Business energy for hair and beauty salons
Business energy for hair and beauty salons
Hair and beauty salons use energy for hot water at the basins, hairdryers and styling tools, heating, lighting, towel laundry and treatment equipment. Salons are counted in the retail sector in government survey data, where electricity makes up 79 per cent of energy use, but a gas water heater or boiler can make gas a big bill too. Look for a contract that suits your opening hours and check whether a flat above shares your meter.
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How much energy do hair and beauty salons use?
| Benchmark | Value | Source |
|---|---|---|
| Typical electricity use per m², general street retail and services (CIBSE TM46; there is no separate salon category) | 165 kWh/m²/year | GOV.UK |
Benchmarks describe typical buildings. Your own use depends on floor area, opening hours, equipment and how efficient your building is.
What do hair and beauty salons 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 hair and beauty salons
- Many salons are microbusinesses (for example fewer than 10 employees and turnover or balance sheet of no more than £2 million), which brings extra Ofgem protection, including a 12-month limit on rollover contracts.
- Most salon use falls in daytime and evening opening hours, not overnight, so compare total annual cost on a single rate against multi-rate options using your real meter readings.
- If you rent a chair or room in someone else's salon, the energy contract belongs to whoever holds the account for the premises. Only the account holder can switch or agree a new contract.
- Moving into a new unit? Ofgem says you are responsible for energy used before your new contract starts, and you may be on a deemed contract with variable rates, so take meter readings on day one.
- If you live above the salon on the same supply, tell the supplier. The domestic share can reduce the VAT and Climate Change Levy you pay.
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VAT and Climate Change Levy for hair and beauty salons
Some small salons fall under HMRC's de minimis limits. If you use no more than 33 kWh of electricity a day on average (1,000 kWh a month), or 145 kWh of gas a day (4,397 kWh a month), HMRC Notice 701/19 treats the supply as subject to the reduced rate of VAT rather than 20%, and it is also outside the main rates of Climate Change Levy. A flat above the salon on the same supply is mixed use and may reduce the VAT and CCL due on part or all of the supply.
VAT on business energy · Climate Change Levy explained
How hair and beauty salons use energy
Salons sit in the retail sector in the government's Building Energy Efficiency Survey, where electricity made up 79 per cent of energy use; salons that heat water with gas will also have a significant gas bill.
Every wash uses heated water. HSE says stored hot water must be kept at 60°C or above to control Legionella, so savings come from using less hot water and keeping the heat in, not from turning the heater down. GOV.UK
Dryers, straighteners and tongs draw a lot of power while switched on, and are often left heating between clients.
Clients sit still for long periods, often with wet hair, so salons tend to be kept warm. Doors opening onto the street let heat out.
Bright, colour-accurate lighting at stations and mirrors runs for the whole day.
Washing machines and tumble dryers for towels and gowns can run for several hours a day in a busy salon.
Steamers, wax heaters, heated beds, UV lamps and sunbeds add further electrical load in beauty and nail salons.
The number of clients, how much hot water each service uses and how long dryers and tools stay on between appointments drive most of the bill. Treatment rooms with heated beds, steamers or sunbeds add more electricity per square metre than a hair-only salon of the same size.
Ways hair and beauty salons can cut energy use
Turn off straighteners, tongs and dryers when they are not in use rather than leaving them heating all day.
Spray taps and water-efficient shower heads reduce the volume of hot water used without affecting the service, as long as water pressure is adequate. Trial one basin first. Carbon Trust
Keep hot water at a safe 60°C but stop it losing heat: the Carbon Trust says insulating hot water tanks, pipes and valves usually pays back within a few months. Carbon Trust
The Carbon Trust says reducing heating temperatures by 1°C can cut fuel consumption by 8%. Keep the waiting and treatment areas comfortable, but check the thermostat isn't set higher than it needs to be. Carbon Trust
Occupancy sensors in staff rooms, stockrooms and toilets make sure lights only run when someone is there. The Carbon Trust says sensors can save up to 50% on lighting costs and suit stockrooms and toilets in particular. Carbon Trust
Wash and dry towels in full loads and clean tumble dryer filters regularly so each cycle does as much work as possible.
FAQs
How much electricity does a hair salon use?
It varies with the number of chairs, services and hours. CIBSE TM46 has no separate salon category; its general street retail and services benchmark puts typical electricity use at 165 kWh per square metre a year.
Can I turn my water heater down to save money?
Not below 60°C. HSE says stored hot water should be at least 60°C to control Legionella. Save instead by using less hot water, fitting spray heads and insulating tanks and pipes.
Does my salon have to pay 20% VAT on energy?
Usually, yes. The exception is very low usage: if you use no more than 1,000 kWh of electricity or 4,397 kWh of gas a month, the supply falls under HMRC's de minimis rules and gets the reduced rate.
Is a salon a microbusiness for energy?
It is if it uses less than 100,000 kWh of electricity or 293,000 kWh of gas a year, or has fewer than 10 employees and turnover or balance sheet of no more than £2 million. Microbusinesses get extra Ofgem protections, such as a 12-month limit on rollover contracts.
I rent a chair. Do I need my own energy contract?
Only if a supply is in your name. The contract sits with whoever holds the account for the premises, so check your chair or room rental agreement for how energy costs are shared.
Sources
- HSE, Legionella: things to consider (water temperatures)
- CIBSE TM46:2008 Energy Benchmarks, Table 1 (reproduced by Vale of Glamorgan Council)
- BEIS (now DESNZ), Building Energy Efficiency Survey 2014-15: Overarching Report
- Carbon Trust, Retail energy efficiency guide (CTV053v2, 2018)
- Carbon Trust, Hospitality sector guide (CTV058 v3, 2018)
- HMRC, Fuel and power (VAT Notice 701/19)
- HMRC, Climate Change Levy reliefs and special treatments (Excise Notice CCL1/3)
- Ofgem, Get energy if you are moving home or business premises
- Ofgem, Set up a business energy contract
- Gas and Electricity Regulated Providers (Redress Scheme) (Amendment) Order 2024 (microbusiness criteria)
Other business types
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