By ENEREKA · March 2026
The latest government energy statistics, published in February 2026, confirmed a milestone that passed with surprisingly little fanfare: renewable sources accounted for 53.3% of electricity generation by major UK power producers in the final quarter of 2025. Low-carbon generation overall — renewables plus nuclear — reached 65.5%.
For anyone working in energy strategy, the number itself isn’t shocking. The trajectory has been visible for years. What’s more interesting is what it means in practice for commercial and industrial energy users — and the answer is more nuanced than “cheaper, greener electricity.”
The generation mix is changing faster than the system around it
The UK’s electricity is now majority-renewable in terms of generation volume. Offshore wind, onshore wind, and solar PV have collectively displaced a significant portion of gas-fired generation, which fell to 33.7% of the mix. Nuclear dropped to a record low of 12.1%, reflecting the ageing fleet rather than any policy retreat — Hinkley Point C remains under construction, and the government continues to support new nuclear including small modular reactors.
This shift in generation, however, exists alongside an electricity system that was designed for centralised, dispatchable power stations, not distributed, variable renewables. The infrastructure needed to accommodate the new generation profile — transmission upgrades, grid connections, storage, demand-side flexibility — is being built, but it’s expensive, and those costs are increasingly appearing on commercial electricity bills.
Non-commodity costs are the story of 2026
For commercial energy users, the most consequential trend in 2026 is not the wholesale price of electricity. It’s the non-commodity charges that now make up close to 60% of a typical business electricity bill.
Transmission network charges are increasing significantly from April 2026 — in some cases by over 60% year-on-year. New cost components, including contributions to the Nuclear Regulated Asset Base (supporting Hinkley Point C), are being added to bills. The government has reallocated certain environmental levies from household bills to general taxation, but the infrastructure investment required for Clean Power 2030 has to be funded somewhere, and commercial electricity bills are carrying a growing share.
The practical implication: even if wholesale electricity prices stabilise or fall slightly (which is plausible as more low-marginal-cost renewables come online), your overall electricity cost per kilowatt-hour may not decrease. The non-commodity portion keeps rising.
What this means for investment decisions
For building owners, hotel operators, manufacturers, and other commercial energy users, this creates an environment where energy efficiency and on-site generation become increasingly attractive — not just for carbon reasons, but for straightforward financial ones.
Three points are worth considering.
First, reducing total electricity consumption remains the most reliable way to cut costs. Regardless of how the bill is structured, using fewer kilowatt-hours means paying less. The efficiency measures that have always made sense — LED lighting, improved controls, heat recovery, system right-sizing — now have a stronger financial case than they did two years ago, because the per-unit cost of the electricity you avoid consuming has risen.
Second, on-site solar generation has become materially more attractive. Industry analysts expect over 1GW of new behind-the-meter solar and storage capacity to be deployed by UK businesses in 2026 alone. The economics work because every kilowatt-hour generated on your roof avoids both the wholesale and the non-commodity charges you’d otherwise pay for grid electricity. With commercial solar payback periods now typically in the range of 5-8 years (shorter for high-consumption sites), and panel lifespans exceeding 25 years, the investment case is strong.
Third, battery storage paired with solar extends the value further. A solar array without storage generates electricity that may not align with your peak consumption periods. Adding storage allows you to time-shift your own generation, consume it when grid prices are highest, and in some cases participate in grid flexibility services that generate additional revenue.
The longer view
The direction is clear: the UK electricity grid is becoming greener, and the transition costs are being passed through to commercial users. Businesses that invest in efficiency and on-site generation are partially insulating themselves from both wholesale price volatility and rising network charges. Those that don’t are increasingly exposed.
None of this requires dramatic action. It does require an informed assessment of where your energy spend goes, which interventions deliver the strongest returns for your specific situation, and how to sequence them sensibly. That analysis is the starting point for any sound energy investment decision.
ENEREKA provides independent energy strategy for commercial and industrial organisations. If you’d like to discuss how these trends affect your energy costs, we’re happy to have a conversation.
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