Business energy consumption is the amount of gas and electricity a business uses, as recorded by the site’s meters, and is a key driver of its energy bills.
This guide explains how it differs from energy demand, what drives consumption (and bills) up or down, and practical ways to measure, track and reduce business energy consumption.
What is business energy consumption?
Business energy consumption is the amount of gas and electricity a business uses over a given period, forming the basis for what it’s charged on its business energy bills.
Electricity consumption is measured in kilowatt hours (kWh), the amount of energy used by running a 1 kilowatt load for one hour. Larger consumers may receive this in megawatt hours (MWh), where 1 MWh equals 1,000 kWh, or gigawatt hours (GWh), where 1 GWh is 1,000,000 kWh.
Gas consumption is measured at the meter in cubic metres (or cubic feet on older meters), then converted to kWh for billing using the gas’s calorific value.
Energy consumption is not the same as energy demand, which is the rate at which energy is being consumed, measured in kilowatts. Energy consumption is the sum of the demand over a measurement period.
What is the average energy consumption for a business?
A business’s energy consumption is made up of electricity and gas, which are metered separately, so each has its own average.
The figures below are based on official government data for Great Britain. Actual consumption depends on each business’s activities and premises.
Average business electricity consumption
Typical SME: ~580 kWh a month
A typical business electricity meter uses roughly 6,900 kWh a year, which is approximately 580 kWh a month.
The average across all business meters is much higher, at roughly 61,500 kWh a year. This is because a small number of very large users, such as factories and data centres, push the average up, so the median value is a more representative guide for most SMEs.
Sources: DESNZ, Regional and local authority electricity consumption statistics, 2024
Average business gas consumption
Typical SME: ~12,000 kWh a month
A typical business gas meter uses roughly 148,000 kWh a year, around 12,350 kWh a month.
The average across all business meters is much higher, at roughly 675,000 kWh a year, because a small number of very large users, like gas power stations, push it up.
Sources: DESNZ, Regional and local authority gas consumption statistics, 2024.
Business electricity and gas consumption by sector
Energy consumption varies significantly by sector. Factories use more electricity and gas than any other sector in England and Wales, largely because of the heat-intensive processes involved in industrial production.
Offices, shops and warehouses follow as the next biggest electricity users, while sectors such as health, the arts and emergency services use comparatively little.
Below is a summary of the government’s official consumption figures by sector for England and Wales, covering both electricity and gas.
Source: Non-Domestic National Energy Efficiency Data-Framework (ND-NEED) 2025, GOV.UK
What affects business energy consumption?
A business’s energy use depends on how much energy its site requires and how efficiently that energy is used.
Factors that affect the total energy demand
Energy demand comes down to how a business operates, what it runs and where it’s based. Here are most common factors:
- Operating hours: Businesses trading 24/7 or running extended shifts use more energy than those open standard daytime hours, through longer lighting, heating and equipment use.
- Equipment and processes: Energy-intensive machinery, catering equipment, refrigeration or industrial processes drive up consumption regardless of premises size.
- Premises size and layout: Larger or poorly designed spaces need more energy to heat, cool and light, though consumption doesn’t always rise in proportion to size.
- Weather and seasonality: Cold winters increase heating demand, while hot summers increase cooling demand at sites that rely on air conditioning.
Factors that affect energy efficiency
Two similar businesses can use very different amounts of energy depending on how efficient their premises and systems are. Here the key factors impacting energy efficiency:
- Building age and insulation: Older, poorly insulated buildings need more heating and cooling to maintain the same conditions as modern ones.
- Heating and cooling systems: The type and efficiency of HVAC systems has a major effect, particularly where heating or refrigeration demands are high.
- Efficiency upgrades: LED lighting, smart controls and similar upgrades can meaningfully cut consumption for any size or type of business.
How to calculate your business energy consumption
There are several ways to work out how much energy a business uses, depending on how much detail is needed and what metering is in place.
Calculating consumption from meter readings
The most direct way to calculate consumption is to compare two meter readings taken at different points in time.
Electricity meter readings
Electrical energy consumption is calculated as:
Consumption (kWh) = Current reading − Previous reading
For example, a meter moving from 45,210 to 46,830 means 1,620 kWh were used.
Gas meter readings
Gas meters record volume in cubic metres, which needs converting into kWh:
Consumption (kWh) = (Current reading − Previous reading) × 1.02264 × calorific value ÷ 3.6
The calorific value is shown on the gas bill, typically around 39.5. As a rule of thumb, each cubic metre is approximately 11 kWh.
Calculating consumption from electricity bills
Every business electricity bill shows the consumption for the billing period in kWh, calculated from the opening and closing meter readings.
It’s worth checking whether these readings are actual or estimated, since estimated readings do not reflect the true usage and will require a correction later on.
Calculating consumption from gas bills
A business gas bill also shows consumption in kWh, with the supplier converting the meter’s volume reading using the gas’s calorific value.
This makes the bill the easiest place to find gas consumption in a form that can be compared with electricity.
Calculating consumption from smart meters and supplier portals
Smart and half-hourly meters send readings automatically, so consumption can be viewed online without taking readings manually, often down to daily or half-hourly usage.
This data is usually available through the supplier’s online portal. Alternatively, our Consultiv Connect platform aggregates half-hourly, daily and monthly consumption across all their meters in one place, regardless of supplier.
Energy monitoring and management systems
Energy monitoring software brings meter and sub-meter data together in one place, showing consumption by site, area or piece of equipment, rather than just for the premises as a whole.
As part of a wider energy management system, it can also track consumption against targets and flag unusual usage automatically.
Is your business using too much energy?
There’s no general benchmark that defines a normal energy usage for a specific business, but a few practical checks that can show whether a business is using more electricity and gas than it should, and where.
These are the main ways:
Compare against similar businesses
Energy consumption varies widely between industries, so the most useful comparison is with businesses in the same sector.
Industry publications, trade associations and sector reports often publish typical energy usage figures, giving a quick sense of whether consumption is in the normal range.
Usage above these figures isn’t necessarily a problem, since equipment, opening hours and premises can all explain genuine differences, but it’s a good starting point to look more closely using the checks below.
Check usage outside operating hours
For most businesses, consumption should drop significantly overnight and at weekends. If it stays close to daytime levels, equipment, lighting or heating is likely being left on unnecessarily.
Energy monitoring data makes this easier to spot, as it shows usage throughout the day. For older meter types that aren’t automatic, a reading taken at closing time and again before opening the next morning shows how much was used overnight.
Look for unexplained increases
A steady rise in usage with no change in hours, staff or equipment often points to a developing fault, such as an ageing boiler, failing refrigeration or faulty controls.
Comparing bills with the same period last year helps separate genuine increases from seasonal changes.
Get an energy audit
A professional business energy audit measures actual usage rather than estimating it, often using sub-metering to pinpoint exactly where energy is being used and where savings can be made. It’s the most accurate way to find out whether, and why, a business is using too much energy.
How to reduce business energy consumption
Most businesses can reduce their energy consumption through a few common measures, starting with the cheapest and quickest wins:
- Switch off equipment when not in use: Shutdown routines for lighting, computers, machinery and heating cut waste outside operating hours at no cost.
- Service and maintain equipment: Well-maintained heating, air conditioning, refrigeration and machinery use less energy to do the same job.
- Install heating and lighting controls: Timers, smart thermostats, motion sensors and zoned heating stop energy being used in empty spaces.
- Upgrade to LED lighting: LEDs use significantly less electricity and last much longer than fluorescent or halogen lighting.
- Replace inefficient equipment: Swapping the least efficient appliances, motors and heating systems when they are due for renewal delivers the largest savings.
- Improve the building’s insulation: Insulating walls, roofs and windows, and sealing draughts, reduces the energy needed for heating and cooling.
Once changes are in place, tracking consumption over time confirms they’re working and catches any new waste early.
Alongside this, it is worth reviewing the price paid for energy. Businesses can compare business energy quotes from trusted business energy suppliers, to make sure they are not overpaying, regardless of consumption reduction efforts.
How to track business energy consumption over time
Tracking energy consumption is what makes reduction effective. It is the intelligence layer that informs priorities, quantifies the impact of changes, and identifies usage anomalies before it materially impacts costs.
Here’s how to set up that tracking, in general terms:
- Establish a baseline: Record typical usage over a representative period before implementing any changes, so subsequent readings can be assessed against a reliable point of reference.
- Set up a data collection system: Can be automated, through smart meters, half-hourly meters, or sub-metering, or manually. Consistency is more important than the method itself.
- Review on a set schedule: Assess usage at regular intervals rather than ad hoc, so that comparable data is generated and issues are identified before becoming significant.
- Compare against appropriate reference points: Evaluate like-for-like periods, such as the same month in the prior year, record any operational changes alongside the data to account for spikes or dips.
Business energy consumption FAQs
Our business energy experts answer commonly asked questions regarding the consumption of electricity and gas at business premises:
How does energy consumption affect a business energy bill?
Consumption is the main driver of an energy bill, as the kWh used in each billing period is multiplied by the unit rate agreed with the supplier, then added to the daily standing charge, the Climate Change Levy and VAT.
Visit our full guides to business electricity prices and business gas prices to understand how energy consumption impacts bills for businesses.
Does the timing of energy consumption matter for a business?
Yes, network charges such as DUoS cost more at peak times, while the site’s busiest half hour sets its maximum demand, which affects capacity charges.
Does high energy consumption change the type of contract a business can get?
Yes, businesses with high, consistent consumption may be able to access flexible energy contracts, in which the energy is bought gradually to average the cost of energy and reduce the effect of large hikes in business electricity prices and business gas prices
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