A unit rate is the amount you pay for each unit of energy you use. On UK energy tariffs, it is usually shown as pence per kWh.
If your electricity unit rate is 26p per kWh, then each kWh of electricity you use costs 26p before VAT, standing charges and any other adjustments.
How a unit rate is used
Your usage cost is calculated by multiplying your energy use by the unit rate.
usage cost = kWh used × unit rate
For example, 100kWh at 25p per kWh costs £25 before daily standing charges and any other bill adjustments.
Current UK price-cap unit rate example
Ofgem’s price cap for 1 July to 30 September 2026 sets national average Direct Debit unit-rate examples of 26.11p/kWh for electricity and 7.33p/kWh for gas. Actual rates can vary by region, payment method and tariff.
26.11p/kWh
Average Direct Debit electricity unit rate for the July–September 2026 cap period.
7.33p/kWh
Average Direct Debit gas unit rate for the July–September 2026 cap period.
Unit rate vs standing charge
The unit rate changes with how much energy you use. The standing charge is a fixed daily charge for being connected to the energy network.
| Bill item | What it means | Can using less reduce it? |
|---|---|---|
| Unit rate | Price per kWh used. | Yes. If you use fewer kWh, the usage cost falls. |
| Standing charge | Fixed daily charge. | No. It applies even if little energy is used. |
Why unit rate matters
A higher unit rate makes each kWh more expensive. That means appliance usage, heating choices and tariff comparisons all depend on the unit rate.
- It affects the cost of running appliances.
- It changes the saving from using less electricity or gas.
- It helps compare fixed and variable tariffs.
- It affects solar panel savings because self-used solar replaces imported electricity.
Unit rates on fixed and variable tariffs
On a fixed tariff, the unit rates are usually agreed for the contract period. On a standard variable tariff, the unit rate can change, and default tariff rates are usually affected by the energy price cap.
When comparing tariffs, check both the gas and electricity unit rates, standing charges, exit fees and whether the quote is based on realistic annual usage.
FAQs
What is a unit rate?
A unit rate is the price charged for each unit of energy used, usually shown as pence per kWh.
Is unit rate the same as standing charge?
No. The unit rate depends on usage, while the standing charge is a fixed daily amount.
Why do gas and electricity have different unit rates?
Gas and electricity are different fuels with different wholesale costs, network costs and tariff structures.
Should I compare unit rates when switching tariff?
Yes, but also compare standing charges, contract length, exit fees and whether the quote uses your real annual usage.