How is the energy crisis impacting businesses?

Since autumn 2021, prices have fluctuated massively but over the last couple of months energy prices have continued an upward trajectory and we do not believe these prices are going to drop anytime soon.

Wholesale electricity prices hit record high rates at the beginning of March hitting 453 £/mWh. During this time, wholesale gas prices also reached 535 p/therm. Wholesale gas prices have increased by 250% since the beginning of 2021, a rise of 70% in the last month alone.

Check out our business insights page, which has price graphs for the current wholesale price of gas and electricity.

Large and small businesses across the UK have been hit by staggering energy prices similarly to households.

There have been many schemes and grants put in place by the government to protect domestic consumers against rising energy bills as well as the price cap.

Although, the energy price cap does not protect business customers, which leaves small businesses exposed to price increases. No matter the size of the business, the price cap still does not protect businesses.

Because this is the case, we recommend that businesses secure long-term contracts to protect themselves against future price rises. We have always recommended this to our business customers, and this has protected our existing customers during the crisis.

Although, some businesses may find their energy contract is entering renewal this year or they may be on variable tariffs so they may be seeing their cost increase. If your business energy contract is entering renewal, contact one of our energy experts today to secure fixed rates for your business energy.

During the crisis we have seen twenty-eight energy suppliers cease trading, leaving many without an energy supplier.

If your energy company ceases trading, Ofgem will place you with a Supplier of Last Resort (SoLR) so your supply will never be cut off.

The official advice from the energy regulator Ofgem is:

1. Take a meter reading as soon as possible to ensure you have up-to-date energy usage. Contact Citizens Advice if you are in England or Wales, Advice Direct if you are in Scotland, or Advice NI if you live in Northern Ireland if you are unable to take a meter reading.
2. Ofgem will automatically find you another supplier within 14 days, so you do not need to find yourself another contract or cancel your direct debit.
3. Once your new provider has been appointed, you will be placed on deemed rates. Find out more about deemed rates here. Deemed rates are known to be much more expensive than your old tariff. This is where we can help you compare the energy market and help you avoid a rise in your costs as you are free to switch at any time.

Any credit you have with your previous supplier may be passed onto your new supplier as business credit balances are not protected by the Ofgem Safety Net.

You will need to discuss any outstanding credit with your new supplier as they may have a different payment plan from your previous supplier.

These significant increases are affecting millions of people and businesses across the UK, and many are struggling to afford rising costs. If you are in this situation, let us discuss the diverse options you could consider:

If you cannot afford your bills

If you are struggling to pay your energy bill, contact your energy provider as they may be able to set up a payment plan to make your costs more affordable.

In addition to this, you can also contact your supplier and ask for a payment reduction or more time to pay.

Another option you have is to contact the Citizens Advice helpline if you are unable to pay.

If you are in debt with your supplier

If you are in debt with your supplier, you need to contact them immediately to avoid the debt increases further. It is also important to act quickly if you cannot pay as your supplier may disconnect your energy if you do not contact them.

Additionally, you can also contact the Citizens Advice helpline for more information as mentioned above.

You can also contact Money Advice Trust’s Business Debt Line for further information on your business debts if your business is based in England, Wales and Scotland.

Improve your energy efficiency

Making your business more energy efficient will help reduce your energy consumption and therefore reduce your energy bill. Climate change is becoming an increasingly worrying problem which is why it is important to save energy where possible.

There are many ways you can become more energy efficient, check out our energy savings top tips to find out more.

Simple changes, such as switching to LED bulbs rather than using incandescent bulbs, improving your insulation, installing motion sensors, and monitoring your heating are all ways in which you can reduce your energy bills.

Check your bills

It is important to always check your energy bills to ensure your business is being billed accurately. This is crucial if your energy supplier is estimating your usage rather than using accurate meter readings or a smart meter.

Check new schemes and grants

The government has released many grants over the last year that can help customers afford their energy costs.

Check out the government and supplier schemes and find out if your business is eligible.

Energy prices and rising global demand are increasing, but we can help you find the best deal during these difficult market conditions. Let us help you secure a long-term fixed contract to protect your business against future price rises. Compare business electricity and gas prices now.

Contact us today to compare the market and switch your business energy supplier.