Why are pub energy bills so high?
Pub energy bills run high because a pub uses energy from before opening until after closing, and some of it never switches off at all. The cellar is cooled around the clock. Fridges and freezers hum through the night. The kitchen, the heating, the lights and the extraction all pile on top during service.
That’s the part you can see. The part you can’t is the contract. Business energy isn’t sold like household energy, and a pub that drifts off a fixed deal, or takes on premises without arranging one, can end up on rates that Ofgem itself describes as usually higher.
So there are two jobs in cutting pub energy bills: using less, and paying a fair price for what’s left. This guide takes them in turn. It doesn’t quote a typical bill, because pubs vary too much for one number to mean anything.
Where pub energy bills come from, room by room
The government backed UK Business Climate Hub tells hospitality firms to focus on electricity and gas for lighting, heating, refrigerating and other equipment. For a pub, that list maps onto the building like this:
- Cellar and bar cooling. Cellar cooling, bottle fridges and ice machines run whether or not anyone is drinking.
- The kitchen. Ovens, fryers, grills, dishwashers and the extraction above them. A food led pub looks more like a restaurant on its bill.
- Heating and hot water. Large rooms, doors that open constantly, and often an old building.
- Lighting. Inside, outside, and the beer garden heaters that tend to get forgotten.
The Carbon Trust’s energy efficiency guide for hospitality, which covers hotels and the hospitality industry including pubs and restaurants, is organised around much the same headings: heating and domestic hot water, ventilation and air conditioning, lighting, building fabric and catering. It dates from March 2018, so use it for the principles and not for prices.
Quick ways to bring pub energy bills down
The Business Climate Hub’s hospitality plan starts with finding out what’s on and when. It suggests getting a smart meter and completing an energy audit that checks “what is being used or left on at different times of day”. In a pub that means walking round at 3am in your head. What’s still running?
From there, the low cost actions are unglamorous, and they’re the first place to look for slack in pub energy bills:
- Refrigeration. Clean and maintain it, avoid overfilling, and set temperatures correctly.
- Timers. Check extraction timers, air conditioning timers and hot water timers.
- Heating. Set thermostats to 21 degrees when you need heating or cooling, keep doors and windows closed, and only use overdoor heaters on extremely cold days.
- Lighting. Switch to LED lighting, which the Hub calls the most energy efficient artificial lighting.
- Draughts. Seal gaps around windows and doors.
The Hub says lighting, heating, cooling and extraction actions “can provide the fastest impact for hospitality SMEs”. It also points to free help, including an energy and carbon reduction tool for hospitality SMEs from Zero Carbon Services, and local growth hubs.
Bigger steps such as solar panels or heat pumps are listed too, with a caveat that matters in this trade: the Hub frames them as being for an owner-operator, where grants are available or as a long term investment. If you lease or run a tied pub, what you can change in the building is a conversation with whoever owns it.
Which contract rules protect a pub?
The rules that sit behind pub energy bills depend on the size of the business, and a pub may well count as a microbusiness. Ofgem’s definitions give two ways to qualify, by headcount and turnover or by how much energy you use.
| Ofgem category | Staff and money test | Or the usage test |
|---|---|---|
| Microbusiness | Fewer than 10 employees, and turnover or balance sheet total of no more than £2 million | Up to 100,000 kWh of electricity a year, or up to 293,000 kWh of gas |
| Small business | 11 to 50 employees, and turnover up to £6.5 million or balance sheet total of no more than £5 million | Up to 200,000 kWh of electricity a year, or up to 500,000 kWh of gas |
Thresholds from Ofgem’s business contract guidance, checked 12 November 2026.
If you’re a microbusiness, Ofgem says your supplier must give clear information about the contract and tell you about renewal prices before it ends. On evergreen contracts, it must limit termination notice periods to 30 days and acknowledge a request to end the contract within 5 working days.
Microbusinesses and small businesses can also get help with contracts from Citizens Advice, and take unresolved supplier complaints to the Energy Ombudsman. Our guide to microbusiness energy rights goes through these in more detail.
What to check before you renew
Ofgem lists what a business should know before agreeing to any contract: the type of contract, the length of the term, any fees, what protections you have, and whether broker fees or commission are included in the price. For pub energy bills, three of those do most of the damage when they’re missed.
What happens when the term ends
Ofgem says some contracts renew automatically at the end of a fixed term if you don’t make a new arrangement or switch, usually for a further 12 months, and “may be on a higher rate”. Put the end date in the diary well ahead, because this is where pub energy bills jump without anything in the pub changing.
Deemed rates when you take on a pub
A new landlord or tenant who moves in without arranging a contract is put on a deemed contract automatically. Ofgem says deemed rates “are usually higher than negotiated contract rates”. Our guides to deemed rates and energy when you move business premises explain how to get off them quickly.
How the broker is paid
Ofgem says brokers charge you for their services, that most are paid a commission by the supplier you choose, and that a broker paid by a supplier must be a member of an approved redress scheme. It also notes there’s no cooling off period after you agree your contract. Ask what the commission is before you sign, not after.
With comparison services, Ofgem’s advice is to check which suppliers are included, whether the whole market is compared, and whether the site receives commission.
Do fixed or variable contracts suit pub energy bills?
It depends on how much uncertainty the business can carry. Ofgem describes a fixed rate contract as fixing the price of unit rates and standing charges for the length of the contract. On a variable rate contract, the price you pay can increase or decrease during the contract period.
Neither is right for every pub. A fixed deal makes costs easier to budget for through a quiet winter. A variable one leaves you exposed if prices rise and better off if they fall. What Ofgem calls flexible contracts are suitable for large businesses that use a lot of energy, so they’re unlikely to be offered to a single site.
Frequently asked questions about pub energy bills
- Is there a price cap on pub energy bills?
- No. Business energy is sold on contracts with their own terms and pricing, which Ofgem says differ from standard home energy contracts. The household price cap doesn’t apply.
- Does a pub count as a microbusiness?
- It can. Ofgem’s test is fewer than 10 employees with turnover or balance sheet total of no more than £2 million, or using up to 100,000 kWh of electricity or 293,000 kWh of gas a year.
- How do deemed rates affect pub energy bills?
- Deemed rates are what you’re charged when you move into premises without arranging a contract. Ofgem says they’re usually higher than negotiated contract rates.
- Can I cancel a business energy contract after signing?
- Ofgem says there’s no cooling off period after you agree to a business energy contract, so check the terms before you commit.
Sources
- Ofgem: Get a business energy contract. Business size definitions, microbusiness protections, contract types, deemed and rollover terms, brokers, comparison services, Citizens Advice and the Energy Ombudsman. The page shows no published or last updated date.
- UK Business Climate Hub: Your hospitality sector sustainability plan. Where hospitality energy goes, the audit, the low cost actions, the owner-operator caveat and the support available. The page shows no visible date.
- Carbon Trust: Energy efficiency guide, hospitality sector. The areas the guide covers for hotels, pubs and restaurants. Published: March 2018.
Checked 12 November 2026.
