What is unit rate on an energy bill? Plus the simple kWh cost formula
The unit rate is the price per kilowatt hour of energy used. It matters because it lets you isolate the variable usage part of the bill before you add standing charge or argue about monthly payments.
The simple formula most people actually need
kWh used × unit rate = the variable usage cost before standing charge.
That is the core number people need when they are sense-checking a bill. Then add standing charge × billed days separately.
| Charge | What it means |
|---|---|
| Unit rate | The price per kWh of energy used. |
| Standing charge | The fixed daily charge applied whether you use a lot or a little. |
Best related pages
Common unit-rate mistakes
- Comparing the unit rate alone and ignoring billed days or standing charge.
- Using the wrong rate on a multi-rate or Economy 7 style setup.
- Comparing a headline national number instead of the actual tariff or region context on the bill.
- Treating direct debit as if it were the same thing as the unit rate.
Official and reference sources
Frequently asked questions
Is unit rate the same as standing charge?
No. Unit rate is the price per kWh used. Standing charge is a fixed daily charge.
Can I check a bill with unit rate alone?
Not completely. You still need standing charge, billed days and any multi-rate context.
Why does the unit rate matter in a dispute?
Because it helps you isolate whether the problem is usage cost, fixed charges or something else like reading history.
Two numbers, and every bill is built from them
An energy bill has exactly two moving parts. Once you can find both on your bill, you can check it.
bill = ( units used × unit rate ) + ( days billed × standing charge )
Unit rate
Pence per kilowatt hour. Varies with what you use. Currently 26.11p for electricity and 7.33p for gas on average under the cap. Electricity is roughly three and a half times the price of gas per unit — which is why switching a hot water or heating load from gas to electric changes a bill so dramatically.
Standing charge
Pence per day. You pay it whether you use anything or not, including while you are on holiday. Currently 57.19p a day for electricity and 29.04p for gas on average. That is £314.74 a year, fixed.
Where to find them
Both appear on the bill, usually in the detailed charges section rather than the summary. Look for a table with columns like Units, Rate and Amount. If the bill covers a period in which the cap changed, you will see two rate lines — one for each part of the period — and the days should split correctly between them.
Checking your own bill line by line
Five minutes with the bill and a calculator settles most “this looks wrong” questions, and it gives you something concrete to quote if it turns out it is wrong.
Units used
Closing reading minus opening reading. For gas in m³ the bill converts to kWh for you — use the kWh figure.
Unit cost
Units × unit rate in pence, ÷ 100. Use the rate printed on the bill, not a headline figure.
Standing charge
Days in the billing period × p/day, ÷ 100. Use the billed day count; do not double-count a boundary shared by consecutive periods.
A worked check
| Line | Working | Result |
|---|---|---|
| Opening reading, 1 July | 38,412 | |
| Closing reading, 1 October | 39,048 | |
| Units used | 39,048 − 38,412 | 636 kWh |
| Unit cost | 636 × 26.11p ÷ 100 | £166.06 |
| Days billed | 1 July to 1 October (end excluded) | 92 days |
| Standing charge | 92 × 57.19p ÷ 100 | £52.61 |
| Total before VAT adjustments | £218.67 |
Two things that make your figure differ legitimately. First, VAT: the July–September 2026 domestic rates included 5% VAT; from October 2026 Great Britain electricity is zero-rated while gas remains at 5% and the cap rates quoted by Ofgem already include it, but some bills show rates excluding VAT and add it at the end — check which yours does before concluding it is wrong. Second, a rate change mid-period: if the cap changed during your billing window the bill will show two rate lines, and the days must split correctly between them. That split is worth checking; it is a recurring source of small errors.
If your arithmetic and theirs differ by more than a pound or two, ask for the calculation in writing. Use the bill from meter reading calculator to do this without the mental arithmetic.
What you are actually paying for
The standing charge is not supplier profit. It covers costs that exist whether or not you use any energy, and knowing what is in it is what makes the “why is it so high” question answerable.
- Network costs — maintaining the cables, pipes, substations and pressure reduction stations that reach your property. This is the largest element, and it is why the charge varies by region: it costs more per household to serve a sparse network than a dense one.
- Supplier of last resort costs — when a supplier fails, the cost of transferring its customers and honouring their credit balances is spread across everyone's bills.
- Government and social schemes — the Warm Home Discount and similar obligations.
- Metering and administration — keeping your meter on the system.
Why it hurts low users most
At the GB average of 57.19p a day for electricity and 29.04p for gas, standing charges cost £314.74 a year before a single unit is used. For a household using half the typical energy, that is a much larger share of the bill:
| Household | Units cost | Standing charges | Total | Standing charge share |
|---|---|---|---|---|
| Half typical usage | £773.96 | £314.74 | £1,088.70 | 29% |
| Typical usage | £1,547.92 | £314.74 | £1,862.66 | 17% |
| Double typical usage | £3,095.84 | £314.74 | £3,410.58 | 9% |
That is the whole reason standing charges are politically contested, and it is why a low-usage household that cuts consumption further sees a smaller saving than it expects. It is also why “I was away for two months and still got a bill” has an answer: roughly £52 of standing charges accrued while the property was empty.
What you can and cannot do about it. You cannot negotiate the standing charge down on a capped default tariff. You can check you are on the right payment method (direct debit rates are lower than standard credit), check your region is right, and look at whether a fixed tariff with a different standing charge structure suits your usage. Some suppliers now offer low or zero standing charge tariffs — they recover it through a higher unit rate, so they suit low users and penalise high ones.
Frequently asked questions
What is a unit rate on an energy bill?
The price of one kilowatt hour of energy, in pence. Multiply it by the units you used in the period to get the usage part of your bill. The other part is the standing charge, which is charged per day regardless of usage.
Why is gas so much cheaper per unit than electricity?
At current capped rates gas is 7.33p per kWh and electricity 26.11p — roughly three and a half times more. Electricity carries more network, policy and generation cost per unit. It is why moving a heating or hot water load from gas to electric raises a bill far more than people expect.
Which matters more, the unit rate or the standing charge?
Depends entirely on your usage. At typical consumption, standing charges are about 17% of the bill. At half typical usage they are 29%. A low-usage household should care about the standing charge; a high-usage one should care about the unit rate.