Since October 2022, businesses have been protected against the worst of the energy crisis by the Business Energy Relief Scheme. It’s been the difference between life and death for a lot of companies.

On 1 April 2023, the relief scheme is coming to an end. In this article, we look at what’s coming next for business energy costs and look at what your business can do to save on business energy.

The ongoing energy crisis

On 24 February 2022, Russia’s tanks rolled into Ukraine, sparking an unprecedented European energy crisis.

In response to economic sanctions by European and Western countries, Russia has severely restricted the natural gas supply to Europe. Unfortunately, Europe is incredibly reliant upon the steady flow of cheap natural gas from its giant neighbor.

The reduced gas supplies have raised serious concerns about whether Europe will have sufficient gas in the next two winters pushing up prices.

The business energy relief scheme

To avoid a mass of business insolvencies, the government intervened in the commercial energy market to discount electricity and gas bills.

The government scheme for business energy bills is known as the Energy Relief Scheme. Starting in October 2022, for six months, discounts are automatically applied to all business gas and electricity bills to cap the wholesale cost of electricity and gas.

The relief scheme has significantly reduced business energy bills for most businesses holding the wholesale cost of electricity at 21.1p/kWh and gas at 7.5p/kWh.

Unfortunately, the lifeline offered by the government scheme is about to come to an end.  So let’s look at what businesses can do about the imminent rise in the cost of energy.

What can businesses do about the rising cost of energy?

Here we explore some top tips to help businesses deal with the rising cost of energy:

Compare the market for business energy

One effect of the business energy relief scheme is that all companies pay roughly the same energy rates, regardless of their energy tariff and supplier.

But the end of government support means that it is once again important to find a cheap deal on your business energy. 

Business energy suppliers are offering fixed-term contracts between one and three years that lock businesses into an agreed price per unit kWh of electricity and gas.  These contracts can provide business owners with real certainty about future bills.

The volatility in wholesale prices means there are massive discrepancies in the fixed-term rates being offered by suppliers.  We recommend using a business energy comparison service to compare many suppliers simultaneously and find the best deal for your business.

Improve business energy efficiency

The electricity and gas bills paid by businesses are not fixed.  Businesses pay for each unit of electricity and gas they use, so a simple way of reducing bills is to use less energy. Here are a few ideas that will quickly reduce your energy bills:

1. Programmable thermostat:

A programmable thermostat can make heating and cooling an office much more straightforward by adjusting the temperature of your workplace by following your rules.

With a programmable thermostat, you can ensure the heating is off when the office is empty such as on the weekends. You could even schedule the heat to turn on just before people arrive and off about an hour before they leave.

If you already have a programmable thermostat, maybe it’s time to review the controls. Making your boiler work even slightly less hard to keep the office warm will significantly affect your overall energy bills.

1. Use more efficient office lighting:

Some studies have shown that typically, 40% of the energy your business uses goes on lighting business offices. It’s such a significant cost that it’s straightforward to save money on energy costs.  We recommend:

• Swapping out your old-fashioned filament bulbs with modern LEDs. Despite the upfront cost of replacing them, they could save your business a lot of energy and often last longer.
• Ask your colleagues to turn off the lights when they leave an empty room. It may sound obvious, but you’d be surprised how often it’s missed.

One even better solution is to use the sun itself.  Making sure all windows are uncovered will flood your office with natural light that employees will appreciate.

The prospects for 2023

The last year has been incredibly difficult for British businesses. Wage inflation has soared to 10%, and workers across the country are striking.  Unfortunately, it’s not just energy costs that are also going up.  Business water suppliers are also expected to hike their rates from 1 April.

Many businesses are anxiously watching for signs of an economic recovery.  Happily, signs are good with lowering wholesale energy prices and a recovering China.  Business owners across the country are hoping they can see the light at the end of the tunnel.