Energy and Water for Schools
Schools and academiesYour school’s energy comes with a timetable most businesses never face: bills by site, contract end dates that don’t line up, and governors or trustees who need to sign off the spend.
And yes, your school or academy trust can use an energy broker to arrange it. We go through why, what the DfE has said in writing and how a trust shows value for money in our article on energy procurement for schools and whether you can use a broker. On this page, we cover everything that sits alongside that decision: the tax on your bills, how we work and are paid, water, and the help you get from us once the contract is in place.
What Your Trust Needs to Show at Renewal
Since October 2026, the Academy Trust Handbook has asked academy trusts renewing their electricity and gas to show that the contract they choose offers value for money, measured against the DfE’s own deals, and follows the procurement rules that apply. The DfE doesn’t expect any trust to leave an existing contract early. The test is a comparison of the whole contract, not a race to the lowest pence per kWh, and that’s the comparison we put in writing for you, so your trust isn’t building the case on its own.
If you run a maintained school, your local authority’s procurement arrangements and your own financial rules shape the decision instead, and we’ll work within them with you.
Does Your School Pay Less Tax on Energy?
Many schools pay less tax on their energy than a business does. If your school has charitable status, you can usually give your supplier a certificate for reduced-rate VAT on fuel and power used for the non-business provision of education, with any business use apportioned. That certificate also takes the Climate Change Levy (CCL), the environmental tax charged per kWh on business energy, off those bills.
The 60% rule in HMRC’s VAT rules for fuel and power decides how much qualifies. If 60% or more of a supply is for qualifying use, the whole supply gets the reduced rate. Below 60%, only the qualifying part does. Each premises needs its own certificate, signed by a responsible officer and giving an exact percentage. School residential accommodation for pupils counts as qualifying too, so if you run boarding houses, they’re covered.
From 1 October 2026 to 30 June 2027, qualifying supplies of electricity in Great Britain are zero-rated for VAT, with the qualifying descriptions unchanged, while gas stays at 5%. Picture a school whose certificate covers its electricity: for those nine months, the VAT line on that bill should show 0%. That’s exactly the kind of line we check when we validate your bills.
How We Work With Schools
As an independent business energy and water broker, we compare prices from suitable suppliers for your sites, present the options that best suit your school and arrange the contract your school chooses. You don’t pay us a separate fee. We’re paid commission by the supplier, which is included in the rates and charges in your supply contract, and we disclose our commission in full, in writing, before a contract is signed, so your business manager, governors or trustees know exactly what we’re paid. There’s more on what a business energy broker does and how we’re paid if your finance committee wants the detail.
Our Letter of Authority (LOA) lets us help you, not make decisions for you. Help with your contracts, bills and supplier queries: yes. Enter into a contract on your behalf: no. Some brokers ask for a “level 2” LOA that lets them sign contracts for you. Ours is a level 1 LOA, so only your school can agree a contract.
As of October 2026, Ofgem doesn’t license energy brokers, so we hold ourselves to high standards of our own. We’re members of an alternative dispute resolution scheme with the Energy Ombudsman. We’re also members of the Energy Consultants Association (ECA), which is a trade association rather than a redress scheme. And we sit on the Ofgem TPI working group and meet them regularly.
Planning Renewals Around Your School Year
We always advise arranging your next contract as early as possible, normally 12 months before your renewal date, and if you ask us to, we’ll plan it around your governors’ or finance committee’s meeting dates so prices reach the right people while they’re still valid. If a contract has already run past its end date onto the kind of rollover or deemed rate we explain in what happens when your energy contract is ending, talk to us and we’ll get your next contract arranged.
Water runs on a different market. In England, about 1.2 million non-household customers, including businesses, charities and public sector organisations, can choose their water retailer, while in Wales only those using more than 50 megalitres a year can switch. As with energy, the move happens when your current water contract has ended or is about to, so we’ll check your end dates and arrange business water for your school at the right time.
How Black Sheep Utilities can help
- Written comparison We compare prices from suitable suppliers for your sites and present the options that best suit your school, ready for your committee.
- The groundwork done for you Where we can, we gather meter details, usage and contract end dates before asking suppliers for prices, so the quotes reflect what your buildings actually use.
- Bill validation We check bills against the agreed rates and recorded consumption, including the VAT and CCL lines, and take up any error with the supplier.
- Billing and meter issues Our dedicated customer service team helps with billing and meter problems during your contract.
- Every site in one place For a trust with several academies, we keep every contract end date on record and can link related companies and billing entities, and our dedicated retentions team handles renewal reminders and timetables.
A recent bill for each site is enough to get started, ideally with a signed LOA. You don’t have to do it alone. Book an appointment with our Energy Team or call us on 01273 914000.
Frequently asked questions
Can schools use an energy broker?
Yes. Schools and academy trusts can use a broker, and the DfE has confirmed it in writing. We go through what that means for your renewal, and how a trust shows equal value for money, in our schools energy procurement article.
How is Black Sheep Utilities paid?
You don’t pay us a separate fee. The supplier pays us commission, which is included in the rates and charges in your supply contract, and we disclose it in full, in writing, before you sign.
Do schools pay VAT on energy?
Schools with charitable status can usually claim the reduced rate on fuel and power used for non-business education by giving their supplier a certificate. From 1 October 2026 to 30 June 2027, qualifying electricity in Great Britain is zero-rated, while gas stays at 5%.
Do schools pay the Climate Change Levy?
Supplies used by a charity for non-business activities are excluded from CCL, and the reduced-rate VAT certificate removes the levy for charitable schools. Business activities, such as hiring out a hall, can still carry it.
Do academy trusts have to leave their current energy contract?
No. The DfE doesn’t expect any trust to exit an existing contract, and the requirement applies when contracts are renewed. Tell us your end date and we’ll plan your renewal for the right time.
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For more information
01273 914000To talk about your energy and water, phone us on the number above, or request a quote and one of our energy experts will call you at a time that suits you.