Bills, meters and consumption
Business energy standing charges and unit rates explained
What is the difference between a standing charge and a unit rate?
The unit rate is the price applied to each kilowatt-hour of electricity or gas used. The standing charge is a fixed daily amount for keeping the supply available and administering it, whether or not much energy is consumed. Neither figure alone tells you the total cost: compare both using realistic consumption and check which other charges are included, fixed or passed through.
Written by Energy Guide editorial team · Specialist review: Pending · Source checked:
The two basic calculations
A unit rate is normally stated in pence per kilowatt-hour and changes the bill in proportion to consumption. A standing charge is normally stated per day and continues even during periods of low or no use.
A low unit rate paired with a high standing charge may suit a high-consuming site differently from a lightly used location. Model the expected annual cost for each actual supply point rather than choosing the smallest headline number.
The bill contains more than two lines
Quotes and bills may also contain network, capacity, metering, environmental, tax or other contract components. Some products bundle these into a rate while others identify or pass them through separately.
- Confirm whether prices exclude or include VAT and Climate Change Levy
- Check which components are fixed for the term
- Use the same annual consumption for every quote
- Compare the full-term cost, not one pence-per-kWh figure
- Keep electricity and gas supplies separate
Use site-level evidence
Reconcile the legal customer, site, MPAN or MPRN, billing period and consumption before comparing costs. For a multi-site estate, one blended figure can conceal very different standing charges or usage profiles.
Sources
These sources support the explanation above. Check the linked source for current rules and eligibility.