The Energy Bill Relief Scheme has now come to an end. This is, of course, worrying for business owners.
Still, there are steps you can take to prepare your business for operating without this support.
In this guide, we’re going to show you how to do this by reducing energy consumption, switching your energy supplier, and much more.
The Energy Bill Relief Scheme was established by the UK government to help keep business energy bills at a reasonable level during the energy crisis. It ran from October 1, 2022, to March 31, 2023.
Instead of capping energy prices, as is the case with the Energy Price Guarantee for domestic users, it applied discounts to the unit rates charged by energy suppliers. There has not been a government-supported price cap on business energy prices so far. There was also no type of support similar to the Energy Bills Support Scheme offered to businesses.
With wholesale prices soaring at the time, the scheme was designed to partially protect businesses from these increases.
The discount that a business received was based on the type of contract it had and the rates that it was paying. All of the following contract types were eligible for the scheme:
Businesses that were out of contract were also eligible.
The energy market is still very volatile due to several factors. Unfortunately, this means that when the scheme ends your business’s energy bills could increase significantly.
The government is replacing the scheme with a new one called the Energy Bills Discount Scheme. While this is welcome news for businesses, it doesn’t provide the same level of financial support as the previous scheme.
To put this into perspective, the previous scheme lasted for six months and the government provided about £18.5 billion of funding for it. The Energy Bills Discount Scheme is scheduled to last for twelve months but the government has put a cap of £5.5 billion on the funding for it.
This means it’s absolutely vital that your business prepares for the end of the previous scheme. Let’s take a look at some steps you can take to get prepared.
The first thing to consider is whether your business has the right type of contract for its business gas and electricity. If you currently have a variable contract, then consider moving to a fixed-rate contract as soon as possible.
This allows you to fix the amount you pay each month for your energy bills. So, even if energy costs suddenly increase, you’ll keep paying the same amount. Variable contracts are much more unpredictable and you’re exposed to fluctuations in the wholesale price of energy.
If you’re on a deemed contract (out of contract) then you’ll be paying much higher rates than you would if you agreed to a new contract. Small to medium-sized business energy and large-business energy deemed rates are always higher than contracted rates.
If your fixed-rate contract is due to end within six months, then it’s time to start looking for a new business electricity and gas deal. You could decide to lock in your rates and sign a new contract with your current supplier. Or, you can find a new supplier that can offer you better rates than you currently have.
A relatively easy way to prepare your business for the end of the scheme is to make sure your supplier is billing you correctly. If your bills are being estimated then you may well be paying for more energy than you actually use.
To avoid this, take regular meter readings and make sure they’re sent to your supplier. You could also ask your supplier to install a smart meter or a half-hourly meter. These meters keep track of your energy usage and ensure that you’re paying the right amount for your business utilities.
One of the best ways to prepare for the end of the scheme is to reduce your business’s energy consumption and increase its energy efficiency. Regardless of the current energy crisis, doing this is always beneficial for your business. It will save you money and make your business more environmentally friendly.
The changes you make can be both small and large. Any steps you take to make your business more energy efficient will be positive.
So, here are a few tips for reducing the energy consumption of your business:
The government does have certain subsidies and grants in place for small businesses. These are usually designed to help with the installation of renewable energy technologies and with making these businesses more energy efficient.
If you think your small business is paying too much for its energy, then you should compare small business energy deals to make sure you’re getting the best rates available.
One of the best ways to prepare for the end of the scheme is to switch your energy supplier. Before you do this, you need to compare energy suppliers and contracts to get the deal that’s right for your business.
Using a broker or a consultant is a great way to get expert advice on finding the best rates on the market.
The end of the Energy Bill Relief Scheme may be daunting for businesses. Yet, there are many steps you can take to prepare yourself for life without it. Remember, it’s important that you review the type of energy contract your business currently has and change it if necessary. You also need to make sure your supplier is billing you correctly.
Although the new Energy Bill Discount Scheme is now in place, it won’t give you as much support as the previous scheme did. So, follow the steps we’ve laid out in this guide and protect your business as much as possible.
To be eligible for the new scheme, you must have a non-domestic energy supply contract with a licensed energy supplier. Businesses are eligible and so are voluntary sector organisations including charities. Public sector organisations like care homes, hospitals and schools are also eligible.
Yes, the wholesale price of gas has decreased since it peaked in the Summer of 2022. However, it will take some time before these lower prices start to feed through to business energy users.
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