Is There An Energy Price Cap For Businesses?

With recent announcements from the UK government that the energy price cap now resides at the lofty heights of £3,549 to homeowners’ dismay, many business owners are unsure if this affects their organisation’s energy usage rates, and how to cope effectively with the strain of the ongoing energy crisis.

Here at National Energy Direct we want to help clarify the situation and offer guidance on dealing with the matter.

What Is The UK Energy Price Cap?

The energy price cap is set by Ofgem (Office of Gas and Electricity Markets), and is defined as - the maximum amount a utility company is permitted to charge a customer in Great Britain per year for the amount of electricity and gas they use on default, or standard variable tariffs.

The energy cap has recently seen its second successive huge leap, with the already record breaking cap of £1,971 rising by 80% to £3,549!

The whole basis for the introduction of a standard and accepted energy price cap in the UK was to negate potential fuel poverty and protect consumers from the eventuality of massive bill hikes. So the fact that this initiative price barrier has risen to such a high price is now counterproductive, as many homes will struggle to meet the new tariff costs.

Does This Affect Businesses?

While the energy price cap was created to ‘protect’ consumers from unfair energy prices, although in this case it more condemns them, worryingly there is no current energy cap to protect UK businesses from even more extortionate energy prices.

Chairman of the Business, Energy and Industrial Strategy Committee, Darren Jones, ominously states "many businesses will face bankruptcy because there is no price cap on their energy bills".

Businesses or anyone operating on a commercial premises could be subject to untethered energy costs. Many business proprietors are actually pleading for an energy cap to be implemented to shield their companies, some of which are paying four times their normal energy rates!

David Clare, chair of the Federation of Small Businesses exclaims "We're calling on the government to bring business into the price cap system,".

Is There Any Help for Businesses Available?

Thankfully there are a few steps you could take in order to potentially reduce the impact of soaring energy prices on your business.

Agree A Bespoke Energy Payment Plan

Ofgem suggests being proactive, and contacting your energy supplier as soon as possible if you are worried about the prices your business may be facing. Suppliers in some cases may be able to work with you to tailor a bespoke strategy solution. You can ask for -

A break or reduction in payments
A review of your payments and debt repayments
Access to hardship funds
Extra time to pay

Check For Relevant Finance Schemes Or Grants

Government

The government has a specific finance support search tool, or submit a business case application to your local council for information on small business funding and sustainable growth plans.

Suppliers

Some energy supply companies offer cost-reducing schemes or grants, these can improve energy efficiency and lower outgoings.

Charities

Some charities can offer free funding or grants to support businesses.

Get Expert Debt Advice

Expert advice on managing business debt can be a great help if you feel your outstanding payments are becoming increasingly difficult to meet.

General Tips

Look into getting a smart meter installed in your commercial premises
Look into more viable business energy contracts
Look into energy back billing rules

National Energy Direct

We are a fully accredited multi-utility connections and delivery team who specialise in new build domestic properties, commercial and industrial units, as well as catering for all aspects of the energy market.