7 months ago
The UK Government has announced the Energy Bill Relief Scheme, designed to help UK businesses combat rising energy prices by discounting energy bills. The scheme could save companies a lot of money, but to take advantage of it, you should act soon, as the scheme comes into effect on 1st October 2022. In this article, we explain how this scheme can benefit your business and what you should do to take advantage of it and maximise your savings.
The UK Government designed the Energy Bill Relief Scheme (EBRS) to combat drastically increasing energy costs, helping businesses, charities and the public sector save money by discounting their energy bills.
The UK Government isn't calling the reduction in energy costs a cap. Instead, they're providing businesses with a discount that suppliers apply directly to energy bills, but how does this work?
The Department for Business, Energy and Industrial Strategy (BEIS) has set the 'supported wholesale price' at £211 per MWh for electricity and £75 per MWh for gas for non-domestic customers. The discount your business receives will be for the difference between the supported wholesale price and the actual wholesale price. This discount will subsequently be applied to energy bills in pence per kilowatt hour (p/kWh).
Under the EBRS, the supported wholesale price for electricity becomes 21p p/kWh. So, if for example, the wholesale price is 40p p/kWh, your business would receive a discount of 19p p/kWh.
How much discount you'll receive on your business energy bill depends on the difference between the wholesale price and the UK Government supported wholesale price. Accordingly, if you've been paying considerably more for your business energy recently, your business could receive a substantial energy bill discount.
Based on the Maximum Discount predicted by the government and average energy use estimates, small businesses could save £843.75 a month on electricity and £287.50 a month on gas.
The Energy Bill Relief Scheme will come into effect on 1st October 2022 and run for six months until 31st March 2023. During this time, a discount will be applied to your business energy bill, whether you're on a fixed or variable contract. The EBRS is being reviewed after three months, but we don't know if it will continue, change or end after the 31st March 2023.
One of the great things about the Energy Bill Relief Scheme is that you don't need to apply or claim it. It's automatically applied to your business energy bills. This means that you don't have to fill out any application forms or go through an approval process. You just need to find the best value energy contract for your business to maximise your savings.
If you're on a fixed price business energy contract agreed upon after 1st April 2022, a price cut will automatically be applied to your account. Unfortunately, this isn't the case if you entered into a fixed price business energy contract before 1st April 2022. You might have to wait for your contract to end before switching to a better-value business energy contract.
You should still save some money on your business energy bills as a result of the discount, but you can maximise your discount by locking in the best value fixed price business energy contract. You want to do this because although the UK government is providing a discount; because this discount is for a fixed amount, your energy bills could still rise if you're on a variable contract. Subsequently, locking in a fixed price removes the risk of your energy bills increasing, unnecessarily costing your business money.
Presently, the Energy Bill Relief Scheme is only running for 6 months. By locking in a great value fixed price contract, you can maximise your business energy savings beyond 31st March 2023.
To find the best value business energy contract, firstly you need to compare what's available. At BusinessComparison, we specialise in helping businesses compare everything from Broadband to Card Machines and Bank Accounts, including Business Energy. Compare today to maximise your savings.