SECR Low Energy User: The 40 MWh De Minimis Rule Explained
Written by Calvin Lo, Founder of Aphelios Software | August 2026 | 6 min read
Even if your organisation qualifies for SECR on the Companies Act 2006 s.465 size test - 250+ employees, or £36m+ turnover, or £18m+ gross assets - there is one more escape hatch: the de minimis threshold. Organisations consuming less than 40,000 kWh (40 MWh) of energy in the reporting year are low energy users and exempt from the main SECR disclosure obligations.
How the 40 MWh Test Works
The exemption applies when your total energy use is below 40,000 kWh in the reporting year. In practice, that is a small amount: a single office with heating and IT almost always exceeds it, which is why the exemption mostly helps very small or service-only operations - though it can also catch businesses with unusually low energy footprints.
Crucially, to claim the exemption you still record your energy data. An exempt organisation must still disclose its total energy consumption in kWh (and confirm the methodology used) so that the exemption can be verified. You cannot simply say "we’re small" - the number has to be in the report.
What Counts Towards the 40 MWh Total?
- Electricity purchased for the organisation
- Natural gas and other fuels burned on site
- Transport fuel for the reporting year (SECR requires energy used for transport to be included)
- Landlord-supplied energy where it is within the reporting boundary
- Energy from shared heating schemes and similar arrangements
Because the SECR boundary is defined as "the same as your Companies Act qualifying period boundary", you include the energy of the whole organisation - even branches with separate energy bills - when testing the threshold.
What an Exempt Company Still Has to Publish
Falling below the threshold does not mean silence. Per the SECR guidelines, an exempt company’s directors’ report should still state that it is exempt from SECR because its total energy use was below 40 MWh, and disclose the total energy consumption in kWh. Some companies also add the standard energy-efficiency note voluntarily.
The Boundary Case: Transport Energy
A common oversight is forgetting transport fuel. If your organisation operates a small vehicle fleet, transport energy must be added into the 40 MWh total - and if that pushes you over the line, you are not a low energy user. Companies frequently discover this only when the year is over and the numbers are being assembled, which is exactly why recording energy in kWh as you go beats reconstructing it in January.
In Aphelios emissions, total energy in kWh is tracked alongside every activity across the whole organisation, so the de minimis test can be checked at any moment - not just in the final report. The full eligibility checklist walks through the Companies Act size test and this threshold together.
Low Energy User FAQ
What is the 40 MWh de minimis threshold in SECR?
Organisations that consume less than 40,000 kWh (40 MWh) of energy in the reporting year are 'low energy users' and exempt from most SECR disclosure obligations. Total energy in kWh is still reported to demonstrate eligibility for the exemption.
How do I prove I am a low energy user?
Record total gas, electricity and other energy consumed in kWh across the reporting year, including landlord-supplied energy and shared heating. If the total is below 40,000 kWh, the exemption applies.
This guide is a planning aide, not legal advice. Confirm your reporting approach with your accountant before filing.
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