Energy Bill Price Breakdown | Midshire Telecom

Energy Bill Price Breakdown

Energy Bill Price Breakdown

No two invoices are the same and each energy supplier is likely to have a different layout and may use different terminology on the bills they issue to you. Regardless of who your business energy supplier is, we’ve created a quick overview of what your energy bill is made up of.

The price you pay for your business energy is made up of six parts; wholesale costs, delivery costs, government environmental and social schemes, operational costs, VAT and your energy supplier’s profit. We’ve broken down and explained these costs so you can better understand your business energy bill.

1. Wholesale cost – A large proportion of your bill is made up from the cost that your energy supplier pays to buy the energy they supply to your business

2.Delivering the energy to your business – transporting energy to your business premises can be expensive so a proportion of your bill covers your suppliers’ energy transportation costs and national grid maintenance contribution. It also contributes to the cost of having a meter at your business.

3. Customer support – which includes billing, customer service and IT systems that help us support your business.

4. Government environmental and social schemes – The climate change levy is a tax which was introduced in 2001 to encourage various sectors to improve their energy efficiency and help towards UK carbon net neutrality by 2050.

5. VAT – This is usually at 5% for domestic bills and 20% for businesses. It can be a little complicated though, some charities will pay the lower tax as well as some businesses that don’t spend what is known as the de minimis threshold.

6. Our supply business profit 

The cost of electricity is constantly fluctuating but is generally on the increase. Many businesses are paying more than they should be for their business electricity. While it might sound like a bit of a hassle to change suppliers, it really is beneficial for your business.

Changing business energy providers is one of the quickest ways to save money. If you’ve been with the same supplier for a number of years, you might have noticed your prices slowly increasing. You’re probably paying far more than you need to for your electricity and by switching providers you can reduce costs and redirect that money to more important things.