Energy confusion could be costing construction firms money: research

Many are unclear on the difference between kilowatt (kW), which refers to power capacity, and kilowatt-hour (kWh), which measures energy consumption

For many, managing energy bills has become another daily challenge – squeezed between rising costs, shifting regulations, and a steady flow of confusing terms that seem to appear with every government update, like the recent Autumn Statement. 

With fluctuating energy prices and upcoming changes, such as Transmission Network Use of System (TNUoS) charges from April 2026, facilities managers are under constant pressure to track what’s affecting costs and operations.

Plus, navigating a constant stream of updates across various channels like social media, TV, online forums, and online news – no wonder the pressure feels intense.

But new research from business energy supplier Valda Energy suggests it’s not just price rises making things harder.

A lack of understanding around key energy-related terms, what’s known as energy literacy, is now another surprising barrier to better cost management.

According to Ofgem’s 2025 report, one in seven UK businesses doesn’t fully understand what makes up their energy bills.

And among those with lower energy literacy, a group that makes up over half of those surveyed (53%), there is a significantly higher likelihood of struggling with energy payments and contracts.

"Business owners and teams are continually exposed to a barrage of media discussions, from changes to 'TNUoS charges' or 'Net Zero targets', and it’s not always obvious what those mean for day-to-day operations or the bottom line,” says Daljeet Kaur, chief operating officer at Valda Energy.

For facilities managers already stretched thin, unclear energy language can lead to overpaying for power, signing unsuitable contracts, or losing confidence in managing costs across multiple sites.

 In response to these findings, researchers at Valda Energy analysed over 75,000 online, forum, and social conversations to identify the energy-related terms that people most often admit they “don’t understand” or find “confusing”. 

The unit 'kilowatt-hour (kWh)' is officially the most frequently questioned term online, despite being widely used in billing and contracts.

Valda Energy’s 2025 analysis reveals it has been questioned nearly 3,000 times online in the past 12 months, with many unclear on the difference between kilowatt (kW), which refers to power capacity, and kilowatt-hour (kWh), which measures energy consumption.

The analysis also uncovered that hot-topic terms like ‘heat pumps’ and ‘green energy’ ranked closely, appearing 2,756 and 2,612 times, respectively. While many businesses have taken to online forums to question these terms – “I’m trying to make sense of Ofgem’s energy price cap, does it affect businesses?” and “As a business, does anyone have experience with heat pumps?” 

Here are the rankings and actual definitions:

1. Kilowatt-hour (kWh) - The standard unit for measuring electricity consumption, representing the energy used by a 1,000-watt appliance running for one hour.
2. Heat pumps - Electrical devices that extract heat from air, ground, or water sources to provide efficient heating and hot water. While having high upfront costs, heat pumps can significantly reduce carbon emissions and running costs compared to gas boilers.
3. Green Energy - Electricity generated from renewable sources such as wind, solar, hydro, and biomass that produce little to no carbon emissions. 
4. Great British (GB) Energy - A planned publicly owned clean energy company announced by the UK government to accelerate renewable energy development. 
5. Smart Meter - Smart meters are the newer generation of gas and electricity meters that automatically send meter reads on a half-hourly basis. These are known as SMETS (Smart Metering Equipment Technical Specifications). There are several types of smart meters; the latest versions are known as SMETS2.  
6. Net Zero - A state where the volume of greenhouse gases produced is balanced by those that are removed from the atmosphere. The end goal is to negate the build-up of greenhouse gases. Currently, the UK target is to reach Net Zero by 2050.
7. Ofgem - The Office of Gas and Electricity Markets is a government regulator for gas and electricity markets. Ofgem sets the rules energy suppliers must follow, protects consumer rights, and monitors the energy market. 
8. Inflation - The rate at which general price levels increase over time across the economy. In the energy market, this can affect costs through higher wholesale prices, network charges, and supplier operating costs. 
9. Energy price cap - A limit set by Ofgem on the maximum amount suppliers can charge domestic customers per unit of energy. While this is widely discussed online and on TV, it is not linked to what businesses pay for energy.
10. Department for Energy Security and Net Zero (DESNZ)- The UK government department responsible for energy policy, security of supply, and delivering net zero emissions by 2050.