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.
Your energy contract
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.
Check your billing
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.