On Saturday 1st of October, the government support for energy bills began for households and businesses. This is good news; however, they did confirm some changes for businesses on default or variable tariffs.
It has now been established that the maximum discount for these tariffs will be 34.5 p/kWh for electricity and 9.1p/kWh for gas. This is lower than the originally proposed 40.5p/kWh and 11.5p/kWh published on 21st September.
What does this mean for my business?
If you are on a fixed tariff (signed after April 1st, 2022) then you will still get the same support that was originally planned, that is 21.1p/kWh for electricity and 7.5p/kWh for gas.
If you are on a variable, deemed or default tariff you will now be receiving less support from the government with your energy bills. The discount will now be the difference between a deemed wholesale rate and a maximum of 34.5p/kWh for electricity and 9.1p/kWh for gas.
This means you will be getting even less discount on wholesale energy prices. Your business will still be more vulnerable to wholesale market developments and high gas and electricity prices.
The original price the government proposed for the discount was not set in stone to begin with. Gas prices have also fallen slightly since the scheme was first introduced. However, electricity prices have risen which will expose many businesses to high prices.
Over the past few months, energy prices have been continuously rising, mostly due to Putin’s weaponization of energy which has led to markets being sky high.
However, with this support businesses in the UK will be protected from price fluctuations in the energy market. The government have also stated that this support will curb inflation by 5% and boost economic growth.
If you want to read further on what the energy price cap really means for your business, then continue reading here.
Our advice for rising business energy bills
The business energy price cap is going to reduce the amount you pay for your energy each month, however, simply accepting support might not be enough to get your business through the winter.
Switch to a Fixed-rate tariff
If you are on a deemed rate tariff or your fixed rate tariff is coming to an end, we would suggest that for your next contract you stick with a fixed rate tariff. This will allow you to get the most out of the government’s energy price cap.
This is because all non-domestic customers on fixed rate tariffs (signed after April 2022) are eligible for full support. If you are on a fixed rate tariff you will not pay over the government’s price cap for the wholesale element of your supply. The cap is set at 21.1p/kWh for electricity and 7.5 p/kWh for gas.
There has been strong encouragement from the government for businesses to get onto fixed rates during the price support period. This has become even more prominent since the changes to the discounted price for variable and deemed contracts were made.
If you want to switch to a fixed-rate contract to ensure you are paying the lowest possible prices over the next six months, then get in touch with us today. You can also request a free quote from us here.
It is understandable now if your business is unsure what to do with its energy bills. With prices rising and now the energy price cap being introduced it could be difficult to decide what to do for the best when it comes to your electricity and gas.
If you are currently one of our customers, get in touch with your account manager, or contact us today. We can ensure you're put on a fixed rate contract which will mean the price you pay throughout the cap will remain the same.
If you are not a current customer but need an energy contract or would like to speak to one of our consultants, then please get in touch today, and ensure the maximum support for your business over the next six months.
Reducing your consumption
Another way to stay on top of your energy bills could be to invest in energy-efficient measures to ensure that you keep your consumption low and that your energy bills benefit when government support comes to an end.
Once the energy price cap is removed prices are going to rise again, however, this doesn’t mean your business should panic this gives a perfect opportunity for you to look at ways to reduce your energy consumption and secure the long-term energy outlook for your business.
Our suite of energy reduction services can help you with this. Over the next six months, our energy reduction and efficiency plans could ensure your business can mitigate potential market increases. By working with your business, we can develop a pathway to ensure your business is in the best possible position going forward.
See our Net zero services here to get started today.
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.