What is a standing charge?

Written by Valda Energy

Energy

20/02/2024

It is something we’ve all probably been charged for, but do we know why we have standing charges and is there a way we don’t have to pay for it? Here is a short guide to answer these questions and more…

A standing charge is a daily fixed amount that you pay for your energy, no matter how much or little you use. Almost all suppliers include a standing charge on their tariffs, whether it's for your home or your business.

What does the charge cover? 

Standing charges are meticulously calculated to cover the costs of:

  • Using and maintaining the energy networks, wires and pipes that carry the gas and electricity across to your premises.
  • Keeping your premises connected to the energy network.
  • Carrying out meter reads.
  • Investments in renewable energy sources.
  • Payments towards government initiatives that help vulnerable households and reduce CO2 emissions.

How standing charge amounts are set varies between suppliers, where you’re based, how you pay and what meter you have. They can also look different between domestic energy and business energy.

How do I find my standing charge?

You can see how much you're paying for your standing charge in your invoice. There will be separate charges for electricity and gas which may vary in amount. You will see that your standing charge is separate from your unit rate. This was decided by Ofgem to prevent vulnerable houses and businesses with high energy usage from having to pay higher sums.

Valda Energy customers can find the standing charge on our energy breakdown pages. Check out our FAQ to see where.

Do I have to pay a standing charge with a smart meter?

Standing charges still apply if you have a traditional meter, a prepayment meter, or a smart meter. However, smart meters often come with the perk of potentially lower standing charges as the meter read admin costs are less than other meter types.

Can I get an energy tariff with zero standing charge?

Yes, there are a few business energy suppliers that offer zero-standing charge energy tariffs with higher unit rates. This may be a good option if you don’t use a lot of energy.

If you’re looking for a standing-charge-free energy contract, get in touch and see if you’re eligible for our zero-standing charge product.

Get a quote
 

What are the benefits of tariffs with no standing charges?

Tariffs without standing charges do have their appeal as you only pay for the energy you use. This can be more cost-effective for premises that aren't in use all year round. However, it's important to remember that the tariffs often come with higher energy unit prices.

To find out the most cost-effective tariff for your needs, make sure to consider your typical monthly energy usage before making the jump.