As energy prices fluctuate, struggling businesses need to seek more support. The UK energy market has experienced high price rises for wholesale gas and electricity, and businesses face an increasing cost burden.
The government has stepped in with discount schemes such as the EBRS (Energy Bill Relief Scheme), which was replaced by the EBDS (Energy Bills Discount Scheme) on April 1st 2023. However, funding for this scheme has been cut and may not support most businesses enough.
Energy prices dropped throughout 2022 — this was due to a mild winter and businesses cutting their energy usage to avoid high energy bills. However, prices are still expensive and have not returned to pre-pandemic prices despite the fall in wholesale prices.
This growing economic insecurity and its effects on long-term budget planning places pressure on the UK government to provide much more business support.
A House of Commons Committee report showed an eye-watering energy price increase:
“Wholesale energy prices have increased significantly, from £1,200 per year for a typical household in 2021 to £3,300 as of May 2023. To support households and businesses, the government and the energy regulator have introduced energy bill support schemes.”
In this post, we’ll look at how to get business energy support, cut energy bills and what energy support schemes and grants can help.
Agreeing on a business energy payment plan
What types of business energy support can suppliers offer? Firstly, it’s important to note that if you’re facing payment concerns regarding energy bills, you can contact your supplier to discuss payment concerns and explore available support options.
Ofgem has made it a rule to negotiate with customers experiencing financial hardship. This allows you to ask about payment plan arrangements and even payment breaks if necessary. Not all situations are the same, and it’s best to discuss options with your supplier.
What business support can energy suppliers offer?
- Payment plan reviews and adjustments: Discuss your finances early with suppliers so you can negotiate a payment plan. Usually, a phone call is enough to go over your income and expenditure and set up a temporary plan to ease the strain. If you want to communicate only via correspondence, here’s an example payment negotiation letter template to help.
- Payment breaks or reductions: Many suppliers will arrange a temporary payment break so you pay nothing for a short period. This breathing space arrangement is quite common.
- Extended time for payments: You may gain an extended period to pay for outstanding payments. This may suit you better than a payment break, which could make your energy debt worse if allowed to continue for many months.
- Access to hardship funds: Ask if the supplier has hardship funds for businesses.
Steps to take if unable to reach an agreement
All suppliers must allow businesses to negotiate a payment plan if they are under financial stress. However, let Ofgem know if they refuse you any form of arrangement, and get the reason from the supplier in writing.
You can also call the payment help and energy debt advice line at Citizens Advice.
Business finance schemes and grants
Schemes and grants from the UK government help businesses with energy bills so that they can improve energy efficiency. The support can be one of:
- Help with energy audits to advise on saving energy.
- Interest-free loans or grants for sustainable energy upgrades like LED lights and renewable energy systems.
Your eligibility for the grants will depend on the size of your business and the sector. Since every supplier has different conditions, speak to your supplier about what grants are available.
If you need a grant for a renewable energy installation, you can get free and independent advice from the NEF (National Energy Foundation). You will also need to find an experienced installer in your area, if possible. The NEF site has information on energy-efficient upgrade installers. Ask them if there are any trusted installer services in your area or close.
Here are available grants and schemes for businesses.
The green gas support scheme and green gas levy
- Supports the production of bio-methane in promoting sustainable energy sources.
- The scheme offers fixed tariffs for every unit of bio-methane used in the gas grid.
- The scheme replaces the Renewable Heat Incentive (RHI) tariff.
- Full information can be read on the Ofgem site.
The Energy Bills Discount Scheme (EBDS)
- Supports eligible non-domestic customers through discounts on energy rates that are fixed price or flexible purchase contracts.
- Customers must be in Great Britain or Northern Ireland.
- Three discounts are on offer for the Energy and Trade Intensive Industries (ETII), a baseline cut for most businesses and the Heat Network discount.
- The scheme runs from April 2023 to March 2024.
- Full information can be read on the UK GOV website: Read more.
Smart export guarantee (SEG)
- The SEG allows you to earn money for exporting any excess renewable electricity back to the grid, so you save money by importing less.
- Your renewable electricity system must meet SEG eligibility requirements.
- Full information can be read on the UK GOV site.
There are a range of renewable energy and financial assistance programs for businesses. Use the UK GOV website finance finder to see what other grants or loans are available. Local councils can provide information on grants to help businesses with high energy bills.
What other support schemes exist?
If you are looking for a grant to cover new plant equipment, check the GOV.UK energy technology list to see if your equipment, such as energy-efficient boilers and lighting, plans are covered. Then, ask your energy supplier and your local council about sustainable energy grants and the UK Research and Information site.
Charitable grants and support services
There are two fantastic online resources for sourcing any available financial aid. They are:
- Grants Online provides access to a database of funding options for businesses to browse through.
- Find available charitable funds for businesses on Let’s Talk, where information includes grants from charitable foundations.
Business debt advice
The Business DebtLine service offers free and confidential advice if you want to chat about energy bills and other debts. They can help you create a plan to:
- Work out a suitable budget
- Deal with both priority and non-priority debts
- Establish how to increase your income.
You can use their chat feature on the site to get business energy support if you prefer to discuss it quickly via text. Their staff completely understand the difficulties faced and the impact on mental health. The free service can really help with a positive outlook and plan.
Prioritising debts and creating a budgeting strategy
A good start is to create a budgeting strategy, which the business debtline can help with. To improve your bottom line, you need financial stability, and creating a business budgeting plan can help to plan for unforeseen debts, cover expenses and maintain your cash flow. This will comprise a list of your debts, prioritising the highest interest rates.
A budgeting plan will show where costs can be reduced and create a roadmap to deal with debt repayments on outstanding energy bills. You can chat with us about the local energy market, its rates and pricing trends, and we can help with green options for your business.
Here’s a breakdown of how to create a long-term energy budget for your business.
- Look for any new providers and their contract terms in your location. There may be better deals.
- Analyse your energy usage and think about whether future usage will be higher than past consumption.
- Include any changes that may require more energy usage, such as plans for additional equipment.
- Look through your past energy bills and start an energy audit. Note your usage over at least the past year and how it’s used, additional charges, wastage and account for this data in your budget.
- Highlight where you can cut down on energy usage or invest in on-site energy generation.
Cost-cutting and energy efficiency
Here’s a quick guide to help you decide on switching energy tariff or supplier. There are many reasons to want to switch suppliers or tariffs. If you find better value for money, make the switch.
What to be aware of before you switch?
- Before switching: Have the information about your current supplier to hand, i.e. supplier name, tariff and annual energy costs.
- Take care with fixed deals: Check the exit fees and changes to the price cap if choosing fixed deals.
- Price stability: Fixed-rate tariffs are better for long-term price stability.
- Use comparison sites: Before choosing a new supplier, take the time to compare deals on comparison sites.
- Time to reconsider if necessary: The switch can be completed within five working days. You will have a 14-day cooling-off period during which you can cancel the switch.
- Ofgem Guaranteed Standards: If issues occur during the switching process, Ofgem sets a standard for suppliers to ensure prompt resolution. You can make a complaint if this happens. View the list of standards and compensation awarded if the supplier does not resolve any issues.
The benefits of installing smart meters
The foremost benefit recognised by both homeowners and business owners is that using smart meters can help reduce energy usage.
Smart meters provide accurate data on the readings for precise billing. The significant part is constant visual notice via an in-home display so you can check your energy usage habits and improve them if necessary.
Pros of smart meters
Accurate billing: There are no manual meter readings, so you gain accurate data for precise billing, eliminating concerns over bill estimations.
In-home display: Smart meters enable you to make smart energy consumption decisions and improve your energy habits. The IHD, or in-home display, allows you to make ongoing informed decisions that can benefit you with cost savings.
Time-of-use tariffs: These provide different energy rates at various times of the day. Take advantage of these tariffs as you can plan how to reduce costs.
Understand how back billing rules work for micro-businesses
Your supplier will send out back bills to you if you weren’t properly charged. However, there are rules that protect you, too. Let’s go through some top points.
If you receive a back billing letter from your supplier, know your rights. They are the following:
- Was the bill for electricity or gas over 12 months ago? If so, you cannot be back-billed for the amount if you never received accurate billing.
- If this happens, whether or not in error, consider getting a smart meter, as these provide accurate readings. There is no need to regularly provide your supplier with meter readings.
- Ask your supplier about repayment options if the back bill is correct. You can also call the Citizens Advice on 0808 223 1133 or use their web chat.
Additional resources and help
How to get help with your small business energy bills —Citizens Advice
The Extra Help Unit can raise complaints with your energy supplier for you —Extra Help unit
Get help and support for your business —GOV.UK
Talk to Ofgem about your electricity and gas bill concerns —Ofgem
Business Debtline’s free consultation service —Business Debtline
Grants Online provides access to funding options for businesses —Grants Online
Let’s Talk has information on grants from charitable foundations —Let’s Talk
Payment Help and Energy Debt Advice line — Citizens Advice.
If you need a trusted team to help you achieve your renewable energy goals, talk to our energy management experts at Renew & Sustain. Let us conduct a comprehensive energy assessment of your business, and we will identify opportunities for renewable energy integration. Get in touch to request a free, no-obligation quote. We’re here to empower your business with sustainable energy solutions.
