Rising global energy prices are a worry for all business owners. When the cost of your predicted annual bill doubles overnight, that’s likely to stretch your cashflow extremely thin.
The good news is the introduction of the Energy Bill Relief Scheme for qualifying businesses, helping to cap your gas and electricity costs at a more manageable level.
We’ve outlined the key rules around making use of the scheme, and have also shared some simple tips for reducing your energy usage and cutting overheads further.
How does the Energy Bill Relief Scheme (EBRS) work?
The Government will provide a discount on gas and electricity unit prices for non-domestic energy users that meet the qualifying conditions. This relief will be automatically applied to qualifying organisations from 1 October 2022 until 31 March 2023 (initially).
For all non-domestic energy users in Great Britain the government-supported price has been set at the following rate:
- £211 per megawatt hour (MWh) for electricity
- £75 per MWh for gas
A comparable rate will be set shortly for Northern Ireland.
Does your business qualify for the EBRS?
The EBRS will be available to everyone on a non-domestic contract including:
- businesses
- voluntary sector organisations, such as charities
- public sector organisations such as schools, hospitals and care homes
To qualify, you must be:
- on existing fixed price contracts that were agreed on or after 1 April 2022
- signing new fixed price contracts
- on deemed/out-of-contract or variable tariffs
- on flexible purchase or similar contracts.
There are some exclusions for businesses that use energy to produce power and then sell it back to the grid, but this is likely to be a small percentage of UK businesses.
How you will get the reduction
The support will be automatically applied to all eligible bills. You do not need to take action or apply to the scheme. The savings for energy used in October will be seen in your October bills, which would usually be received in November.
Simple ways to reduce the impact of the energy crisis
The EBRS will help hold back the impact of rising energy prices. But during the ongoing energy crisis, it’s also sensible to try reducing your company’s energy usage as much as possible.
Here are five ideas for bringing down your energy usage:
- Properly insulate your buildings – you obviously need to be sensible about heating and cooling your workspaces during the hot or cold months of the year. Using heating and air conditioning (air-con) 24/7 can be expensive, so it’s a good move to properly insulate your workspaces. If your rooms stay warmer in winter, and don’t bake in summer, your heating/air-con won’t be working so hard – reducing your energy spend.
- Be sensible with your lighting – lighting is another essential overhead, but also an area where smart gains can be made. Use energy-efficient light bulbs that draw less power. Don’t leave exterior lights on after business hours. And fit sensors in offices, meeting rooms and workshop spaces that turn off the lights if no-one is using the room. These are small actions that can quickly start to cut down your bill.
- Switch to energy-efficient equipment and technology – Review your company’s main electrical equipment and see how much energy could be saved by moving to updated, energy-efficient tech. With so many pieces of equipment always plugged in and turned on, having tech with low-power modes and automatic standby modes can greatly reduce your energy consumption.
- Consider using renewable energy – one way to escape the monopoly of your energy provider is to provide your own off-grid power. Some local authorities may even provide funding or grants to help you switch to solar or other renewable energy sources.
- Shop around for the most affordable energy provider – finding the most cost-effective energy provider can go a long way to bringing down your bills. Prices are obviously rising across the sector, but check out what deals are being offered by other energy providers and shop around.
You’ll soon start to see the EBRS making a difference to your energy costs from October 2022 onwards. But it’s still good practice to start reviewing and cutting your energy usage.
If you would like more help with managing your bills and accounts, please get in touch with our Cheshire based team.
