Business Energy Prices in 2025: Are Costs Rising or Just Hidden?

Since the pandemic disrupted global supply chains in 2020, UK energy prices have been on a rollercoaster. The 2022 energy crisis, triggered by geopolitical tensions, sent costs soaring. Fast forward to November 2025, and while the panic has subsided, the pressure hasn’t.

Energy prices remain stubbornly high, and for many UK businesses, the real danger isn’t just rising rates. It’s the hidden costs buried in mis-sold energy contracts.

The State of Business Energy in November 2025

According to the latest data from Cornwall Insight, business energy bills are still 70% above pre-crisis levels, with small businesses now paying an average of £13,264 annually for electricity up from £7,000-£8,000 before 2021.

Wholesale prices for gas and electricity have firmed again this month, driven by supply disruptions, wind generation variability and infrastructure bottlenecks.

Despite mild weather easing demand, forward contracts suggest continued price elevation heading into winter. Businesses are bracing for sustained costs, not short-term relief.

Ofgem’s Price Cap: Ripple Effects on Businesses

While the domestic energy price cap rose by 2% from October to December 2025, reaching £1,755/year for a typical household, businesses, who aren’t protected by any cap are feeling the indirect impact:

• Rising wholesale prices affect all energy contracts, including commercial ones.

• Consumer strain leads to weaker demand, especially in retail and hospitality.

• Home-based businesses face direct cost increases due to household energy hikes.

Regional Inequality: A Postcode Lottery for Energy Costs

Not all businesses are hit equally. A recent BBC-backed report revealed that SMEs in North Wales and Merseyside pay 13% more for energy than those in London.

Why?

Third-party charges, such as network and policy costs, can make up 60% of a business energy bill, and these vary significantly by region.

This disparity is sparking debate about zonal pricing, where energy costs reflect local supply and demand. While it could benefit regions rich in renewables, critics warn it may deepen regional inequalities.

The Hidden Threat: Mis-Sold Energy Contracts

With energy costs climbing, many businesses turned to brokers for help. But thousands have unknowingly signed contracts riddled with undisclosed commissions and inflated rates.