What is the energy cap and how can it affect you and your business?
Due to global challenges and the Ukraine War, the price suppliers charge per unit of energy has gone up significantly. To help protect consumers, the Government has announced the Energy Price Guarantee, which came into effect on October 1st, 2022.
This new scheme will cap the unit cost of electricity and gas so that a household with typical energy use in Great Britain pays, on average, around £2,500 a year on their energy bill, for the next 2 years. Thanks to the scheme, British households will save roughly £1,000 a year (based on current prices from October).
So, what does this mean for business owners?
Businesses pay different rates for gas and electricity compared to those you would expect to pay within the home, and unfortunately there isn’t a cap for business owners on what suppliers can charge.
However, there will be an equivalent guarantee for business for six months (and reviewed after three), meaning that energy costs for businesses will be capped at the same price as for homes. The chancellor will also be working with businesses over the coming months to see whether support should be more targeted on those that are vulnerable, such as hospitality businesses.
What is the Energy Bill Support Scheme?
The Energy Bills Support Scheme (EBSS) is a non-repayable discount of £400 from the government that every household with a domestic electricity connection in England, Wales and Scotland will begin receiving from October 2022 to help offset higher energy costs this winter.
Although it isn’t in place to support small businesses specifically, the scheme may still be helpful if your business operates from home For those eligible, the discount will be applied monthly and automatically to their electricity bill over a six month period, starting from October 2022.
How can I make further savings?
Finding new ways to save money on our bills is a priority for all of us- even more so if you’re running a business. In the past we would usually do this by shopping around for a new energy deal. Martin Lewis, financial journalist and owner of the website Money Saving Expert, says;
“If you’re offered a year’s fix at no more than 95 per cent above your current price-capped tariff, or 100 per cent more if you very strongly value budgeting certainty, it’s worth considering.”
The reality is that there aren’t any cheap deals out there to be had as the costs of energy continue to soar.
There are some other cost saving ideas worth considering, including;
- Reducing your usage – replace lights with LED bulbs and make sure you turn off any lights and machinery when you aren’t using them – laptops, computers, printers – even smart devices use up energy and used energy = additional costs.
- Understand your energy usage – smart meters can be a really useful tool when it comes to budgeting as they let you know in real time how much you are using on a daily basis
- If you work from home, consider if possible working from spaces that allow internet access, such as libraries or alternatively you could use a cafe or one of Tree Shepherd’s co-working space such as THRIVE or GLOWS
What if I need help paying my bills?
For more business support or enquiries about workspaces, visit Tree Shepherd for more information.