sit. A good 2026 fixed business deal aims to be competitive against current market unit rates for your meter and region.
Why pass-through charges catch businesses out
Quotes can look cheaper than reality
A low p/kWh unit rate may exclude network, balancing, or metering-related costs. If those costs are passed through, your total bill can be materially higher than the headline rate suggested.
They depend on how you use electricity
Items such as DUoS vary by time bands (red/amber/green). Your operating hours and peak demand can materially change what you pay — the same kWh costs more in a red band.
Contract wording differs by supplier
“Pass-through”, “non-commodity”, “third-party”, and “excluded charges” may cover different items. Comparing like-for-like is essential before you sign.
Common pass-through charges on UK business electricity (2026)
The exact list depends on your supplier and meter setup. Below are the common categories businesses encounter in 2026. Use it as a checklist when reviewing a contract summary, tender response or bill breakdown.
| Charge type | What it relates to | Why it changes | Who’s most affected |
|---|---|---|---|
| DUoS (Distribution Use of System) | Regional distribution network charges for using local electricity networks (the wires to your site). | Region, time bands (red/amber/green), meter type, and your consumption profile. | Sites with predictable peak hours, or half-hourly meters exposed to time-of-use bands. |
| TNUoS (Transmission Network Use of System) | Charges for using the national high-voltage transmission network. | Industry charging statements, demand patterns and (for some) capacity/demand measures. | Larger demand sites; some structures apply more to HH/settled profiles. |
| BSUoS (Balancing Services Use of System) | Cost of balancing supply and demand in real time. Since April 2023 BSUoS is a fixed, half-hourly demand tariff set ahead of time. | Set in advance via NESO charging periods, but still recovered through your volume. | Often passed through on HH contracts; affects all settled demand. |
| Policy / environmental costs (RO, CfD, FiT) | Renewables Obligation, Contracts for Difference and Feed-in Tariff levies that fund low-carbon generation. | Government/Ofgem rates updated periodically (e.g. RO obligation level, CfD reconciliations). | All electricity users; a large slice of the non-commodity total. |
| Capacity Market | Charge that funds payments to generators/flexibility for guaranteed peak capacity. | Auction outcomes and winter peak (typically Nov–Feb 4–7pm) demand. | Sites that draw power during winter peak periods. |
| CCL (Climate Change Levy) | A government tax on business energy use, charged per kWh on electricity and gas. | Set by HM Treasury; reliefs apply to some sectors (e.g. via a Climate Change Agreement). | Most businesses, unless on a relief scheme or below the de-minimis threshold. |
| Metering & data (MOP/DC/DA) | Meter operator, data collection and data aggregation services. | Meter type (HH/non-HH), service levels, and contracted metering arrangements. | Sites with half-hourly meters or upgraded comms, and multi-site portfolios. |
Tip: When a supplier says “pass-through”, ask for the exact schedule of charges and whether they’re billed as p/kWh, p/day, £/kVA, time-banded, or reconciled after the fact.
Fixed (all-inclusive) vs pass-through: what’s the difference?
Suppliers and brokers describe pricing in different ways. Use the guide below to understand what you’re being quoted and how to compare like-for-like. Remember: a “fixed” contract fixes the commodity price — it does not necessarily fix every pass-through item.
| Structure | What you typically see | Pros | Watch-outs |
|---|---|---|---|
| Fully fixed / all-inclusive (bundled) | Single unit rate + standing charge that aims to include all non-commodity costs for the term. | Maximum budget certainty; fewer variable line items; easiest to forecast. | Priced higher to cover the supplier’s risk; confirm it is truly fixed and what (if anything) stays excluded. |
| Pass-through (partially unbundled) | Lower headline unit rate; non-commodity charges billed separately according to actuals. | Cost-reflective; can suit sites that actively manage peaks and time-of-use. | Budget risk if charges rise or usage shifts; requires closer bill validation and true-ups. |
| Flexible / basket / index-linked | Energy bought in tranches over time; non-commodity usually passed through, common for HH portfolios. | Risk-management and buying strategy; potentially better for larger, multi-site users. | More complex; needs governance for approvals, reporting and forecasting. |
What to ask for on quotes
- Is the quote fully fixed or are there excluded / pass-through charges?
- Which charge lines are excluded (list them)?
- Are DUoS/time bands included or billed separately?
- Are metering (MOP/DC/DA) costs included?
- How are reconciliations handled (estimated vs actual, true-ups)?
What to share for accurate comparisons
- MPAN/MPRN and meter type (HH if applicable)
- Latest 12 months’ consumption (or available half-hourly data)
- Opening hours and known peaks (ovens, compressors, EV charging)
- Any planned equipment changes or site expansions
- Multi-site list (postcodes + estimated volumes)
How to reduce pass-through charges (practical actions for 2026)
You can’t control every industry-wide charge, but many businesses can cut their exposure by improving data quality, managing peak demand, and choosing a contract structure that fits how the site operates.
- Start with your meter and data. Confirm whether you’re on a half-hourly meter, check reads are accurate, and ensure your supplier is using the correct profile and meter operator details.
- Identify peaks and shift load where possible. Moving discretionary usage (pre-cooling, battery charging, process scheduling) out of DUoS red bands and the winter Capacity Market peak can reduce time-banded charges.
- Review agreed capacity (kVA). Over-capacity wastes availability charges; exceeding capacity triggers penalties. Align your agreed capacity with real demand.
- Check CCL relief eligibility. If you hold a Climate Change Agreement, run a charity, or use very low volumes, you may qualify for CCL relief or reduced rates — confirm the correct PP10/PP11 declarations are in place.
- Validate bills and reconcile anomalies. Look for unexpected line items, spikes, or duplicated metering charges — especially after a switch, meter exchange, or site change.
- Compare contract structures, not just p/kWh. Ask for a clear list of included/excluded charges and model total cost against your real consumption pattern.
- Consider flexible or basket strategies for larger users. Multiple meters or high volumes can benefit from a flexible approach — provided you have the governance and reporting in place.
Need a quick sense-check? Use our quote form and add a note: “Please confirm what pass-through charges apply and whether a fully fixed option is available for our meter.”
Common mistakes when reviewing pass-through charges
Comparing on unit rate alone
For HH and many SME electricity contracts, the non-commodity component is around half the bill. A “cheaper” rate can become more expensive once excluded charges are applied.
Assuming the price cap protects you
The Ofgem cap is for households only. Business prices are set by contract, so renewing on time and shopping the market is what protects your budget.
Assuming your usage pattern won’t change
New equipment, longer trading hours, refrigeration upgrades, or EV chargers can shift peaks. With pass-through pricing, that can change your total cost quickly.
Ignoring regional network differences
Two sites with identical consumption can face different DUoS/TNUoS charges depending on their region and network characteristics.
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FAQs: pass-through charges on business energy
Pass-through charges are the non-commodity costs added on top of the wholesale energy price — network charges (DUoS, TNUoS, BSUoS), policy and environmental costs (RO, CfD, FiT), the Capacity Market, metering (MOP/DC/DA) and the Climate Change Levy. They cover delivering energy to your site and running the wider system, and they can change over time independently of your unit rate.
No. The Ofgem energy price cap protects domestic (household) customers only. The July–September 2026 cap (26.11p/kWh electricity, 7.33p/kWh gas) does not apply to businesses. Your business price is set by the fixed-term contract you agree, so there is no regulated ceiling — switching and renewing on time is how you keep costs down.
Not necessarily. A standing charge is a fixed daily amount for providing service and maintaining your account/metering. Pass-through charges are separate non-commodity, network, balancing and metering items that may be billed by published rates, time bands or actual costs depending on your contract terms.
A fixed contract usually fixes the commodity (energy) price, but pass-through items are set by network operators, NESO and government and can move during your term. Your own time-of-use and peak demand also vary month to month, which changes time-banded charges such as DUoS. Whether these are passed through depends on your contract structure.
They are most significant on business electricity, but business gas contracts can also include pass-through items — gas transportation and distribution, metering, and the Climate Change Levy. Always ask the supplier for the excluded-charge schedule for both fuels.
Look at your contract summary or welcome pack for phrases like “pass-through”, “third-party charges”, “excluded charges” or “non-commodity”. On bills, check for line items beyond the unit rate and standing charge. If unsure, submit a quote request and we can help you interpret the structure when comparing options.
Yes. If you have multiple premises, comparing on a whole-of-market basis helps you assess contract structures and ensure excluded charges are understood across the portfolio. Add your main postcode in the form and share additional sites when we contact you.
What businesses say about clearer comparisons
“We didn’t realise how much of our cost sat outside the unit rate. Having the quote broken down made it easier to budget and justify the decision internally.”
“The biggest win was understanding peak demand and time bands. We adjusted a couple of processes and the bills became more predictable.”
“Straight answers on what was included vs excluded. That clarity helped us compare suppliers properly and avoid surprises.”
How we keep this guide accurate
EnergyPlus is a whole-of-market UK energy comparison service. This guide reflects the business energy charging framework as it stands in 2026, including the Ofgem domestic price cap confirmed on 27 May 2026 for July–September 2026 (which is referenced for context only and does not apply to business contracts). Pass-through charge methodologies are set by network operators, NESO and government and are updated periodically; always confirm the exact schedule with your supplier or broker for your meter and region.
Last updated June 2026. Ready to compare? Start your quote, or browse energy suppliers and our price cap guide for context.
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