By ENEREKA · March 2026
On 1 April 2026, the domestic energy price cap drops by approximately 7%, bringing the average household bill down to around £1,641 per year. You’ll see this reported as welcome relief from high energy costs. If you run a commercial building, a hotel, a factory, or any other business premises, it’s worth understanding why this headline is essentially irrelevant to your situation — and what’s actually happening to the costs you’re paying.
The price cap doesn’t cover commercial energy
This is widely misunderstood. The Ofgem price cap applies exclusively to household customers on default or variable tariffs. It has no bearing on commercial or industrial energy contracts. Businesses negotiate their own supply agreements, and the prices they pay are determined by wholesale market rates, network charges, policy levies, and their supplier’s margin — none of which are subject to the cap.
When domestic bills fall, it doesn’t follow that commercial bills will too. In fact, the mechanisms are often inversely related: the government has reduced domestic bills partly by shifting certain environmental levies off household accounts and onto general taxation or onto commercial charges. The household customer’s saving may partly be funded by costs redistributed elsewhere in the system.
What’s actually happening to commercial energy costs in 2026
For businesses, the electricity cost picture in 2026 is shaped by three forces operating simultaneously.
Wholesale prices are relatively stable but still elevated. The extreme volatility of 2022-2023 has subsided, and forward wholesale prices have moderated. However, “moderated” means roughly double the pre-2021 levels, not a return to the prices businesses were paying before the energy crisis. Gas prices — which still set the marginal price of electricity for much of the day — remain structurally higher than the era when UK businesses built their energy budgets.
Network charges are increasing sharply. Transmission network use of system (TNUoS) charges are rising by over 60% year-on-year from April 2026. This reflects the massive investment programme in transmission infrastructure needed to connect offshore wind farms, reinforce the grid, and support the Clean Power 2030 target. Gas network charges are also increasing under the new RIIO-3 regulatory period. These are pass-through costs on your bill that no amount of supplier negotiation can avoid.
Non-commodity costs now dominate. Industry analysis indicates that non-commodity charges — network costs, policy levies, capacity market charges, and balancing costs — now account for close to 60% of a typical commercial electricity bill. The wholesale energy price, which gets all the media attention, is less than half of what you actually pay per kilowatt-hour.
Why this matters for energy investment decisions
The implication is that commercial energy costs are not going to fall back to pre-crisis levels, even if wholesale markets continue to soften. The structural component of the bill — the infrastructure, the policy costs, the network investment — is on an upward trajectory driven by the energy transition itself.
This changes the economics of energy efficiency investment in a straightforward way: the more expensive each kilowatt-hour is, the more valuable each kilowatt-hour you avoid consuming becomes.
A building fabric upgrade that saves 50,000 kWh per year was worth approximately £5,000 annually at 2020 electricity prices. At 2026 fully-loaded commercial rates, that same saving is worth £11,000–£14,000 per year. The measure hasn’t changed. The payback period has roughly halved.
The same arithmetic applies to on-site generation. Every kilowatt-hour your rooftop solar array produces displaces a grid kilowatt-hour at the full loaded rate — wholesale price plus all the network and policy charges you’d otherwise pay. As those charges increase, the value of self-generation increases in step.
The practical takeaway
If your last energy review was conducted before the current cost structure took hold — before non-commodity charges reached their current levels, before the TNUoS increases, before the post-Ukraine wholesale recalibration — the financial cases in that review are out of date. Measures that looked marginal two or three years ago may now have strong paybacks. Investments that seemed like long-term plays may now pay for themselves in half the time.
It’s worth revisiting the analysis with current cost inputs. The external context has changed enough that the conclusions may be different.
ENEREKA provides independent energy strategy and decarbonisation analysis for commercial and industrial organisations. We work with current tariff data and realistic cost projections — not assumptions from a different era.
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