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Farm energy supplies: Efficiency tips, tariffs and costs
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Average farm energy consumption
UK farm electricity consumption ranges widely depending on farm type and size. A small arable farm might use just 25,000 kWh per year, while a medium-sized dairy operation typically uses around 60,000 kWh, and large mixed farms can exceed 150,000 kWh annually.
Understanding where your energy goes is essential to managing farm energy costs effectively. A business energy audit can pinpoint exactly which equipment and operations consume the most energy.
Farm electricity consumption
Milking systems and milk cooling used at dairy farms are one of the most electricity-intensive farming activities. A typical 120-cow dairy farm consumes around 60,000 kWh per year, though this varies depending on herd size, housing type, and the automation level of equipment used.
| Electricity use | Breakdown |
|---|---|
| Milking and milk cooling | 40-50% |
| Ventilation and climate control | 20-25% |
| Lighting | 10-15% |
| Water heating and hot water | 5-10% |
| Other equipment and tools | 5-10% |
Farm gas consumption
Farm gas and LPG use varies more dramatically than electricity. Farms typically consume between 10,000 and 50,000 kWh of gas or LPG annually, with seasonal variation depending on heating requirements. Many farms are not connected to the gas distribution grid, so use LPG or heating oil instead, which typically costs 15-30% more per kWh than mains gas.
| Gas use | Breakdown |
|---|---|
| Space heating (buildings and farmhouse) | 40-50% |
| Water heating | 15-20% |
| Grain drying and crop processing | 15-25% |
| Glasshouse heating (where applicable) | 10-15% |
| Other uses | 5-10% |
Sources: OffGrid Pro, AHDB
Energy needs by farm type
Energy consumption differs significantly between different types of farming. Understanding the nature of your consumption helps you execute the right business energy procurement strategy.
Sources: Generators for Export, Farmlytics
Dairy farming
Dairy farms are electricity-intensive because milking systems run twice daily year-round, and milk cooling operates constantly. Daily consumption typically reaches 200-350 kWh per day. This translates to 60,000 kWh annually for a 120-cow herd. Cold storage and milk cooling cannot be interrupted, making reliable electricity supply non-negotiable.
Arable farming
Arable farms typically use 60-100 kWh per day as a baseline, but experience dramatic seasonal spikes. Grain drying at harvest creates the sharpest demand peak, potentially spiking by 400% during wet harvest conditions. A farm drying grain can consume over 10,000 kWh in a single season. Irrigation adds further summer demand during dry spells.
Poultry and pig farming
Intensive livestock operations can consume well over 100,000 kWh annually because heating and ventilation must run continuously. Temperature control in housing is essential for animal welfare, making these farms energy-hungry year-round with high winter peaks. Even brief power interruptions can cause significant losses.
Horticulture
Glasshouse and protected cropping is the most electricity-intensive farm sector. Over 52% of horticulture businesses use 150 kWh per hectare or more. Heating, lighting, and irrigation for indoor growing create continuous demand, especially through winter when supplementary lighting extends growing seasons and maintains profitability.
Managing seasonal energy demand
Farm energy use follows predictable seasonal patterns rather than remaining flat throughout the year. Business energy suppliers increasingly price farm tariffs around expected seasonal load shapes rather than assuming year-round flat demand.
The following factors introduce significant variations in seasonal energy demand:
Summer irrigation peaks
Arable and horticultural farms see electricity demand spike during dry spells when irrigation pumps run.
Autumn grain drying
Grain drying represents the sharpest energy demand spike on arable farms, often lasting several weeks during harvest.
Winter heating demand
Livestock housing, frost protection, and glasshouse heating drive winter gas and electricity demand sharply upwards.
Improving energy efficiency for farms
Electricity and gas supplies are a major source of operating costs for most UK farms. Improving energy efficiency of the most energy-intensive parts of a farm operation can deliver significant cost reductions.
Here are five practical steps to reduce your farm energy consumption:
Upgrade milking and cooling equipment
Modern milking systems and milk cooling units are significantly more efficient than older equipment. Automatic takeoffs and variable-speed compressors reduce energy waste and improve milk quality at the same time.
Improve ventilation control
Installing demand-controlled ventilation in livestock housing means fans only run when carbon dioxide or ammonia levels rise above preset limits. This maintains animal health and welfare while cutting unnecessary energy use in cooler months.
Install LED lighting
LED lighting uses around 80% less energy than conventional bulbs and lasts much longer, cutting both electricity and maintenance costs. Adding presence sensors or time controls in barns and sheds means lights only run when needed.
Upgrade pumps and motors
Older pumps for water and irrigation can waste 20-40% more energy than modern efficient models. Many farms can recover the cost of new pumps within 2-3 years through reduced electricity consumption.
Service and maintain equipment
Worn bearings, loose belts, and blocked pipework force motors and pumps to work harder and consume more electricity. Regular servicing ensures equipment runs at peak efficiency and prevents costly breakdowns during critical periods.
Agricultural energy relief schemes
Certain farm operations qualify for significant relief from environmental levies. Understanding which schemes apply to your business can substantially reduce your annual business electricity prices and business gas prices.
Climate Change Agreement for intensive agriculture
Intensive poultry, pig, and horticulture farms can enter a Climate Change Agreement (CCA) with the Environment Agency. In return for meeting energy efficiency targets reviewed every two years, you receive 92% relief on the Climate Change Levy for electricity and 89% for gas.
This can be worth tens of thousands of pounds annually for high-energy users. New CCA applications for 2026-2030 are open from January to August 2026. The NFU administers the scheme for agricultural sectors.
Climate Change Levy and small-business exemptions
The Climate Change Levy (CCL) is a UK tax on business energy applied automatically by suppliers. From April 2026, the rate is 0.801p per kWh on both electricity and gas.
However, if your farm uses less than 33 kWh per day of electricity or 145 kWh per day of gas, you fall below the de minimis threshold and are exempt entirely. Check your annual consumption against these thresholds to confirm if exemption applies.
Energy costs for farms
Farm energy bills are based on consumption, efficiency, and the tariff you choose. Below we cover the key factors that impact your farm energy bills.
Finding a competitive tariff
Your current supplier will offer a renewal tariff when your contract expires. Don’t accept it without comparing offers elsewhere. If you miss the renewal deadline, out of contract rates are significantly more expensive. Compare business electricity and compare business gas prices before your renewal date.
Consumption and efficiency improvements
The efficiency improvements outlined above reduce how much energy your farm consumes each year, which directly lowers your kWh usage. Lower consumption automatically reduces your business electricity bills and business gas bills, regardless of the unit rate on your tariff.
Standing charges and regional variation
Fixed daily fees vary significantly by region and are paid regardless of how much energy you use. A cheap unit rate does not always mean a competitive overall contract. Compare business electricity standing charges and business gas standing charges alongside unit rates to see the full cost picture before committing.
Best energy tariffs for farms
The best tariff depends on how your farm uses energy. Farms with daytime-dominated demand often suit different tariff types than those with year-round continuous heating and refrigeration.
Fixed tariffs
Fixed tariffs lock in your energy price for 1-3 years, protecting you against rising wholesale costs. Farms can budget accurately and avoid out of contract rates by renewing well before expiry dates.
Multi-rate tariffs
A multi-rate meter charges different rates for peak and off-peak hours. Farms that can shift energy use, such as running grain drying, irrigation, or workshop equipment during off-peak times, can reduce costs without disrupting normal business operations.
Multi-site contracts
Farms with multiple buildings, outposts, or related enterprises can combine consumption under a single multi-site business energy contract. This often improves your negotiating position with suppliers and simplifies billing and administration.
Half hourly metering
A half hourly meter records consumption in 30-minute intervals rather than one reading per day. This detailed data helps suppliers understand your actual load pattern and often enables them to offer more competitive pricing based on your real usage shape.
Shared and community renewable models
Beyond single-site generation, farms can join shared renewable or community energy models that reduce upfront costs and spread investment risk across multiple partners.
Shared anaerobic digestion networks
Around 500 anaerobic digestion plants currently operate on UK farms, with the NFU aiming for 1,000 by 2030. Rather than each farm building its own digester, groups of neighbouring farms can jointly own a central facility that processes slurry and food waste from all participants, producing biogas for electricity, heat, and upgraded biomethane for gas grid injection using the green gas support scheme.
Community solar and agrivoltaics
Community-owned solar projects spread costs and investment risk across multiple stakeholders. Agrivoltaics, where commercial solar panels are mounted high enough to allow sheep grazing or crop growth underneath, now operate on 15 UK farms at 1-5 MW scale. Farms can stack agrivoltaic income with Sustainable Farming Incentive payments, improving returns on solar investment.
Smart Export and peer-to-peer trading
Surplus renewable generation can export back to the grid under the Smart Export Guarantee, earning revenue from unused power. Emerging peer-to-peer energy trading platforms between neighbouring farms allow communities to share renewable energy directly without grid export, keeping prices within the agricultural community.
Renewable energy options for farms
Going greener does not have to mean paying more. Below are the renewable options typically most suitable for farms in Britain.
Commercial solar panels
Commercial solar panels installed on barns, storage buildings, or suitable outhouses can offset daytime electricity demand from milking, refrigeration, pumping, and workshop equipment. Farms with south or west-facing roofs and low shading often see strong returns on investment.
Commercial solar batteries
A commercial solar batteries system stores surplus solar power generated during daylight and releases it when demand peaks in evening milking or overnight. Battery storage makes solar significantly more valuable by shifting generation to match your farm’s actual pattern of use rather than exporting surplus at low rates.
Green business energy tariffs
Green business energy tariffs source electricity from renewable generators. This is useful for farms looking to offset their carbon footprint without the upfront capital investment in solar or wind infrastructure.
Combined heat and power
Combined heat and power systems generate electricity and capture waste heat simultaneously, making them highly efficient for farms with year-round heating demand from buildings, water, or grain drying. The efficiency gains make the investment worthwhile for larger operations.
Solar power purchase agreements
A solar PPA lets you install solar panels with no upfront capital cost on available land, or large roof top spaces. A third party owns and maintains the system, and you buy the electricity it generates at a fixed rate, usually lower than your grid tariff.