Business Energy Prices 2025: Higher or Hidden Costs?

Energy prices have been on a turbulent journey since 2020, when the pandemic sent shockwaves through global supply chains. The 2022 energy crisis, driven by geopolitical conflict, pushed costs to unprecedented heights. While prices have since eased, volatility remains the norm and a return to pre-pandemic rates looks unlikely.

While energy prices may no longer be at their peak, they’re far from predictable and for many UK businesses, the biggest threat isn't just the market. It’s being locked into mis-sold energy contracts that are quietly draining their bottom line.

Rising prices, struggling businesses 

According to Cornwall Insight, a staggering 81% of UK businesses anticipate raising their own prices from April 2025 due to higher energy costs. Ofgem’s latest non-domestic report paints an even bleaker picture: more than one in four UK businesses – mostly micro, small and medium-sized – say they’re struggling to pay their energy bills.

Impact of domestic energy price cap on businesses

Ofgem has increased the domestic energy price cap by 6.4 percent from April to June 2025. While this cap technically applies only to households, the ripple effect indirectly hits businesses too:

• Rising wholesale prices drive up the cost of energy contracts across the board.
  
  
• Economic strain on consumers means tighter wallets, weaker demand, and increased pressure on sectors like retail and hospitality.
  
  
• Home-based businesses will directly feel the hit of rising household energy costs.

Regional disparities adding to the pressure

Not all businesses are affected equally. A BBC report found that SMEs in North Wales and Merseyside will be paying 13% more for energy than those in London come April 2025 – largely due to third-party charges.

These charges, which account for up to 60% of a business energy bill, include network and policy costs and vary significantly by region.

The hidden issue: Mis-sold energy contracts

Faced with rising costs, many businesses have turned to brokers to help them secure cheaper energy contracts. But what’s often overlooked is how many of these brokers have misled businesses – hiding hefty commissions and locking them into overpriced contracts.

Brokers are legally required to disclose any commission they receive. But the reality? Countless businesses have unknowingly signed contracts padded with undisclosed fees and inflated rates.

“Many businesses are paying far more for their energy than they should because of hidden commissions and overinflated prices,” says Victoria Myers, Director at Energy Solicitors Limited. “It’s not just bad practice – it’s financial exploitation, plain and simple.”

And the impact is significant. Businesses could be owed thousands in refunds – but many don’t even realise they’ve been overcharged.

What can businesses do?

With budgets tightening and energy costs climbing, now is the time for businesses to take control:

• Check your energy contracts. If you’ve used an energy broker, check for signs of hidden commissions or inflated rates.
  
  
• Seek expert advice. Companies like Energy Solicitors Limited specialise in identifying mis-sold contracts and recovering lost funds.
  
  
• Explore smarter energy strategies. Dr Craig Lowrey of Cornwall Insight highlighted to BBC: “Now is the time for businesses to review their energy strategies, explore switching opportunities, and consider efficiency measures to help ease rising costs.”
  
  

Rising energy prices are unavoidable – but being taken advantage of isn’t. If your business has ever signed a contract through a broker, especially during the chaos of recent years, it’s worth asking: were you mis-sold?

Because in today’s volatile market, every penny matters.