Are business electricity rates coming down?

Are your electricity bills finally cooling off—or are we just catching our breath?

Back in 2022, small businesses in the UK were paying more than 53p per kWh for electricity—a painful spike driven by the energy crisis. Fast forward to 2025, and things have improved. Today, average rates for small businesses sit around 24–27p per kWh, with large businesses even securing deals as low as 21p. That’s a 22.9% drop year-on-year for small firms.

But before we celebrate, here’s the kicker: bills are still up to 70% higher than what they were in 2020. So, yes—prices have come down, but no—they haven’t come back to earth.

As someone who lives and breathes the UK’s business energy landscape, I get it. You’re not just chasing lower rates; you’re trying to regain control.

Current State of Business Electricity Rates

🇺🇸 U.S. Snapshot

Electricity prices in the U.S. aren’t showing a clear downward trend. In fact, according to the Energy Information Administration (EIA), 42 states saw a bump in revenue per kilowatt-hour as of February 2025.

Some areas are getting hit harder than others. Rhode Island saw rates spike by 20.6%, while Nevada offered some relief with a 14.3% drop. California remains one of the highest-cost states—San Diego Gas & Electric customers are dealing with a 9% yearly increase.

🇬🇧 UK Market Trends

There’s better news in the UK. Business electricity rates peaked in 2022, with small businesses paying over 53p/kWh. Fast forward to 2025, and things look calmer. Rates have dropped to around 24–27p/kWh for small businesses, and large companies can lock in deals as low as 21–23p/kWh.

That’s a big drop—22.9% down for small businesses from 2023 to 2024—but it’s not all rosy. Bills are still around 70% higher than they were before the pandemic.

What’s Driving These Changes?

Demand is Growing

More data centres, electric cars, and heating systems are switching to electric power. That’s good for the environment, but it also means the grid is under more pressure than ever.

The Grid Needs Help

Ageing infrastructure across both countries adds to the problem. In the U.S., much of the grid needs upgrades. In the UK, capacity issues and supplier hedging practices (buying energy at past high prices) keep prices higher than you’d expect.

Policy Plays a Role

In the U.S., the Inflation Reduction Act helps invest in clean energy, which could balance prices over time. But business customers still don’t get the price protections that households do. In the UK, there’s no price cap for businesses at all, making market timing essential.

Wholesale Prices Are Moving

Wholesale electricity prices dropped 14.4% in early 2025 in the UK, thanks to more wind power and better supply. But for businesses, retail prices don’t fall as quickly. Suppliers still recover older costs and hedge against future risks.

And don’t forget global events—like gas supply issues or extreme weather. These can push prices up with little warning.

Are Rates Really Coming Down?

Yes—In Some Places

Nevada and Hawaii in the U.S. saw rate drops. South Australia slashed business rates by 8.2% due to a strong push into renewables. In the UK, rates are way down from the 2022 peak.

But Not Everywhere

In most U.S. states, prices are still going up. Infrastructure upgrades, policy gaps, and growing demand mean the average rate is expected to rise about 2.9% in 2025. UK prices, while lower, remain well above pre-2020 levels.

What Experts Say

Analysts at Cornwall Insight and Bionic agree: prices have stabilized, but don’t expect a full return to the “old normal.” Electricity rates are expected to stay higher than before for years to come.

What Can You Do to Keep Costs Down?

Cut Energy Waste

Switch to LED lighting. Use smart meters to track where power is going. Small changes in how and when you use energy can make a big difference, especially during peak hours.

Consider Renewable Options

Solar panels or wind turbines could help you cut ties with volatile market prices. If your area offers Community Choice programs (like Boston’s BCCE), you can access cleaner, possibly cheaper electricity, too.

Lock in a Good Rate

A fixed-rate electricity deal can protect you from surprise increases. But timing is key. If you lock in too high, you may miss out on future savings. That’s why regular business electricity comparison is so important.

Conclusion

Electricity prices in 2025 are a mixed bag. While some regions see drops, many businesses are still dealing with higher bills than they’d like. The key is to stay informed, act early, and take control of your energy strategy.

Want help cutting through the confusion? Utility4Business makes it easy for UK businesses to compare live electricity rates and lock in the best deal—fast. Our experts track the market so you don’t have to.