Energy costs have soared since 2022, leading to many businesses and households paying more than double for their gas and electricity when compared to before the energy crisis in 2021.  

With these increased costs, the government introduced the energy price cap to keep a lid on prices for domestic energy users.  

However, there is no such cap for businesses in the UK. 

Instead, the UK government chose to introduce the Energy Bills Discount scheme. This offered eligible businesses discounted rates on their energy contracts for 12 months from April 1st 2023 running through to March 31st 2024.  

The scheme has now ended, with no further government support currently available.  

What is an Energy Price Cap?

The energy price cap limits the amount that an energy supplier can charge customers for each unit of energy you consume. 

This was introduced by Ofgem, the energy regulator for the UK, in 2019 for the domestic energy market. 

This was brought into place due to concerns that many customers were not readily switching energy suppliers and some energy suppliers were exploiting this by pushing up the rates of energy, often referred to as a ‘loyalty penalty’ by those in the industry. 

The price cap is reviewed every 3 months. 

This only applies to the domestic energy market. 

Does the Energy Price Cap Apply to Businesses?

In simple terms, no, there is no such cap for business energy unlike with domestic energy. 

What Was the Energy Bill Relief Scheme?

The Energy Bill Relief Scheme (EBRS) was started in March 2023 and ran until April 2023 – This was ended and replaced by the Energy Bill Discount Scheme (EBDS) in April 2023. This scheme ended in March 2024 with no replacement on the horizon.  

The aim of these schemes was the same – to lower energy costs for businesses across the UK. 

However, this was done in a different way than the domestic price cap.  

Instead of capping prices, the EBRS & EBDS limited the wholesale price that suppliers would pay to generators for energy.  

The savings made by suppliers were therefore passed down the chain to the end consumer who received reduced rates. 

Why Isn’t There a Business Energy Price Cap?

There is a stark difference between a commercial energy contract and a domestic energy contract, that complicates putting in a price cap for business energy rates.  

This difference is how the energy is used. For domestic energy, regardless of size of the property, energy is used in a similar manner e.g to power lights, for appliances, heating etc. The energy consumed at a domestic property will also follow a pattern in terms of when it is used, usually higher usage during non-working hours (outside 9am – 5pm) and over weekends.  

However, when it comes to business energy this is completely different.  

A takeaway and a manufacturer may both need electricity to function, but the way in which they use the power is completely different. This is why there are not many ‘off the shelf’ options for businesses and contracts are usually tailored to meet the specific needs of any given business.  

This complexity makes it difficult for the government to implement a blanket rate across all businesses so that is why there is no energy price cap for businesses.  

The Energy Bills Discount Scheme was designed to take into account the complexities of the commercial energy market and offer support for businesses of all sizes.  

Should You Fix Business Energy Rates Instead?

Fixing your business energy rates can help to mitigate the risks of energy costs. 

By fixing your energy rates over a fixed time period you will be safe from the fluctuations in the wholesale market. 

However there are some limitations to fixing your energy rates, to find out more head over to our dedicated blog.

Tips for Keeping Business Energy Prices Low

If you are looking to save money on your energy bills, one of the best ways is by switching suppliers. 

We understand that this may not always be possible, but there are alternative options to help you lower your bills but these will depend on your current situation.  

We will discuss your options in depth below. 

Switching Suppliers 

Shopping around for a better deal is always a great place to start when looking to lower your energy bills.  

However please keep in mind that this is only possible if you have entered your renewal window (Usually 12 months before your contract ends) and that you won’t be on your new rates until the existing contract has ended.  

You also need to have no outstanding debt on your account, or your current supplier will object to your move.  

It’s usually best to looking a switching if: 

• The fixed term of your contract has ended, and you are now on an out of contract tariff – the rates on this tariff are amongst the highest to encourage you to either renew or switch suppliers 

• You are on a tariff you didn’t choose e.g you inherited the tariff when moving premises, you’ll be on ‘deemed rates’, these are basically the same as out of contract rates and are inflated to encourage businesses to signed a new contract.  

If you are looking to switch, you can get a quote from us here.

Check you’re being billed the right amount 

If you ever think that your bill amount is wrong you should challenge it, this can be done with a simple call or email to your supplier.  

If your supplier is estimating your bills you might be paying for more than you are actually using each month.  

You can counter this by regularly providing meter reads to your supplier during their metering window. (At Dyce Energy our metering window runs from the 25th to the end of the month) 

Ask about a smart meter  

If you don’t already have a smart meter you can ask your supplier to install one, please note if you are in rented premises you need to check with your landlord before doing this.  

A smart meter will automatically send your meter readings to your supplier, saving you time and costs by ensuring you are only paying for the energy used.  

Once a smart meter has been installed in most cases you will receive an in-house display – sometimes referred to as a smart energy monitor.  

This handy device will allow you to track the energy you are using and the estimated cost.  

Become more energy efficient  

There are many ways to reduce how much energy your business is using, some of the quickest cost-effective methods are: 

• Ensure all equipment is turned off overnight if not in use.

• Use LED lighting.

• Ensure the property is properly insulated to avoid drafts and losing heat.

What If I Can’t Pay My Business Energy Bills?

If you can’t pay your energy bills, there are multiple available options to you. 

To find out more about the options that may be available to your business, head over our ‘do businesses get help with energy bills’.