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Does The Energy Price Cap Apply To Businesses?

In this comprehensive guide, we’ll discuss the Energy Price Cap and the Energy Bill Relief Scheme. It should help you to understand more about the consequences for your company. Our business energy comparison experts will also answer some of your most frequently asked questions and provide some top tips to help you keep costs down.

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Does The Energy Price Cap Apply To Businesses?

It seems like not a day goes by where the news of energy price hikes isn’t dominating the headlines. The UK government has recently suggested that some UK businesses now suffer an astronomical 500% increase in their energy bills.

This is having devastating effects on many businesses, both large and small. Also, understandably, it is causing a lot of anxiety among business owners.

Is your business one of the many struggling to make ends meet because of ever-increasing energy bills? Luckily, Business Energy Comparison is here to help!

The Energy Price Cap Explained

In February 2022, Ofgem announced that from 1 April 2022, the price cap would be changing. In fact, the energy price cap would rise steeply by an unprecedented 54%. This energy price cap is the maximum price that energy suppliers can charge consumers for each kilowatt hour (kWh) of energy they use.

This energy price cap was first implemented in 2019. It was designed to provide a buffer for domestic energy customers from aggressive increases in their energy bills.

Until recently, the cap would be reviewed every six months and adjusted accordingly to reflect the wholesale market. This has now been revised to every three months.

While the energy price cap has been adequate for domestic users, what about non-domestic energy customers?

When it comes to business energy customers, there has never been this safety net price cap. In fact, businesses have routinely been left exposed and vulnerable to a volatile market and uncertainty over energy prices.

Therefore, somewhat inevitably, many businesses are left fearing the worst. However, there is help and support available in the form of the Energy Bill Relief Scheme.

It was announced in September 2022 that businesses would be eligible for this relief scheme by the following month. In short, the scheme provides six months of financial support for business energy bills (both gas and electric).

It should be noted, however, that the Relief Scheme is not a price cap.

Below we’ll discuss this critical lifeline and how your business could benefit.

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The Relief Scheme is a discount set out, especially for business owners. It works differently than a price cap. Instead of capping energy rates, the UK government limits the wholesale price that suppliers pay to energy generators.

The savings made by the energy suppliers pass down to consumers by cutting the unit rate on all energy contracts established after 1 December 2022. As well as this, energy prices will also be lower for those businesses on either deemed or out-of-contract rates.

Suppliers’ savings will then pass down to business customers by cutting a part of the unit rate on all contracts signed after 1 December 2021. There will also be a discount for any businesses on deemed or out-of-contract rates.

If you are signed up for a fixed-rate contract with your energy supplier, there will be a discount on the baseline price and the rate you are signed on

The Relief Scheme will omit any green levies that have been imposed. However, it’s important to note that the VAT rate will remain the same on both your gas and electricity bills.

If you signed up with your energy supplier before 1 December 2022, count yourself as one of the lucky ones. You won’t be exposed to the increase in wholesale prices. This means your business won’t be eligible for any discount.

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Which Businesses Are Eligible For The Energy Bill Relief Scheme?

The Relief Scheme is open to anyone who is not a direct domestic customer. This means that businesses, third-sector organisations, and public-sector organisations are all eligible. This can include schools, care homes, and even charities.

The requirements for the scheme are that you must be:

• On fixed price contracts signed as of 1 December 2021

• Signing a new energy contract

• On either a deemed, out-of-contract or variable energy contract, or

• On flexible purchase contracts

Business Examples


A large, busy hairdressing salon uses 4 MWh of electricity and 16 MWh of gas on average each month. Having signed a new contract in September 2022, its monthly energy costs are almost £7,000. With the scheme, however, the business will see a discount of almost 40%, meaning it will pay around £3,900.


Under the scheme, a small newsagent located in the UK with an energy bill of approximately £1,300 monthly sees its energy costs decrease to around £800. This is based on 1 MWh of electricity and 2 MWh of gas.

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How To Save Money On Your Business Energy Bills

The Relief Scheme has proven to be an invaluable lifeline for so many businesses to date. There’s no denying that, even with the scheme in place, businesses are still paying out more than ever on energy bills.

How much energy you use will ultimately dictate the energy price your business will need to pay. Although switching suppliers is by far the best way to lower your bills, there are other ways to minimise the energy prices you pay to your supplier.

Let’s take a look at just some of them.

Shut down equipment when not in use

When you aren’t using equipment, it should always be turned off. We all know this, yet many of us are guilty of not seeing this idea through. While one of two computers or printers left on overnight probably won’t break the bank, if you do this regularly with lots of equipment, it soon adds up.

Take advantage of natural light

Non-domestic energy users have the highest energy consumption. Most of the costs revolve around lighting. If it’s possible and safe to do so, consider relying more on natural light.

Give your employees incentives to cut their energy usage

How much energy your company uses is also essentially down to your employees and how much they use. Speak to your employees and get them actively involved in conjuring up some energy-saving ideas. With their input, you could do a lot to limit how much energy your business uses overall.

Offer some small incentives to those who suggest the best ideas. This is a great way to get people thinking and proactively taking on the responsibility of helping to cut business costs.

Update your equipment

Consider how energy efficient your equipment is. If you have faulty or older equipment, you will likely lose a sizable portion of money in running these. Upgrading to equipment with a good energy rating can help to keep the energy price you pay down.

Invest in timers and thermostats

Preset your timers and thermostats. After business hours, there’s no need to keep an empty building heated or air-conditioned.

Use a smart meter

With a smart meter, you can easily reduce your business energy consumption over peak times of the day. If you haven’t already got one, many suppliers will offer one to you if you make the switch to them.


Roofs, cavity walls, and lofts are notorious for allowing valuable heat to escape commercial buildings. If this is the case for your business, consider insulating the areas where you are losing heat. Also, think about your windows. If you don’t have double glazing, consider getting new windows.

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Find The Best Energy Deals For Your Business With Business Energy Comparison

At Business Energy Comparison, we pride ourselves on being trustworthy. We’re also highly experienced, with several awards to our name.

We make it our mission to help businesses throughout the country find the best deal regarding their energy rates. We understand how stressful it is for businesses of all sizes to make ends meet at the moment.

And we never believe in paying for more than you should. For this reason, we work with a huge range of energy companies to help to make your electricity and gas bills a bit more manageable. You can compare prices from the best lenders through us so that you won’t be out of pocket.

If your tariff with your current energy provider is ending, use our website to get up-to-date rates on a new tariff. By assuming you won’t save money and staying with your current provider, means you will likely end up overpaying on your utility bills. And when money is so tight, this is never a good option.

Start your journey and compare electricity rates with us today. Use our price comparison tool and in less time than it takes to make a brew, we’ll compile your best prices from the UK’ s best suppliers.

It’s a worrying time for many businesses regarding rising costs, and energy usage is no exception. Thankfully, there are schemes available that can help UK businesses to ride out the storm of energy price hikes.

Use the Business Energy Comparison website to compare business gas prices and electricity tariffs. Otherwise, you could lose money and overpay on your gas and electricity bills. A business electricity comparison is one of the best things you can do to protect the longevity and success of your business.

Frequently Asked Questions

I am struggling to pay my bills; what should I do?

If you find yourself struggling to pay your business energy costs, it’s vital that you don’t ignore it and hope the problem goes away. While it is understandably stressful, you shouldn’t panic. Contact your energy provider as soon as you foresee any difficulties paying your bill. If you do so, it may mean your provider is able to offer you a grace period to pay your direct debit.

Your provider may also be able to offer you invaluable advice. Don’t delay in speaking to them. Many business owners are struggling, and customer service representatives are there to help you. It’s imperative you talk to them as soon as possible. Failure to do so, along with not being able to pay your bills, could potentially lead to severe financial implications in the future.

What's Ofgem doing about the energy price crisis?

Ofgem watches the energy market to set a price that they deem fair in energy. They aim to set a price that reflects the global situation. The government is also playing a part in helping businesses with the Relief Scheme and the Energy Price Guarantee.

Ofgem states they are actively working to stabilise the energy market in the long term. This should help to reduce the country’s heavy reliance on gas. Ofgem claims it will help to defend customers from any price hikes in the future.

What is the Energy Bills Support Scheme?

The Energy Bills Support Scheme is a government-funded scheme that provides a £400 non-repayable discount to domestic customers to help with their energy bills over winter 2022 to 2023. This Energy Bills Support Scheme should not be confused with the relief scheme available to businesses.