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Standing Charges Explained - How Do They Impact The Price Of Your Business Electricity Bill?

The impact of a standing charge on your business electricity bill can be significant. Understanding standing charges and how suppliers apply these charges can help you when searching for a tariff when your renewal comes up. 

We’ll help you understand standing charges, why suppliers charge this daily fee and how much it typically adds to your electricity bill.

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What Is Standing Charge?

A standing charge is a fixed daily fee paid to your business electricity supplier for supplying power to your premises. This is a fixed amount and you will pay regardless of the amount of electricity you use. This applies to businesses regardless of being operational or not.

This charge covers the cost it takes for the supplier to deliver electricity to your business premises. Charges vary from supplier, tariff and region.

Typical, suppliers cover the costs of the following using standing charges:

  • Network maintenance
  • Upkeeping your connection
  • Meter readings/ other admin costs
  • Government initiatives

Can I Get A No Standing Charge Tariff?

When switching providers you may come across the term 'electricity daily standing charge'. These charges are applied regardless of the amount of electricity you use, or some providers offer a no-standing charge tariff. Recently, we have not seen any suppliers offer a tariff with no standing charge but that doesn’t mean we won’t see them again in the future.

When we have seen them in the past, suppliers typically offset any standing charge losses by charging a higher unit price. This makes them appealing to certain types of businesses that are not open regularly throughout the week.

Why Are Electricity Standing Charges So High? 

Standing charges on electricity are at an all-time high, and they don’t seem to be coming back down. This means that any savings made on less consumption are less significant than they would have been previously as a standing charge is applied to your bill regardless of how much electricity is being used. 

Ofgem, the energy industry regulator, sets the level of both unit rates and standing charges; whilst the price cap does not directly impact business electricity, quite often it has a knock-on effect. Whilst suppliers can freely charge a lower standing charge, the overall costs of sourcing energy have increased. 

What Does A Standing Charge Include? 

The standing charge is typically spread equally and can get quite complex varying depending on the supplier. According to Money Saving Expert, a standing charge is typically split like this: 

  • Operating costs - 45%
  • Network costs - 36%
  • Policy costs (green levies, warm home discount etc) - 7.4% 
  • Smart metering - 5.2%
  • Adjustment allowance (covid debt) - 0.3% 
  • Payment method costs - 3.3% 
  • Profit - 1.9% 
  • Allowance for unexpected costs - 0.9% 

Average Standing Charge Prices 2023

A small business on a 2-year electricity contract using 5,000-15,000kWh a year can expect to pay around 51.2p per day for its standing charge.

This table outlines how standing charges for electricity have almost doubled since 2019. This means that in 2023, you're paying an extra £83.26 in comparison to 2019 for the same privilege of having electricity delivered to your premises. 


Year Average Standing Charge % Change On Previous Year Annual Standing Charge Cost On Bill
2019 28.39p n/a £103.62
2020 27p -4.89% £98.55
2021 28p +3.70% £102.20
2022 43p +53.57% £156.95
2022 51.20p +19.06% £186.88

Data correct as of 2023. Prices reflect a live market and are subject to fluctuation.

Does A Higher Standing Charge Actually Make A Difference To Your Bill?

In most cases, it is better to select a business electricity tariff with a lower unit rate and a higher standing charge. However, each business is different and should be calculated before making this decision.

For example, if we look at the average daily standing change for 2023, this is what it would look like annually.

51.2p x 365 = £186.88

In relative terms, this is a much lower amount added to your bill in comparison to a business that has a higher electricity consumption with a higher unit rate and a low or no standing charge.

Which Type of Businesses Could Benefit From a No Standing Charge Tariff?

Zero-standing charge tariffs are typically best suited to businesses that operate infrequently or seasonally, as they won’t be charged for the periods when energy is not used. If your business is only open on weekends or for a few days a week, a tariff without a standing charge could also be of benefit to you.

Businesses that frequently remain open are not suited to no standing charge electricity tariffs as the higher unit rates can cause energy bills to increase.

How do I get Business Electricity Without a Standing Charge?

Almost all of the major six business energy suppliers in the UK have offered a no-standing charge tariff in the past. However, we have not seen one offered from any suppliers for a few years. This does not mean they won’t come back now that the energy market has stabilised.

Getting an Online Quote

At Business Electricity Prices, the only information we need to help you find great no-standing charge tariffs is your supplier's name, business address and a few contact details.

You can then view the latest electricity deals from the widest possible range of suppliers covering both standing charge and no standing charge tariffs.

There are many types of tariffs that come with no standing charge, so it’s best to use an energy comparison engine to give you a quote for your premises to see what is available to you.

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