Is there a business energy price cap in the UK?

Fast answer: there is no price cap for business energy

The Ofgem energy price cap is a limit on what suppliers can charge domestic customers on standard variable tariffs. It is £1,663 a year for a typical dual-fuel household paying by direct debit from 1 July to 30 September 2026, and £1,723 from 1 October 2026. It has never applied to a business meter.

A business supply is priced by contract. The unit rate and standing charge you pay are whatever you agreed when you signed, or, if you never signed, whatever your supplier's deemed or out-of-contract tariff happens to be. Nobody sets an upper limit on those.

What limits business energy prices instead

1. Your contract

A fixed contract is the only thing that genuinely caps your price. Fix for 12, 24 or 36 months and the unit rate cannot move until it ends, whatever the wholesale market does. The trade-off is that you cannot leave early without an exit fee, and if you miss the renewal window you fall onto the supplier's rollover or deemed rates.

2. Deemed and out-of-contract rates, and Ofgem's limit on them

When a contract ends without a new one, or when you move into premises and start using energy before signing, you are on deemed rates. Ofgem's supply licence says these must not be "unduly onerous", but that is a floor, not a cap: in practice deemed and out-of-contract rates typically run 40–80% above a negotiated fixed price. Our deemed rates by supplier table lists what 13 suppliers actually charge.

3. Ofgem's micro-business protections

If your business has fewer than 10 employees (or their full-time equivalent) and an annual turnover or balance sheet of no more than €2 million, or uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year, Ofgem treats you as a micro-business. That brings specific rights: your supplier must tell you when your contract is ending and what you will pay if you do nothing, your termination notice period is capped at 30 days, and you can give notice to leave at any point during the contract so that you are free to switch on the end date.

4. Broker commission must be disclosed

Since 1 October 2024 every non-domestic contract arranged through a broker or comparison service must show the broker's commission in the principal terms, and brokers dealing with small businesses must belong to a redress scheme. Since December 2024 businesses with fewer than 50 employees (or up to £6.5m turnover) can take a broker complaint to the Energy Ombudsman. See how business energy brokers are paid.

5. The Climate Change Levy is fixed by government

The one government-set number on a business bill is the Climate Change Levy: 0.801p per kWh on both electricity and gas from 1 April 2026 (up from 0.775p, the first rise since 2021). It is a tax that is added, not a cap that is applied.

Government support schemes that have ended

Businesses did have price support during the 2022–24 crisis, which is where much of the "business price cap" confusion comes from:

• Energy Bill Relief Scheme (EBRS) — discounted wholesale prices for all non-domestic customers, 1 October 2022 to 31 March 2023. Closed.
• Energy Bills Discount Scheme (EBDS) — a smaller per-unit discount, 1 April 2023 to 31 March 2024. Closed.

There is no live government scheme discounting or capping business energy prices in 2026, and none has been announced. If wholesale prices spike again a new scheme is possible, but you should not plan a contract around one.

What UK businesses actually pay in 2026

Because there is no cap, the useful benchmark is what businesses are really paying. The government's own figures (DESNZ Quarterly Energy Prices, Q1 2026, contracted rates including CCL, excluding VAT and standing charges) put the all-business average at 24.14p/kWh for electricity and 5.17p/kWh for gas. The smallest sites pay the most: very small consumers (under 20 MWh a year, which covers most shops and cafes) averaged 35.0p/kWh for electricity, roughly 63% more per unit than the largest industrial users.

Full size-band tables, and the 2004–2026 price history, are on our business electricity prices page and the UK business energy price index. The next DESNZ release (Q2 2026) is due on 29 September 2026 and those pages update with it.

How to protect your business from price rises without a cap

1. Find your contract end date and notice period. They are on your last renewal letter or bill. Most contracts can be renewed up to 12 months ahead and most renewal windows open 3–6 months before the end date.
2. Never let a contract roll over. Give notice inside the window even if you have not chosen a new supplier yet. Rollover and deemed rates are the most expensive prices in the market.
3. Compare like for like. Unit rate and standing charge and contract length. A low unit rate with a high standing charge can cost a low-usage site more.
4. Fix if you need certainty. A 12–24 month fix is the closest thing to a cap a business can get. Check what happens at the end of it before you sign.
5. Ask what the broker earns. It must be in the contract terms. If it is not, walk away.

Frequently asked questions