Cafe Energy: Electricity Contracts, Espresso Machines and Bills for Coffee Shops

Does a cafe need gas, or just electricity?

Many cafes, particularly small high-street coffee shops, are electricity-only: the coffee machine, water boiler, grills, toasters, fridges and lighting all run on electricity, and heating is electric too. You only need a gas contract if the unit has a gas meter that you actually use, for example for a gas hob, oven or boiler.

Unlike a restaurant with a gas kitchen, a cafe often has one meter and one contract, so the electricity price is the whole story.

• Check whether there is a gas meter. Some units have a gas supply left over from a previous business. If you don't use gas, you may still be paying a standing charge on the meter. Ask the supplier about your options rather than ignoring it, and check your lease before asking for a meter to be removed.
• Look at your annual use in kWh. This is the single most useful number when getting quotes.

How much energy does an espresso machine use, and how can I cut it?

A commercial espresso machine keeps one or more boilers at brewing and steaming temperature for the entire time it is switched on, so it uses electricity all day, not just when you pull a shot. The exact figure depends on the machine, number of groups and boiler size, so check the rating plate and manufacturer's guide for yours.

The elements work hardest when the boilers heat from cold, then keep topping up heat all day as water is drawn off and heat escapes. Ways to run it more efficiently, without hurting the coffee:

1. Switch on at the right time, not first thing. Find out from the manufacturer or your engineer how long your machine actually needs to reach a stable temperature. Switch on that far ahead of opening, rather than the moment you arrive.
2. Use the timer if it has one. Many modern machines have a built-in on/off timer. If yours does, set it to match your opening hours so the machine isn't left heating late into the evening.
3. Use eco or standby mode in quiet spells. Some machines can drop the steam boiler temperature or turn off group heaters during slow periods. Check what yours supports and what your engineer recommends.
4. Keep it descaled and serviced. Scale on heating elements makes them less effective. Regular servicing and a working water filter help the machine heat as designed.
5. Turn it off at close. Unless the manufacturer advises otherwise, a machine left on overnight is heating water nobody will use.

What else uses energy in a cafe?

Beyond the coffee machine, the main loads in a cafe are usually hot water boilers or urns, panini grills and toasters, display chillers, under-counter fridges and the dishwasher, plus lighting and electric heating. Most of them run only in trading hours; the refrigeration runs around the clock.

How do a cafe's opening hours affect its energy contract?

Cafes usually open early and close mid to late afternoon, so almost all their electricity is used during the day. That makes a day/night (two-rate) tariff less likely to help than it would for a business with heavy overnight use, but the only reliable test is to compare quotes against your real usage.

A restaurant's energy peaks in the evening; a cafe's peaks from breakfast to lunch and drops to just the refrigeration after closing.

• Single-rate tariffs often suit cafes. A two-rate tariff charges a cheaper rate at night and usually a higher rate during the day. If you use little at night, the cheaper night rate may not offset the dearer day rate.
• The early start counts as day. The off-peak window on a two-rate meter varies by area and meter. Check the exact times on your bill or with your supplier rather than assuming a 6am start falls in the cheap period.
• Overnight use should be small. If you have a smart meter or half-hourly data, look at what the cafe uses between closing and opening. It should be roughly your fridges and chillers. A higher figure suggests something left on, often the coffee machine, water boiler or heating.
• Seasonal trade. Tell the broker if a seaside or park cafe is much busier in summer, so quotes use a realistic annual figure.

What should I know about the electricity supply in a small cafe unit?

Most high-street cafes have a small single-phase supply on a standard (non-half-hourly) meter, the same type as many small shops. The supply limits how much equipment you can run at once, so check it before adding a bigger coffee machine or extra cooking kit.

Some larger coffee machines and catering equipment need three-phase power, which a small unit may not have. If you are fitting out or upgrading:

• Ask an electrician to check the supply and the fuse rating before you buy, and confirm whether the new kit needs single-phase or three-phase power.
• Upgrades go through the network operator, not your energy supplier. A supply upgrade can take time and cost money, so plan it early in a fit-out.
• Your meter type affects your contract. Small cafes are usually on non-half-hourly meters with a unit rate and standing charge. Larger sites with half-hourly meters can be priced differently and may pay a capacity charge.

What if my landlord supplies the cafe's electricity?

In shopping centres, arcades, stations, offices and other shared buildings, a cafe often gets its electricity through the landlord, either on a sub-meter or as a share of a service charge. In that case you may not be able to switch supplier yourself, so check your lease and how the charge is worked out.

If there is no MPAN in your name and you pay for energy through the landlord or managing agent, these are the points to check:

1. Read the lease. It should say how energy is supplied and charged, and whether you are allowed to arrange your own supply.
2. Find out whether you are sub-metered or apportioned. A sub-meter measures your actual use. An apportionment splits a building's bill by floor area or another formula, which can be unfair to a low-use unit.
3. Ask to see the calculation. Request the meter readings, the unit rate and standing charge the landlord pays, and how your share is calculated, including any admin fee.
4. Read the sub-meter yourself with dated photos, and raise any wrong-looking charges in writing.

What happens to the energy when I take over a cafe?

The supply stays on, but unless you agree a contract you will be on the supplier's deemed contract, usually at a much higher rate. Take meter readings on day one, tell the supplier you have moved in and agree a contract quickly.

1. Read and photograph every meter on the day you take over, with the date visible. This separates your usage from the previous owner's.
2. Find the current supplier. The seller, landlord or agent may know. Otherwise the MPAN (and MPRN for gas) identifies the supply.
3. Tell the supplier that you are the new occupier, with your readings and the date you took over.
4. Get quotes and agree a contract. A broker can usually find quotes within days. Being on a deemed rate normally means you can agree a new contract without an exit fee, but check with the supplier.

If you are buying the business, ask the seller for recent bills. They give you a realistic annual use figure and show whether the cafe is close to the VAT de minimis limit.

When should a cafe renew its energy contract?

Start looking several months before your contract end date. If the contract ends and you haven't agreed a new one, you move onto out-of-contract rates, which are usually much higher than a contract price.

Business energy contracts are fixed-term, often one to three years for a small cafe, though longer terms are available. Each one has an end date and, often, rules about giving notice.

• Find your renewal window. Many suppliers let you agree a new contract months before the old one ends. Check your contract or ask your supplier.
• Give notice if required. Some contracts need written notice to stop them rolling on. Missing it can tie you to a renewal price you didn't choose.
• Match the term to your plans. If your lease ends in 18 months, a five-year contract may leave you paying exit fees or trying to transfer it. Ask whether a contract can pass to the next occupier.

Do cafes pay 5% or 20% VAT on energy, and what protections apply?

Energy VAT is 20% for business use, but 5% if your use is under the de minimis limit of 33 kWh of electricity a day (145 kWh a day for gas). Some very small cafes are close to that line, so check your actual daily figure.

The daily limit is easier to understand as a yearly figure: 33 kWh a day works out at roughly 12,000 kWh of electricity a year, as a rough guide. Look at the annual consumption on your bill and divide by 365 to see where your cafe sits. A small cafe with a modest machine and short hours might be near it; a busy coffee shop with long hours is likely to be well above it. If you think the wrong rate is applied, ask your supplier. If you are VAT-registered, you can usually reclaim VAT on energy, which makes the rate matter less.

Microbusiness protections. Most independent cafes count as a microbusiness for energy: fewer than 10 employees (or full-time equivalents) and annual turnover or balance sheet of no more than €2 million, or use of less than 100,000 kWh of electricity or 293,000 kWh of gas a year. Microbusinesses are protected by a 12-month back-billing limit, which generally stops a supplier billing for energy used more than 12 months before the bill. Ask your supplier if an old, unbilled charge appears.

Complaints. Complain to your supplier first. If it isn't resolved within eight weeks, or you are unhappy with the final response, you can usually take it to the Energy Ombudsman free of charge.

Brokers. For business energy contracts signed since 1 October 2024, suppliers must show any broker fee in the contract's principal terms. Suppliers may only work with brokers who belong to a redress scheme when signing small businesses (fewer than 50 employees). Every broker we pass details to is in an Ofgem-approved complaints scheme. Ask any broker how they are paid before you agree anything.

See also utilities for cafes, restaurant energy for full-kitchen sites, and our business energy guide.

Related guides

Business energy for cafes: frequently asked questions

This guide is general information, not advice. Prices and contract terms vary, so always read a contract before you sign.

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