← Insights

Business Energy Price Caps Explained: What Commercial Customers Need to Know in 2026

Business Energy Price Caps Explained: What Commercial Customers Need to Know in 2026

The short answer: there is no Ofgem price cap for business energy

The Ofgem energy price cap applies to domestic customers on standard variable or default tariffs.

It does not apply to commercial energy contracts.

That distinction matters for every business using energy across offices, gyms, pubs, hotels, restaurants, retail units, warehouses and commercial property portfolios.

If your fixed business energy contract ends, or you move into a property without arranging a contract, your supplier can place you on a deemed or out-of-contract rate. These rates are not limited by the domestic price cap and can be considerably more expensive than a negotiated business tariff.

Ofgem explains the scope of the price cap in its energy price cap guidance.

The practical message is simple:

Do not use the household price cap as a benchmark for your commercial energy costs.



What the Ofgem price cap actually covers

Ofgem reviews the domestic price cap every three months. It limits the unit rates and standing charges that suppliers can charge eligible household customers on default tariffs.

The cap is designed to protect domestic customers who have not actively chosen a different tariff.

It is not a maximum price for all energy users.

It does not cover:

  • Most business and commercial energy contracts
  • Fixed domestic tariffs
  • Deemed business rates
  • Out-of-contract business rates
  • Commercial contract structures agreed directly between a supplier and a business

The cap is therefore relevant when discussing household bills, but it should not be used to judge whether your business is paying a competitive rate.



How commercial energy costs are really shaped

Business energy pricing is more bespoke than domestic pricing. The cost shown on your bill may reflect several different elements, each affected by your contract and market conditions.

1. Wholesale energy prices

Suppliers buy energy in advance, closer to the time of use or through a mixture of purchasing strategies. Your contract may therefore reflect:

  • Forward wholesale electricity and gas prices
  • The supplier’s hedging approach
  • Market volatility
  • Risk premiums
  • Supplier margin and credit assessment

A fixed-rate contract can provide budget certainty, but the price is set according to market conditions when you agree it. A flexible contract may give you more control, but it requires closer management and a clear risk strategy.

2. Unit rates and standing charges

The unit rate is the price paid for each kilowatt-hour of energy used.

The standing charge is a daily cost applied regardless of consumption.

Both matter, but neither should be reviewed in isolation. A low unit rate can be undermined by:

  • High standing charges
  • Poorly matched contract terms
  • Excess capacity charges
  • Unfavourable payment terms
  • Consumption outside expected patterns
  • Operational waste within the building

This is why comparing headline rates alone can produce a misleading result.

3. Network and policy costs

Commercial bills can include charges related to the electricity and gas networks, along with government programmes and industry obligations.

Transmission and distribution charges can vary according to location, demand and the way energy is used. For some businesses, changes to network costs can materially affect the overall bill even when the underlying unit rate appears competitive.

For context, Ofgem’s latest domestic price cap publications show how frequently the regulated domestic market is reviewed. Commercial customers need to monitor their own contract and cost structure instead.



Deemed rates: the expensive default

A deemed rate usually applies when a business is using energy at a property without having agreed a contract with the supplier.

This can happen when:

  • A business moves into new premises
  • A landlord changes tenants
  • A previous occupier leaves without closing the account
  • A contract is missed during a change of ownership
  • A site is temporarily vacant but still consuming energy

The supplier will generally continue to provide energy, but the business is charged on a rate set by the supplier. Deemed rates are often higher because they do not provide the supplier with the certainty of a fixed-term agreement.

There is no Ofgem price cap to limit the rate.

If you have recently acquired, leased or inherited a commercial site, check immediately:

  • Which supplier currently provides the energy
  • Whether the site is on a contract or deemed terms
  • The current unit rates and standing charges
  • The date from which the rates apply
  • Whether historic consumption data is available
  • Whether a new contract can be arranged quickly

Leaving this review until the next bill arrives can mean paying avoidable costs for weeks or months.



Out-of-contract rates and missed renewals

When a fixed-term business contract ends, the supplier may move the account to an out-of-contract, rollover or default business tariff if no new agreement has been arranged.

These rates can be significantly higher than negotiated contract rates.

The risk is particularly easy to miss in busy organisations. Energy decisions may sit between finance, facilities, operations and the landlord. Nobody is necessarily ignoring the renewal : it simply may not have a clear owner.

Every business should maintain a simple contract calendar showing:

  • Contract start and end dates
  • Renewal or termination notice windows
  • Current unit rates and standing charges
  • Site meter numbers
  • Annual consumption
  • Supplier contact details
  • Any pass-through or variable charges
  • The person responsible for approving a new contract

For a multi-site portfolio, centralising this information can quickly reveal where contracts are approaching expiry or where sites are being billed on inconsistent terms.



A cheaper tariff will not fix an inefficient building

This is the point most price comparisons miss.

Procurement matters. But it is only one part of the commercial energy picture.

If HVAC systems operate outside occupied hours, refrigeration is poorly maintained, lighting remains on in empty areas or heating controls are misconfigured, a cheaper unit rate will simply reduce the cost of wasting energy. It will not remove the waste itself.

The best commercial strategy combines two reviews:

Contract performance

Ask:

  • Are we on the right type of contract?
  • Are we approaching renewal at the right time?
  • Are we exposed to deemed or out-of-contract rates?
  • Do the standing charges and pass-through costs make sense?
  • Are all sites being billed correctly?
  • Is our contract aligned with our risk appetite?

Building performance

Ask:

  • Which systems use the most energy?
  • Are plant and equipment operating as intended?
  • Are controls and schedules aligned with actual occupancy?
  • Are there avoidable base loads overnight?
  • Are maintenance issues increasing consumption?
  • Which improvements could be delivered with minimal disruption?
  • How will savings be measured after action is taken?

A thorough Discovery Assessment connects the bill to the building. It looks at major loads, equipment settings, operating routines and practical opportunities for improvement.



What different commercial sites should review now


Offices

Review heating, cooling, ventilation, lighting schedules and out-of-hours consumption. Hybrid working patterns can leave buildings conditioned and illuminated well beyond actual occupancy.


Gyms and leisure facilities

Check ventilation, hot water, pool or shower demand, refrigeration and extended operating hours. Always-on sites can carry substantial baseloads that are rarely challenged.


Pubs, hotels and restaurants

Look closely at refrigeration, kitchens, hot water, heating and cooling. Equipment may run continuously, even where opening hours or occupancy fluctuate.


Retail sites

Compare energy use with trading hours and floor area. Display lighting, refrigeration, HVAC and signage should all be assessed against actual footfall and operating requirements.


Warehouses

Review lighting controls, heating zones, loading areas, refrigeration where relevant and energy use during periods of low activity.


Landlord portfolios

Create a consistent energy and contract view across the estate. Identify which costs sit with the landlord, which sit with tenants and where void periods may expose properties to deemed rates.



A practical 2026 review process

A sensible review does not need to become a major internal project.

Start with these five steps:

  1. Collect your current bills and contracts.
    Include every meter and site, not just the largest property.

  2. Check your contract status.
    Identify fixed, flexible, deemed and out-of-contract arrangements.

  3. Map renewal dates.
    Give your team enough time to compare options before notice periods expire.

  4. Review consumption, not just prices.
    Look for unusual baseloads, seasonal changes and consumption outside operating hours.

  5. Prioritise actions by commercial value.
    Separate no-cost operational changes from technology opportunities, then rank each by savings potential, payback, complexity and how results will be verified.

Green Wing can support this process as an independent commercial energy consultancy. We do not install equipment. Instead, we assess the building, identify suitable opportunities, source quotes from a vetted supplier network and manage the process from approval through to completion.

Where an installation is appropriate, we can also help mediate between the client and installer so responsibilities remain clear.

Explore our wider Services and the Solutions we assess when site conditions support them.



Why independent advice matters

An independent review should not begin with a product or a supplier target.

It should begin with evidence.

Green Wing has worked in commercial energy optimisation since 2009 and has assessed more than 25 technologies across real operating sites. The company is also an approved assessor for the Groundwork VCSE Energy Efficiency Scheme and can support ESOS-related evidence where appropriate through qualified assessor review.

The approach is straightforward:

  • Measure first
  • Fix operational issues first
  • Recommend technology only where it suits the site
  • Rank opportunities by commercial value
  • Include a route for verifying savings

That is how energy savings solutions become practical business decisions rather than a list of generic recommendations.



The bottom line

The Ofgem price cap is a domestic protection, not a commercial safety net.

For businesses, energy costs depend on the contract you have agreed, the market conditions behind it, the timing of your renewal and the way your building actually operates.

Review both sides of the equation:

  • Are you buying energy on appropriate commercial terms?
  • Are you using energy efficiently once it reaches the building?

Green Wing’s About Us page explains more about our independent, evidence-led approach.


Book your Discovery Assessment today and take the first step towards a more efficient business.

For a practical conversation about your building or estate, contact Jon.

Arrange an Energy Review Start with a free 15-minute discovery call.

Next step

See what your estate is really doing with energy.

Arrange an Energy Review

Start with a free 15-minute discovery call.