Business energy for pubs and bars
Business energy for pubs and bars
Pubs and bars spend energy on cellar cooling, drinks chillers, lighting, heating and, where food is served, the kitchen. The Carbon Trust says cooling drinks can be more than a tenth of a typical pub's energy cost, so cellar settings and equipment layout are worth getting right. Look for a contract that suits long evening hours and, if you live on site, check how the flat is supplied.
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How much energy do pubs and bars use?
| Benchmark | Value | Source |
|---|---|---|
| Typical electricity use per m² (CIBSE TM46 bar, pub or licensed club benchmark) | 130 kWh/m²/year | GOV.UK |
| Typical heating fuel use per m², usually gas (CIBSE TM46 bar, pub or licensed club benchmark) | 350 kWh/m²/year | GOV.UK |
| Median total energy use per m², all hospitality premises (BEES 2014-15) | 387 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 pubs and bars 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 pubs and bars
- If you live above the pub on the same supply, tell the supplier. The domestic share can reduce the VAT and Climate Change Levy you pay, but you will need to sign a certificate giving the exact percentage.
- BEES found hospitality energy is mostly used in rented premises. Check your lease or tenancy agreement to confirm who is responsible for the energy contract before you sign a new one.
- Cellar cooling runs overnight, but most of a pub's use falls in trading hours. Compare the total annual cost of single-rate and day/night options on your real meter readings rather than headline rates.
- New licensee or new owner? Ofgem says you are responsible for energy used before your contract starts and could be on a deemed contract with variable rates, so read the meters on day one and agree a contract quickly.
- Beer gardens and events push summer usage up, and heating does the same in winter. A fixed price smooths the risk, but make sure the contract length fits your plans for the business.
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VAT and Climate Change Levy for pubs and bars
A pub with living accommodation on the same supply is mixed use. Under HMRC Notice 701/19, if 60% or more of the supply is for domestic use the whole supply gets the reduced VAT rate; below 60%, only the domestic share does and the rest is charged at 20%. The same 60% test applies to Climate Change Levy under Excise Notice CCL1/3. Letting rooms don't count as domestic: HMRC excludes hotels, inns and similar establishments.
VAT on business energy · Climate Change Levy explained
How pubs and bars use energy
Most pubs use gas for heating and hot water and electricity for cooling, lighting and the bar; the CIBSE TM46 pub benchmarks are 130 kWh/m² of electricity against 350 kWh/m² of heating fuel a year.
Cellar coolers, line coolers, bottle fridges and ice makers. Heat-producing kit sited inside the cellar makes the cooler work harder. Carbon Trust
Bars, lounges and function rooms are heated through long opening hours, often in older buildings. The CIBSE TM46 benchmark for pubs assumes almost three times as much heating fuel as electricity per square metre. GOV.UK
If you serve food, cooking, dishwashing and extraction add a big load. Catering was the largest single use of electricity across hospitality premises in the government's Building Energy Efficiency Survey. GOV.UK
Bar and mood lighting is on for most of the trading day. Many pubs still use tungsten or halogen bulbs, and LED versions are available that keep the same look. Carbon Trust
Glass washers, toilets, cleaning and any letting rooms or living accommodation all need hot water.
Whether you serve food, how long you open and how your cellar is run make the biggest difference. A wet-led pub uses far less than one with a busy kitchen, and a cellar kept colder than it needs to be, or sharing space with heat-producing equipment, quietly adds to every bill.
Ways pubs and bars can cut energy use
The Carbon Trust says the recommended cellar temperature is usually 11 to 13°C and that overcooling by 1°C can add up to 10% to cellar energy costs. Check the reading with a separate thermometer. Carbon Trust
Line coolers, ice makers and cooling cabinets give off heat. Where you can, site them in a well-ventilated service area outside the cellar. Carbon Trust
Draught-strip and insulate cellar doors and hatches, fit self-closing doors that shut straight after deliveries, and insulate any heating pipes that pass through. Carbon Trust
LEDs use less power in the bar and, in the cellar, add less heat for the cooler to remove. The Carbon Trust says tungsten bulbs in cellars should be replaced straight away. Carbon Trust
Thermostatic radiator valves cut heat output as a busy pub warms up with people, and a seven-day time switch lets heating follow each day's opening hours. Carbon Trust
Put function rooms on separate heating controls from the main bar so you only heat them when they are booked. Carbon Trust
FAQs
What temperature should a pub cellar be?
The Carbon Trust gives the recommended cellar temperature as usually 11 to 13°C. Overcooling by just 1°C can add up to 10% to your cellar energy costs, so check the setting against a separate thermometer.
How much energy does a pub use?
The CIBSE TM46 benchmark for a bar, pub or licensed club is 130 kWh of electricity and 350 kWh of heating fuel per square metre a year. A pub with a busy kitchen will usually sit above a wet-led one.
Can I pay less VAT because I live above the pub?
Possibly on part of the bill. Energy used in your home is domestic use, so if it shares a supply with the pub you can give your supplier a certificate showing the domestic percentage. If that share is 60% or more, the whole supply gets the reduced rate.
Do letting rooms count as domestic use for VAT?
No. HMRC Notice 701/19 lists hotels, inns and similar establishments as exclusions, so energy used for guest rooms is charged at the standard 20% rate.
Is there a price cap on pub energy?
No. The Ofgem price cap only covers domestic customers. Your rates depend on the contract you agree, so keep an eye on the end date.
Sources
- Carbon Trust, Hospitality: saving energy without compromising comfort (CTV058 v3, 2018)
- CIBSE TM46:2008 Energy Benchmarks, Table 1 (reproduced by Vale of Glamorgan Council)
- BEIS (now DESNZ), Building Energy Efficiency Survey 2014-15: Overarching Report
- 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
Other business types
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