While headlines focus on households, Ofgem’s latest review could reshape energy costs for UK businesses too.
This week, Ofgem announced a wide-ranging review into how the fixed costs of running the UK’s energy system, including grid maintenance, green investment and network operations are allocated and recovered.
Although much of the media attention has focused on domestic customers and fairness for households, the official scope includes non-domestic (business) users.
At Resolve, we’re tracking this closely. The outcomes could influence how your energy contracts are structured and what you pay in the years ahead.
What exactly is Ofgem reviewing?
The Energy System Cost Allocation and Recovery Review (CAR) is exploring whether the current methods of recovering energy system costs are still fit for purpose. That includes how standing charges, per-unit costs, and capacity-related fees are applied.
Ofgem is assessing:
- Whether the balance between fixed and variable charges is fair
- How to ensure cost allocation supports net zero goals
- Whether non-domestic customers are contributing proportionately
What this means for businesses
Even if your business hasn't been impacted by domestic pricing debates, this review could signal big structural changes in the way you’re billed for energy.
1. New cost structures on the table
Standing charges, network costs, and capacity-related fees may be rebalanced, potentially moving more cost recovery toward high-usage or high-capacity sites.
2. Push for “fairness” may reshape business billing
As part of its economic and net-zero duty, Ofgem is assessing whether large commercial users should carry a greater share of fixed costs — especially if they have higher demand or less flexibility.
3. Flexibility and efficiency could be rewarded
If pricing evolves to incentivise grid-friendly behaviour, businesses using demand-side response, smart controls, or energy storage may benefit from lower rates or new tariffs.
4. Contract strategies will need to adapt
As new pricing models are explored, businesses may need to rethink how they approach energy contracts - building in greater flexibility, considering different usage profiles, and staying responsive to regulatory shifts.
Key takeaways
- This review isn’t just academic - it will shape how future costs are recovered from your business energy bill.
- There’s no immediate change, but policy shifts could be introduced from 2026 onwards.
- Contract timing, demand profile, and flexibility will become even more important in energy strategy.
What to do now
If your business is entering into a new contract, expanding operations, or reviewing energy efficiency investments, now is the time to:
- Understand your current standing charge and capacity profile
- Assess how flexible your energy use is
- Build risk-mitigation into your contract planning
This review is a clear sign that energy cost recovery is evolving.
Resolve helps clients navigate not just the market - but the regulatory horizon. Discover how our clients are already benefiting from smarter energy decisions.
Need guidance?
Our team of energy experts can help you prepare for what's ahead, ensuring you stay cost-efficient and compliant, no matter how the landscape shifts.
View the full announcement on Ofgems website
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.
