Energy costs have increased to a point where various business owners are finding it challenging to pay them, perhaps forcing thousands of small companies to close throughout the nation.
Unlike residential houses, commercial energy prices are not capped; therefore, some business owners are faced with a 350 percent increase in costs.
This might make you wonder, can businesses get help with energy bills? Well, if you are having trouble keeping up with your micro business’s energy expenses, your energy provider can offer assistance.
Also, you are eligible for additional financial aid. The choices you have will be based on your circumstances. So with that being said, read this article to find out more.
Is Businesses Subject To The Energy Price Cap?
Energy providers are subject to a cap on their gas as well as electricity prices, which are reevaluated twice a year. For those who are on an insolvency tariff, this entails that the standing costs and unit rates are subject to a cap. Thus the cap is on the number of units, not the amount you pay.
Business gas and electricity, on the other hand, will cost you differently, and sadly, there is no cap on the amount that suppliers can charge companies. However, 59 percent of small business proprietors feel a government assessment of the energy price cap might support them a lot.
What Happens If I’m Unable To Pay My Business’s Energy Bills?
Contacting your supplier to set up an energy payment strategy is the best course of action you can take if you are concerned about paying your power bill.
They might be able to assist by extending your payment deadline, reducing your payments, or allowing you a respite. Asking for access to finances for hardships may also be an option.
It is also worth noting down that you can contact Citizens Advice’s consumer hotline if you are in debt or have a bill that you might not be able to pay because your supplier has not given you a payment plan.
Avoid ignoring or allowing financial issues to worsen. A nonprofit organization called The Business Debt line can offer free debt counseling to small businesses in England, Wales as well as Scotland. You have the option of using their live web conversation assistance or calling one of their advisors.
Not paying your payments can affect your credit score, so keep that in mind as well. Additionally, you can speak with utility professionals to receive the finest guidance on how to control your company’s energy costs.
Check out the Utility Bidder if you’re having issues as they assist all different kinds of businesses. It’s one of the most well-known companies that many people trust.
Available Energy Grants For Small Businesses
According to reports, the government is looking at more options for helping small businesses with their energy costs in winter. A package like the Covid-19 initiatives, according to Chancellor Nadhim Zahawi, might benefit firms in overcoming the energy emergency. There have also been discussions about grants, VAT exemptions, as well as business rate holidays.
Should Your Energy Rates Be Set Till 2023?
There probably won’t be any cheaper offers available, but it’s still worthwhile to look around. You might also wish to think about negotiating a new fixed-rate contract with your current supplier.
If you receive an offer for a year’s fix at a price that is not additional than 95 percent of your existing price-capped taxation or 100 percent extra if you place a high amount on budgeting assurance, it is worth considering.
Higher Energy Efficiency
You might be able to improve the energy efficiency of your company in some way. You could seek grants to aid in your company’s transition to sustainability if these improvements aren’t all prohibitively pricey.
You might add sensors that lower lights in luminous rooms or switch to LED bulbs for lighting, for instance. And at the end of every day, make sure you shut off all lights as well as the equipment you can.
Support From Energy Suppliers
Small businesses who are having trouble paying their energy bills are advised to speak with their suppliers directly to talk over and possibly set up a payment strategy that would branch out their energy bill expenditures over a lengthy period or in smaller installments.
This is according to Ofgem, the UK’s energy industry regulator. Before speaking with your provider, you should also make sure to have a budget planned out so you can determine what kind of payment strategy would be feasible.
UK Government Assistance
The government has been under pressure from the business society to lengthen financial aid to small businesses ever after the Chancellor’s statement regarding a refund for consumers to offset the increase in energy bills in April 2022.
In the energy market, it is said that small businesses experience considerable exact issues as consumers, but without the same protections, according to Mike Cherry, who is the national chair of the Small Business Federation.
However, you must also keep in mind that the government has not yet made any statements regarding a package of financial services for businesses to deal with rising energy costs as of the time of publication.
Switch Your Suppliers
Private gas, as well as electricity suppliers in the UK, have been operating as a rival since British Gas, as well as the National Grid, privatized additional than 30 years ago in an effort to harness market forces to enhance efficiency as well as lower costs for consumers.
A privatized power sector does introduce some consumer options for both enterprises as well as private individuals, albeit whether this policy has been successful is a subject for a different discussion.
One method to reduce the expense of your energy bill as business energy tariff expenses climb up is to transfer suppliers and take benefit of new consumer discounts. Since there is said to be no price cap in commercial areas, changing your provider could significantly affect the amount you pay for gas as well as electricity.
If you have made it to the end of this guide, then I hope you have got the answer you were looking for. In a time when the energy bills are rising, as a business owner, you have to come up with strategies to help your business to grow more efficiently and save as much money as possible so you can deal with a crisis like this.
Installing a smart meter can help businesses save about 10 percent annually on fuel costs. Other energy-saving measures include upgrading insulation and lighting, as well as enhancing the performance of heating systems.