Business Energy Glossary
What is kVA?
kVA is one of those bill items most business owners only meet when they wish they had not. For smaller supplies it stays invisible — bundled into the standing charge, never mentioned. The moment your site crosses about 70 kVA of demand and moves to a half-hourly meter, it becomes a recurring monthly charge that is set, fixed, and quietly expensive when it goes wrong. The letters stand for kilovolt-amperes: the unit of apparent power in an AC electricity supply. It measures the total load on the network — not just the useful work you do with it. That gap between “total load” and “useful work” is where the maths gets fiddly and the bill catches people out.
kVA mostly matters for larger business electricity connections, where it’s agreed up front when the supply is installed. Usually as part of the wider meter installation process.
On UK business electricity bills, kVA appears as agreed supply capacity — the maximum apparent power the network has reserved for your site. You pay a monthly capacity charge for that reservation whether you use it or not, plus an excess charge if you go over it. This entry covers what kVA actually measures, how it relates to kW, where it appears on your bill, and the most common mistakes businesses make. If you want a more practical walkthrough, the deeper Clearsight kVA guide works through real worked examples.
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What kVA actually measures
kVA measures apparent power — the total electrical load placed on the network at any moment. It is what the cables, transformers and substations actually have to carry, regardless of how usefully you turn that power into work at your end.
Power has three flavours and they trip people up constantly:
- Real power (kW). The bit doing useful work — running motors, lighting, heating elements, IT loads.
- Reactive power (kVAr). Power that sloshes back and forth between the supply and inductive loads (motors, transformers, fluorescent ballasts) without doing useful work. It still has to travel down the wires.
- Apparent power (kVA). The vector sum of real and reactive — what the network has to deliver.
If you only ran perfectly resistive loads — heaters and incandescent bulbs — kVA and kW would be identical. The moment you add motors, compressors, chillers, drives or large fluorescent installations, kW and kVA diverge.
kVA vs kW: the power factor
The bridge between kW and kVA is the power factor, a number between 0 and 1:
kW = kVA × power factor
A power factor of 1 means everything you draw becomes useful work — kW equals kVA. A power factor of 0.8 (typical for a mixed commercial site) means a 100 kVA load only delivers 80 kW of useful work; the other 20 kVA is reactive, doing nothing for your operation but still occupying network capacity.
This matters because the network bills you on kVA, not kW. A site with a poor power factor pays for capacity it cannot fully turn into useful work. Power factor correction equipment (typically capacitor banks) can bring the figure closer to 1 and shrink your kVA demand without changing your kW output.
Where kVA appears on your bill
On a typical UK half-hourly business electricity bill you will see kVA in three places:
- Agreed supply capacity (ASC). A monthly fixed charge for the maximum kVA the DNO has reserved for you. Expressed in p/kVA/day or £/kVA/month.
- Excess capacity. A penalty charge if your measured maximum demand exceeds the ASC during any half-hour. Usually billed at a multiple of the standard capacity rate.
- Maximum demand (MD). The highest kVA recorded across the billing period, shown for information and as the trigger for any excess charge.
Smaller business sites on non-half-hourly meters do not see kVA breakdowns — capacity is bundled into the standing charge. If your annual consumption pushes you above the half-hourly threshold (currently around 100,000 kWh per year), kVA will start appearing.
Agreed supply capacity
Your ASC is set when the site is connected, based on the maximum simultaneous load the property is designed to draw. You can request a change up or down by contacting the DNO. Two practical points worth knowing:
- Increases. May require physical network reinforcement and a capacity contribution. Lead times of 3 to 12 months are common for material increases.
- Decreases. Usually administrative and can be processed in a few weeks. Done well, a decrease saves capacity charges without affecting day-to-day operations.
The optimum ASC is the lowest level that comfortably accommodates your real maximum demand, with a sensible headroom (typically 10 to 15 per cent). Going lower triggers excess charges; sitting too high wastes money on reserved capacity you never use.
Worked example
Take a mid-size manufacturing site with:
- Agreed supply capacity: 250 kVA.
- Capacity charge: £1.20 per kVA per month.
- Excess charge: £3.60 per kVA per month (3× the standard rate).
- Measured maximum demand in May: 230 kVA. Within ASC, no excess.
- Measured maximum demand in June: 270 kVA. Twenty kVA over the agreed limit.
May bill — capacity element only:
250 × £1.20 = £300.00
June bill — capacity plus excess:
(250 × £1.20) + (20 × £3.60) = £300.00 + £72.00 = £372.00
That £72 excess could come from one half-hour, late on one day, when an extra compressor happened to start while everything else was already running. Half-hour granularity makes the system unforgiving.
Sizing your kVA correctly
A sensible kVA sizing review looks at twelve to twenty-four months of half-hourly data:
- Peak demand profile. When does the highest kVA actually hit? Is it operational (process load) or coincidental (start-up surge)?
- Headroom analysis. How close to ASC does demand sit on a typical month? On a peak month?
- Equipment plans. Any new motors, chillers, EV chargers, or solar planned that change the load shape?
- Power factor. Is the site fitted with power factor correction? If not, what would installation drop the kVA figure to?
A well-run review often finds 10 to 30 per cent of reserved kVA is unused, especially on sites where the equipment has been replaced or consolidated since the original connection was sized.
Common pitfalls
- Confusing kVA and kW. The maths is not the same, and the bill is on kVA. A site running at 200 kW with power factor 0.8 has a kVA demand of 250 — and pays capacity charges accordingly.
- Ignoring excess charges. A single half-hour above ASC can produce months of penalty billing depending on supplier rules.
- Over-sizing “just in case”. Headroom is sensible; padding 50 per cent because nobody knows the right number is expensive.
- Under-sizing after equipment changes. Solar PV reduces imported kW but not necessarily kVA if power factor is poor. Heat pumps and EV chargers can increase peak kVA materially.
- Forgetting the DNO. Capacity changes go through the network operator, not just the supplier. The supplier will tell you what is technically possible; the DNO authorises it.
How to check your kVA position
To get a clear view:
- Pull twelve months of half-hourly data from the supplier portal (most provide HH data downloads).
- Identify the highest half-hour MD value across the period. That is the closest you got to needing more.
- Compare to ASC. If MD never came within 10 per cent of ASC, capacity is probably oversized.
- Check whether any periods showed excess charges. Those are the cost of running too close to (or above) ASC.
- If capacity is over- or under-sized, raise a capacity change with the DNO via your supplier or directly.
For a deeper walkthrough with worked numbers and capacity planning advice for larger sites, see the Clearsight kVA guide. For related concepts on the unit of energy itself, see what a kWh is; for the meter identifier you will need when raising any capacity change, see what an MPAN is.
kVA FAQs
What is kVA?
kVA (kilovolt-amperes) is the unit of apparent power in an AC electricity supply — what the network has to deliver to your site regardless of how much of it does useful work. UK business electricity above around 70 kVA is charged on a kVA basis.
What is the difference between kVA and kW?
kW is real power doing useful work. kVA is apparent power, including the reactive portion that sloshes back and forth in motors and transformers. The two are linked by power factor: kW = kVA × power factor. The bill is on kVA, not kW.
Why does my bill have a kVA charge?
On half-hourly metered business supplies (above around 100,000 kWh per year), the network reserves a fixed maximum apparent power for your site — the agreed supply capacity (ASC). You pay a monthly charge for that reservation whether you use it or not.
What is agreed supply capacity (ASC)?
The maximum kVA the Distribution Network Operator has reserved for your site, set at connection and changeable on request. It is the basis for the monthly capacity charge and the threshold for excess charges.
What is power factor?
A number between 0 and 1 representing how much of the apparent power you draw becomes useful work. Resistive sites approach 1; sites with lots of motors typically sit around 0.7 to 0.9. Power factor correction equipment improves the figure.
How is kVA calculated?
For a three-phase supply: kVA = √3 × voltage × current. For a single-phase supply: kVA = voltage × current. In practice, the meter records kVA directly and you read it off the bill or the supplier portal.
Can I reduce my kVA bill?
Three main routes: right-size the agreed supply capacity to match real demand, fit power factor correction to bring kVA closer to kW, and stagger equipment start-ups to avoid coincident peaks.
What happens if I exceed my agreed supply capacity?
You pay an excess capacity charge — typically two to three times the standard capacity rate, applied to the kVA above the agreed limit. The charge can be triggered by a single half-hour and may persist on the bill until the next reset.
How do I increase or decrease my kVA?
Contact the Distribution Network Operator (often through your supplier). Decreases are usually administrative and quick. Increases may require physical network reinforcement and a capacity contribution, with lead times of 3 to 12 months for material changes.
Why is my kVA higher than my kW?
Because of reactive power drawn by inductive loads (motors, compressors, transformers, fluorescent ballasts). The ratio between the two is the power factor. A lower power factor means a wider gap between kW and kVA.
Do small businesses pay kVA charges?
Not directly. Below the half-hourly threshold (around 100,000 kWh per year), capacity costs are bundled into the standing charge. Above the threshold, kVA appears explicitly on the bill as a separate line.
How do I find my kVA on the bill?
Look for “agreed supply capacity”, “ASC”, “available capacity” or “maximum import capacity”. The figure will be in kVA, with a monthly capacity charge alongside. The half-hourly recorded maximum demand will also be shown for the billing period.