Our latest analysis suggests small businesses renewing electricity contracts in 2026 could face a significant increase in annual costs.
Based on a notional SME consuming 10,000 kWh per year, annual electricity costs are projected to rise from approximately £3,420 in 2024 to around £3,900 in 2026. For many businesses, this represents a £480 increase when compared with customers rolling off a typical 24-month contract.
The insight below highlights how non-domestic electricity costs have evolved over recent years, the scale of the projected increase facing SMEs, and why renewal conversations are becoming increasingly important for both customers and suppliers.
The widening SME energy gap
The projected increase in renewal costs builds on a broader trend we explored in our recent article, The SME Energy Gap: Small businesses pay 31% more per kWh.
In that analysis, we highlighted how smaller businesses are increasingly exposed to rising non-commodity costs and higher unit rates than larger energy consumers. While much of the focus has been on domestic affordability, many SME customers continue to face significant cost pressures of their own.
Some of the key themes included:
Small businesses are currently paying around 31% more per kWh than higher-consuming organisations
Rising non-commodity costs are having a disproportionate impact on lower-consuming customers
Growing affordability pressures increase the risk of bad debt, servicing demand and operational strain for suppliers
Renewal periods are becoming increasingly important opportunities to support customers and strengthen commercial relationships
Read the full article: The SME Energy Gap: Small businesses pay 31% more per kWh.
If you'd like to discuss the implications of rising SME energy costs, customer affordability or renewal strategy in more detail, contact Hannah Sword.
