A low business electricity standing charge does not automatically mean a low bill. You need to compare it alongside the unit rate and your own consumption.
The standing charge is normally a daily amount; the unit rate is the price per kilowatt-hour (kWh). For quick explanations of both, see our business energy bill FAQs.
What does the standing charge cover?
Suppliers can recover account, metering, network and other costs through the standing charge. They can also recover costs through unit rates or separate items. There is no universal allocation or single daily charge for every business.
A daily charge is normally payable while the supply remains active, even when consumption is zero. Closing the shop for a week is not the same as closing the supply account.
“Daily” also does not mean “unchangeable”. Check whether the agreed standing charge is fixed and which contractual exceptions apply. Our fixed-contract charges guide explains pass-through and reconciliation arrangements.
Compare the total, not one number
For a simple single-rate tariff, use:
Annual kWh × unit rate in pounds + daily standing charge in pounds × days.
Convert pence into pounds first. Add any other applicable charges and taxes consistently. For a multi-rate meter, calculate each rate band's consumption separately.
A worked comparison
These are invented example tariffs to demonstrate the arithmetic, not current offers. The figures assume 365 days and exclude VAT, Climate Change Levy and other charges.
| Example tariff | Unit rate | Daily standing charge | Annual standing charge |
|---|---|---|---|
| A | 28p/kWh | 55p | £200.75 |
| B | 31p/kWh | 28p | £102.20 |
At 15,000 kWh, A costs £4,200 + £200.75 = £4,400.75. B costs £4,650 + £102.20 = £4,752.20. A is £351.45 cheaper despite its higher standing charge.
At 2,000 kWh, A costs £560 + £200.75 = £760.75. B costs £620 + £102.20 = £722.20. B is £38.55 cheaper at this lower consumption.
| Annual use | Tariff A total | Tariff B total | Lower example cost |
|---|---|---|---|
| 2,000 kWh | £760.75 | £722.20 | B |
| 5,000 kWh | £1,600.75 | £1,652.20 | A |
| 15,000 kWh | £4,400.75 | £4,752.20 | A |
The break-even point is 3,285 kWh: the £98.55 difference in annual standing charges divided by the £0.03 unit-rate difference. Above that level A is cheaper; below it B is cheaper, under these assumptions.
What else should you check?
- Use representative consumption, not another business's “typical” bill.
- Confirm whether both quotes include the same network and metering costs.
- Compare the same start date, term and payment conditions.
- Check broker fees, capacity charges and variable items.
- Ask what happens at expiry or if the premises closes.
- Review tax eligibility separately using our VAT and CCL guide.
Ofgem explains business contract types. Your written terms are the starting point when questioning a changed charge.
Can I get a tariff without a standing charge?
Availability depends on the supplier and site. Even if offered, a higher unit rate or other charge can outweigh the apparent benefit. Compare the complete cost.
Should I change my meter to reduce the charge?
Do not assume a replacement will save money. Ask the supplier to explain metering requirements, any separate agreement and the full costs before requesting changes.
Can Aarubi check my bill?
Use the Energy Bill Checker to start reviewing charges, or request a comparison for your next contract. The bill checker is not a guarantee of savings or a binding tariff quotation.
Reviewed on 30 September 2026 for businesses in Great Britain.
