Business Energy for Commercial Landlords
Commercial landlords deal with energy in three situations: empty (void) units, common areas they supply themselves, and lettings where energy is recharged to tenants. Each needs a different approach.
Where landlords pay for energy
- Void periods: between tenancies the landlord is usually responsible for the supply, often on expensive deemed rates.
- Common areas: lighting, lifts, heating and car parks in shared buildings.
- Landlord-supplied units: where the landlord holds the contract and recharges tenants.
- Portfolios with several sites can often get better terms on a single multi-site contract.
Choosing a contract and supplier
- Put void properties onto a proper contract quickly instead of leaving them on deemed or out-of-contract rates.
- Look for suppliers that offer void-property or multi-site products with one consolidated bill.
- When a tenant takes over, record meter readings on the handover date and tell the supplier straight away.
- If you recharge energy to tenants, keep the meter readings and recharge method clearly in the lease.
Cutting costs and staying compliant
- Commercial properties in England and Wales generally need an EPC rating of E or better to be let (Minimum Energy Efficiency Standards); improving the rating can also reduce void energy costs.
- Fit timers and sensors on common-area lighting and heating.
- Turn off or minimise supplies in long-term voids, keeping only what is needed for safety and security.
- Use smart or half-hourly meters to spot unexpected usage in empty units.
Frequently asked questions
Who pays the energy bills in an empty commercial property?
Usually the landlord or property owner is responsible while a unit is vacant. If no contract is in place, the supplier will charge deemed rates, which are typically high — so arrange a contract as soon as a unit becomes empty.
Can a commercial tenant choose their own energy supplier?
If the tenant pays the supplier directly and the meter is in their name, they can usually switch. Where the landlord holds the contract and recharges the tenant, the lease decides who chooses the supplier.
Is business energy covered by the Ofgem price cap?
No. The Ofgem price cap only applies to domestic tariffs. Business energy prices are set by each contract, which is why comparing quotes before your renewal date matters so much.
How much VAT and Climate Change Levy do businesses pay on energy?
Business energy normally carries 20% VAT plus the Climate Change Levy (CCL). If your usage is very low (under 33 kWh of electricity or 145 kWh of gas per day on average) the supply counts as "de minimis": VAT drops to 5% and CCL is not charged. Check your bill shows the correct rate.
Am I a microbusiness, and why does it matter?
You are a microbusiness if you have fewer than 10 employees (or equivalent) and annual turnover or balance sheet of no more than €2 million, or if you use under 100,000 kWh of electricity or under 293,000 kWh of gas a year. Most cafés, takeaways and small restaurants qualify, and microbusinesses get extra Ofgem protections — including being told how much of the price goes to a broker, and access to the Energy Ombudsman for complaints.
What happens if my business contract ends and I do nothing?
You may be rolled onto a new contract or moved to "out-of-contract" or "deemed" rates, which are usually much more expensive. Note your contract end date and the notice window in your terms, and start comparing quotes a few months before it ends.
More business energy guides
This guide is general information, not financial advice. ChangeEnergyProvider.com is independent and not paid by any supplier.