Business energy for landlords and property managers

Whose name is the supply in?

Everything else follows from one question: who holds the contract with the energy supplier for each meter? In commercial property, the usual arrangements are:

Where a tenant holds its own contract with the supplier, that contract is between the tenant and the supplier; the landlord is not a party to it. Leases sometimes include clauses about utilities, so the lease is the place to start if there is any doubt. We do not give legal advice, and for a dispute over lease terms you should speak to a property solicitor.

Mixed buildings need extra care. Ofgem notes that homes above a shop or pub can be supplied through a business energy contract, and residents who pay a landlord for energy may not be able to choose or switch supplier themselves.

Empty and void properties

When a tenant leaves, the supply stays connected and the meter keeps recording. If nobody has agreed a contract for that supply, Ofgem explains that the energy is supplied on a deemed contract, and deemed rates are usually higher than negotiated rates. Standing charges also keep accruing every day, whether or not any energy is used.

Voids are where landlords most often lose track of energy. Some practical steps:

1. Take dated meter readings on the day the tenant leaves, with photos showing the serial numbers.
2. Tell the supplier about the change of occupier, with evidence such as the lease surrender, so the outgoing tenant's account is closed correctly.
3. Decide who holds the supply during the void and put a contract in place if the unit will be empty for a while.
4. Keep what is needed running, such as alarms, frost protection or lighting for viewings, and switch off what is not.
5. Check the bills for estimated readings, which can drift a long way on an empty unit.

Low-use supplies on empty units are a good reason to look at the balance of standing charge and unit rate when you get quotes. Our guide to business energy standing charges explains how the two work.

When tenants move in or out

Ofgem's change of tenancy guidance applies to both sides of a letting: the business moving in and the business moving out should each tell the current supplier as soon as they can. As landlord, you are often the person with the paperwork that makes it work.

• Evidence: suppliers may ask for a tenancy or lease agreement. Ofgem lists landlord letters among the further evidence a supplier can request, so a short letter confirming the tenancy start or end date can help.
• Readings: agree readings with the tenant at check-in and check-out, and record them in the schedule of condition or handover notes.
• Timing: Ofgem says suppliers review change of occupier evidence within 10 working days. A tenant that has not arranged a contract will be on deemed rates until it does.
• Information for incoming tenants: give them the supplier names, MPANs, MPRNs and meter locations. It saves everyone time, and our guide to business energy when moving premises is a useful link to send them.

If a tenant changes supplier on its own meter, that is the tenant's switch to make. The change of tenancy process itself is covered on our sister site under switching supplier.

Recharging energy to tenants

Where the landlord holds the supply and tenants pay their share, the method needs to be clear, consistent and set out in the lease or service charge provisions. The common approaches are:

• By sub-meter: each tenant's space has its own sub-meter, read for each period, with communal energy shared on top.
• By floor area: a known cost is split by each tenant's share of the floor space.
• By schedule: a fixed share or charge agreed in advance.

Ofgem's guidance for resellers sets a maximum resale price for gas and electricity, equal to the price the reseller paid including standing charges. It says this rule does not apply to energy resold for use at commercial premises such as shops and offices, but it does apply where, for example, a shop resells energy to a domestic tenant in a flat above. Ofgem's current guidance for residents adds that a landlord cannot profit from energy resold to people living there, cannot charge them for energy the landlord uses itself, and may charge a separate administration fee for services such as meter reading and billing.

Recharges also raise VAT and Climate Change Levy questions, so take advice from your accountant on how they apply to your arrangements. Where part of a building is residential, domestic use can qualify for a lower VAT rate on the energy itself; see reduced rate VAT on business energy.

Fidelity Energy offers a tenant recharge service through its Etainabl platform, which can recharge by sub-meter, by floor area or on a set schedule, share communal energy by floor area, keep void space as the landlord's and show the tenant rate, admin fee and VAT on each line.

Manufacturing tenants and the British Industrial Competitiveness Scheme

If you let space to manufacturers and the electricity comes through your supply, a government scheme may involve you. The British Industrial Competitiveness Scheme (BICS) exempts eligible manufacturing sites in Great Britain from the indirect costs of the Renewables Obligation and Feed-in Tariffs from April 2027, and of the Capacity Market from October 2027. The first application window runs from 1 October to 30 November 2026.

The government's guidance for landlords and other third parties explains that where a manufacturer pays for electricity through a landlord, managing agent or site operator, the exemption is applied to that third party's electricity bill. The tenant applies, but you may be asked to:

• Confirm the details of the supply: the MPAN or MPANs, the supply address, the name of the licensed supplier and that the relevant levies are paid.
• Confirm consumption: the total grid electricity on the meter over a six-month period and, where the tenant cannot show it, the tenant's own use, for example from a recharge invoice.
• Pass on the benefit: the guidance expects the third party to pass the financial benefit of the exemption to the successful applicant. Disputes over pass-through are for the manufacturer and the third party to resolve, not the government.

Clear sub-metering and recharge records make all of this easier. Our page on energy for manufacturers explains the scheme from the tenant's side, and the full guidance is on gov.uk.

Portfolios: many sites, one plan

Landlords and managing agents with several buildings often inherit a patchwork: different suppliers, different tariff types and contract end dates spread across the year. That makes renewals hard to manage and leaves supplies more likely to slip onto out-of-contract or deemed rates unnoticed.

A portfolio approach usually helps:

• One register of every supply: address, fuel, MPAN or MPRN, meter type, supplier, tariff and end date.
• Aligned end dates, so contracts can be reviewed together rather than one at a time.
• The right tariff for each type of supply: a busy multi-let building with a half-hourly meter and capacity charges needs different terms from a small empty shop.
• Bill checking across every meter, so estimated reads and wrong rates are caught early. Fidelity Energy offers bill validation that checks each bill against contract rates, readings and charges.

Business size bands matter too. Ofgem gives extra protections to microbusinesses, and some suppliers decide which contracts and protections apply by consumption as well as company size. Our guide to business energy tariffs explains the bands and the tariff types.

How we can help

We help landlords and property managers get on top of the energy side of a portfolio. We gather the bills, MPANs, MPRNs and meter details for each building, explain what each supply is on and what happens at its end date, and introduce you to Fidelity Energy, an independent energy consultancy and broker that gets quotes from its network of business energy suppliers, arranges contracts and looks after the accounts. Fidelity Energy also offers tenant recharge, bill validation and meter services, so recharging and supply contracts can be looked at together. How we and Fidelity Energy are paid is set out on how we work with Fidelity Energy.

Got empty units, a new letting or a portfolio to organise? Contact us with a list of sites or a recent bill for each. To compare offers or switch supplier on a single supply, see compare business energy on our sister site.