Business energy for farms and agriculture

How much energy do farms and agriculture use?

Benchmarks describe typical buildings. Your own use depends on floor area, opening hours, equipment and how efficient your building is.

What do farms and agriculture pay per kWh?

There are no official prices by business type, but the government publishes what businesses pay by size of energy use. In Q2 2026, the smallest UK business electricity users (up to 20,000 kWh a year) paid an average of 38.36p per kWh, and those using 20,000 to 499,999 kWh paid 28.59p. The smallest gas users paid 9.31p per kWh. These government averages include standing charges and the Climate Change Levy, but not VAT. Your bill shows a unit rate plus a daily standing charge, so it won't match these all-in figures directly. See business electricity prices and business gas prices for every size band.

Choosing an energy contract for farms and agriculture

• Match your tariff to milking times. AHDB says morning milking often falls in the night-rate period, which can run as late as 8:30am in summer, and that water heating and ice building can be switched into it. AHDB adds that tariff changes cost nothing and can save over 15% in some cases.
• If you have several supplies for the house, dairy, sheds or pumps, check exactly what each meter serves before comparing prices, so domestic and business use are billed correctly.
• Tell suppliers about seasonal loads such as grain drying when you get quotes, so the price reflects your real pattern of use.
• Solar on large sheds, wind or anaerobic digestion change how much electricity you buy. Factor any planned generation into the length of contract you choose.
• A farm with fewer than 10 employees and turnover or balance sheet of no more than £2 million is a microbusiness whatever its usage, so Ofgem's microbusiness protections apply, including a 12-month limit on rollover contracts.

Compare prices for your business

VAT and Climate Change Levy for farms and agriculture

HMRC's fuel and power notice has no special relief for farming, but the farmhouse counts as domestic use. If the house and farm buildings share a supply, it is mixed use: if 60% or more is domestic, the whole supply gets reduced-rate VAT and is excluded from the main rates of Climate Change Levy; below that, only the domestic share is, and you'll need to give the supplier a certificate with the exact percentage. Intensive pig and poultry farming is among the activities that can join a Climate Change Agreement, which gives 92% off CCL on electricity and 89% on gas.

VAT on business energy · Climate Change Levy explained

How farms and agriculture use energy

Dairy energy is mostly electricity, with water heating and ice building often timed onto night rates (AHDB); heated livestock, drying and glasshouse operations may also use gas, LPG or oil for heat.

The type of enterprise, herd or flock size and the season drive usage. Dairy use follows milking times every day of the year, livestock heating peaks in winter, and crop drying creates a short, heavy peak at harvest. Weather and building condition also matter, as draughts raise both heating and feed costs for housed animals.

Ways farms and agriculture can cut energy use

FAQs