The Energy Price Guarantee (EPG) is an initiative by the UK government to set a limit on the price of energy. It was made in response to the UK energy crisis and is designed to protect consumers from rising energy costs. The idea is to help energy customers pay less on their gas and electricity bills. So, let’s dive into how it works, its rates, and its impacts on your business.
What Is The Energy Price Guarantee (EPG)?
For the larger part, the EPG has been a seemingly well-received initiative on the part of the UK government. It provides a much-needed cap on gas and electricity prices in what is a truly volatile market, thus giving many much more certainty.
But, if you’re a business owner who’s still unsure of what this means to you, consider getting in touch with energy experts. At Business Energy Comparison, we serve as a trusted resource for everything related to business energy. Besides giving you insight into how the electricity and gas markets operate, we can help you save on your energy bills by comparing contracts from top suppliers.
Frequently Asked Questions
Floor unit prices are the minimum price set by the government under the Energy Price Guarantee. Although floor unit prices vary by region and payment type, they represent the minimum that suppliers can charge under the EPG.
Standing charges are fixed daily costs on your energy bill. These charges cover the cost of maintaining the energy network and are also put towards government energy initiatives. Regardless of your usage, you have to pay standing charges. Although, you may find that some tariffs don’t have standing charges but may have higher electricity or gas unit rates.
Switching to a fixed energy tariff on your business or domestic electricity contract could give you some more clarity about how much you’ll be paying during a contract, which is usually 12 to 24 months. Fixed-rate tariffs can work well if energy prices increase, as your rates will stay at the same price. But, if energy prices drop, you could end up paying more than necessary or more than your competitors on variable tariffs.
Yes, besides the EPG, there are a number of ways that customers can offset the cost of their energy bill:
- Prepayment meters – With a prepayment meter, customers pay for electricity before they use it.
- Winter Fuel Payment – If you were born on or before 5 October 1954, you’re eligible to receive £100 and £300 in tax-free payment to help pay your heating bills.
- Warm Home Discount Scheme – A one-off discount on your energy bill, if you’re eligible.
- Energy Company Obligation (ECO) – A pledge by energy suppliers to improve the energy efficiency of homes and, ultimately, lower energy bills.
These options are largely applicable to households and not businesses. Businesses have the option of the Energy Bills Discount Scheme, which is similar to the Energy Bills Support Scheme and can help a lot with your business utilities.
Fixed-rate tariffs lock in the price you pay per unit of energy, giving customers more certainty over what they’ll pay. With variable-rate tariffs, or standard variable tariffs, the price per unit changes according to the state of the electricity and gas markets. Standard variable tariffs can save you money when there are unit price reductions but they can also be more expensive if prices increase.
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