What is a standing charge?

A standing charge is something we’ve all probably encountered on our energy bills, but do you know what it is and why it’s there? We have prepared a short guide to help you understand how a standing change works and how it affects your business.

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.

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 such as the rollout of smart meters. 

Standing charge amounts can vary based on several factors, including your energy supplier, location, payment method, and the type of meter you have. They can differ between domestic and business energy plans. 

You can see how much you're paying for your standing charge by simply checking your invoice. You’ll notice separate charges for electricity and gas, which may vary in amount. The standing charge will be listed on a separate line from your unit rate. This was decided by Ofgem to ensure that vulnerable households and businesses with high energy usage aren’t burdened with higher costs. 

Valda Energy customers can find their standing charge on the energy breakdown pages of their invoices. Check out this FAQ on how to read your invoice. 

Whether you have a traditional meter, a prepayment meter, or a smart meter, standing charges may still apply. However, amongst the other benefits of smart meters, you may be able to get lower standing charge due to reduced meter reading administrative costs compared to other meter types.  

Tariffs without standing charges do have their appeal. Paying only for the energy you use can be more cost-effective, especially for premises that aren't in use all year-round or have a lower consumption.  

Without the standing charge, your bills will only reflect what you have consumed making them much easier to understand. With this, you can also see exactly how much your consumption is costing you, which can help you and your business take a step towards becoming more energy efficient. 

Yes, our innovative SmartChoice Zero tariff gives you the option to only pay for what you use.

If you’re looking for a standing-charge-free energy contract, get in touch with us today to check if you’re eligible for SmartChoice Zero.