Commercial Energy Price Trends Q2 2025: What UK Businesses Need to Know

UK businesses are once again feeling the squeeze as commercial energy prices begin to follow rises in domestic prices which have been rising since the Autumn, driven by persistent wholesale gas volatility and seasonal demand pressures. If you're operating in energy-intensive sectors or running cost-sensitive facilities, these trends are more than just news, they're a direct hit to your bottom line.

This blog explores why energy costs are increasing, what the outlook means for your business, and how you can take action now to protect yourself with an affordable, future-proof solution.

What’s Driving the Rise in Commercial Energy Prices UK?

EDF Energy points out that small business prices often follow domestic price trends but without the protection of a price cap. As domestic energy caps rise in response to wholesale market shifts, the commercial sector usually sees a parallel increase, albeit without the protective ceiling that households benefit from.

Recent Price Movements (Q3 2024 to Q2 2025)

• The Ofgem domestic price cap has seen multiple rises since Q3 2024 and is now over 12% higher than last summer. This has largely been due to:

  • Higher wholesale gas prices caused by cold weather and limited supply.

  • Ongoing global instability impacting energy imports.

  • Increased network and standing charges.

• While commercial rates vary depending on contract type, location, and usage, many companies have seen unit rates for new fixed price deals rise by 8–12% over the same period.

• Larger industrial users are even more exposed due to non-domestic volatility and lack of long-term tariff stability.

These increases come on top of already high operating costs and squeezed margins across multiple UK sectors.

The Real-World Impact for UK Businesses

The ongoing rise in commercial energy prices is more than a temporary inconvenience, it's part of a broader, increasingly unsustainable pressure on UK businesses already grappling with a perfect storm of financial and operational challenges.

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Rising operational costs across the board: Energy is just one component of a growing list of cost increases affecting UK companies in Q2 2025:

• Electricity and gas prices continue to rise, with businesses paying significantly more than they were just two quarters ago, in some cases up to 12% more.

• Wage inflation remains stubbornly high, with payroll costs eating into profit margins.

• The increase in National Insurance contributions from April 2025 is adding further pressure.

• Supply chain inflation is still present, with suppliers passing on higher costs.

• Business rates and insurance premiums have also increased, particularly for businesses with large physical premises.

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Volatility is the new normal: The wholesale electricity market is increasingly volatile, and UK businesses are particularly exposed to this unpredictability. With no domestic-style price cap, companies must either absorb these price spikes or try to renegotiate contracts under challenging conditions.

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Tightening margins and profit erosion: Rising utility costs are directly impacting profitability. While some businesses attempt to pass on these costs to customers, many can't, leading to margin compression and difficult decisions around staffing, R&D, and customer investment.

 

Quick Stat Snapshot (Q2 2025): Commercial Energy Pressures at a Glance

🔼 Electricity prices for businesses up 8-12% since Q3 2024*

💷 Employer National Insurance costs rose by 2% in April 2025

⚡ UK businesses pay 2–3x more for electricity than five years ago*

🧾 Over 60% of UK SMEs report energy bills as a key barrier to growth*

🔄 72% of firms say energy price volatility is hampering financial forecasting*

*Sources: EDF, Ofgem data, Federation of Small Businesses (FSB)

Energy isn’t just a utility anymore, it’s a strategic cost line with the power to make or break profitability. Businesses should start thinking like energy investors, not just consumers

What Optify is Doing to Help

Renewable energy has long been a good solution to these problems but the high capital cost has been a barrier, until now.

Our mission is to get more decarbonisation and energy efficiency projects done by making them more affordable and optimising them for benefits realisation, thereby strengthening the business case for projects to proceed, unlocking your ability to reduce energy costs. With 25 years of experience acting as trusted advisors delivering transformation projects that help clients run their businesses more efficiently, more safely and more profitably, you’re assured that our solutions are business oriented and focused on helping you solve your biggest challenges.

What we do is business and not technical oriented as we support you in identifying how renewable energy can help you achieve your objectives and maximise the opportunity. We’re focused entirely on your outcome and not the number of solar panels on your roof or installer and funder profits.

What Sets Us Apart:

🔧 We don’t sell solar panels, we solve problems. Unlike the traditional renewable energy model that focuses on selling and fitting equipment, we begin by understanding your objectives; cost savings, energy resilience, sustainability, or all three. We keep suppliers aligned to these goals so the project delivers against its objectives.

💸 Affordability. The high upfront cost is the biggest barrier to projects happening. Innovative, affordable and flexible options are needed for the UK to adopt renewable energy at scale. Affordability is the first pillar our approach is based on, it’s the key to unlocking projects. We assess the entire UK green finance market to find the best structure for your project, whether it's Power Purchase Agreements (PPAs), asset finance, leasing, or grant-supported models, so that you can move forward without paying upfront.

📊 Solutions optimised and tailored for lifetime value. We optimise solutions not just for today’s price per kWh, but for maximum lifetime savings, making sure every kilowatt generated delivers long-term ROI. Then on the funding side, we help you identify the best fit approach for funding the project. Getting this wrong can be a hidden risk to the viability or long-term success of a project; finding the best fit funding solution can increase lifetime savings by 25-30%.

🛠️ Independent. We are not tied to installers or finance providers. Our role is to represent your interests only, ensuring that every choice, from technology to finance to installation, delivers the best value to you, not to someone else's margin.

🤝 Project coordination, start to finish. We manage every part of the project lifecycle to ensure timelines, costs, and performance all stay aligned with your goals.

Who Should Be Paying Attention?

What we do is ideal for:

• Organisations seeking to lower operating costs and protect against grid price volatility.

• Organisations balancing high energy needs with tight budgets.

• Organisations navigating net zero targets on finite funding.

• Organisations wanting to future-proof operations and achieve ESG goals.

Final Thoughts: Take Control While You Still Can

Energy costs are unlikely to come down significantly before 2028. By acting now, UK businesses can lock in long-term savings, reduce risk, take control of their energy future and ultimately boost their P&L.

Whether you're just exploring your options or ready to implement a fully funded renewable energy project, our team is here to help you every step of the way.

Talk to us