The new energy price cap on the 1st of April, combined with soaring energy prices and the collapse of several firms, means that many businesses will see increases to their energy bills this year.
Why are business energy prices increasing?
Several factors have contributed to soaring energy prices for households and commercial businesses alike, including high global demand, reduced supply from Russia, and lower solar and wind energy output.
Wholesale energy prices have risen even higher following Russia’s invasion of Ukraine, which is the world’s largest natural gas exporter.
Ofgem’s new energy price cap – the maximum price suppliers can charge – will increase by £693 from April, meaning that electricity and gas bills for a typical household will go up by 54% a year, with bigger rises predicted for many SME businesses.
Will my business energy costs increase?
Although commercial energy bills won’t rise immediately for businesses on fixed rates, many are likely to see a significant increase when their deal ends.
In addition, several energy suppliers have collapsed as a result of rising costs, with affected customers being placed with new business energy providers.
Usually, businesses would be encouraged to shop around to secure a better deal, but in the current market switching providers is difficult and many energy firms are unable to offer a better fixed rate deal.
Instead, people already on fixed business energy deals are being advised to stay put before higher price caps come into force in April and those coming to the end of a fixed deal are likely to be moved onto higher standard tariffs.
So, how can you save money on your commercial energy bills?
If you are unable to switch deals or have been moved onto a higher tariff, there are other ways to help reduce your business’s energy consumption.
Having a smart meter installed can save companies around 10% on their annual fuel bills and the Energy Saving Trust says simple changes to our offices and habits could also offset the current price rises.
Improving the efficiency of your heating system and ensuring solid wall and floor insulation can make a big difference, and even switching to LED lightbulbs can save around £30 a year. You can also save £200 a year by turning down your thermostat by just one degree.
Additionally, ensuring items left on standby mode are properly switched off can save £86 on average, according to research from electricity and gas supplier Utilita. The biggest culprits are TVs, printers, and computers – which can cost £40 each per year if not properly shut down.
So, with a few simple changes, you can ensure that your business is well prepared to offset the rise in commercial energy prices in 2022.
Optimise your business energy consumption with Enexus
Enexus Energy develops bespoke, innovative strategies to optimise the way your business purchases, generates and consumes energy.
We can help you take proactive measures for your 2022 business energy contracts. We can track the market on your behalf, source the very best prices and suggest alternative contract structures to ensure you buy energy in the most cost-effective way. We can also help you reduce consumption and guide you to lasting savings on your energy costs.
To see how we can help, please get in touch:
Tel: 01253 966 960