What Business Help with Energy Bills from Government is Available?

What Business Help with Energy Bills from Government is Available?

Energy bills through the roof lately? Those skyrocketing utility costs have been a total headache for businesses across the board. With prices just relentlessly climbing higher and higher, those monthly statements are putting the squeeze on companies in a major way right now.

Can businesses get help with energy bills? The government has actually stepped up with some potential relief. They recognise that these insane energy expenditures are straining smaller outfits and major corporations alike.

In this article, we’re going to break down all the various business help with energy bills you may be able to tap into to help ease that utility overhead weighing you down. From rebates and discounts to loans and special exemptions, there are actually quite a few potential lifelines out there to offset these out-of-control energy costs.

What Support Is Available For Business Energy Bills From Government? How do They Work?

This section covers the various help for business with energy bills from governments to help businesses, households, and major industrial operations manage their energy bills and costs.

Government’s Energy Bills Support For Non-domestic Businesses

As energy prices went through the roof, the government has given effective aid programs to help non-domestic customers – from businesses and public organisations to charities.

Energy Bill Discount Scheme (EBDS)

The Energy Bills Discount Scheme (EBDS) was launched to help offset utility costs on April 1st, 2023. Instead of limiting price caps, this scheme shaves some money off the rates businesses pay per unit of gas and electricity.

As long as the wholesale rates are higher than certain thresholds, you will get a discount on that wholesale portion of your bill. And businesses that use a ton of energy, like manufacturers, will get more discounts with lower thresholds.

For most businesses, though, here’s how the math shakes out:

  • For gas, you’ll get up to 0.7 pence per kilowatt-hour knocked off anything your supplier is charging over 10.7p per kWh at the wholesale level.
  • For electricity, it’s up to 2 pence per kWh off anything over 30.2p per kWh wholesale.
  • The lowest you could possibly pay is 10.7p per kWh for gas and 30.2p per kWh for electricity after the discount. If your current rates are already below those thresholds, you won’t qualify for this rebate.
Energy Bill Discount Scheme (EBDS)

Energy Bill Relief Scheme (EBRS)

From October 2022 to March 2023, there was a program called the Energy Bill Relief Scheme (EBRS) that gave discounts on business energy bills. This business help with energy bills was replaced by the new Energy Bills Discount Scheme on April 1, 2023.

The EBRS scheme worked a little differently than just straight-up capping the rates businesses paid. Instead of limiting the actual prices on your utility bills, it put a lid on how much suppliers themselves could pay to buy the energy wholesale from the generators.

So by capping those wholesale costs for suppliers, it allowed them to then pass those savings directly along to businesses through discounts on the wholesale portion of your energy bills. This discount applied whether you just signed a new business energy contract after December 1, 2021, or if you were on a flexible or out-of-contract rate.

For that 6-month period, suppliers were basically handcuffed – they couldn’t pay more than £211 per megawatt hour wholesale for electricity or £75 per megawatt hour for gas. It is around 21p per kilowatt hour max for electricity and 7.5p per kWh for gas at that wholesale level. The government set those as the highest allowable prices suppliers could get charged.

Non-domestic Alternative Fuel Payments (ND-AFP)

This was part of the government’s broader cost of living assistance over the winter 2022-2023 season, providing a flat £150 payment to non-domestic users of alternative fuels, like heating oil for example, instead of gas or electricity.

For most customers that get alternative fuels through a non-domestic supplier, that £150 was automatically paid out by their electricity supplier in February and March 2023 – they didn’t have to apply.

On top of that £150, there are also some extra top-up payments available specifically for really big users of heating oil in Great Britain and Northern Ireland, since their usage is so much higher. To get this top-up, they have to apply and the amount is based on their actual heating oil usage levels. The highest-use customers get custom payment amounts.

Government’s Energy Bills Support For Domestic Businesses

The government also supports schemes for domestic consumers with a domestic electricity contract with an energy supplier.

Government's Energy Bills Support For Domestic Businesses

Energy Price Guarantee (EPG)

The Energy Bills Support Scheme helps households afford their energy bills during the winter of 2022-2023, when prices were very high. The scheme gave a £400 discount to eligible households, which was split into smaller amounts and automatically taken off their monthly energy bills over a 6-month period.

Nearly every household with an electricity meter for their home was eligible, including those using fuels like oil instead of gas. Around 29 million households across the UK received this discount. Households did not need to apply – their energy supplier identified them and applied the discounts automatically.

With energy bills so expensive that winter, the £400 discount helped ensure people could adequately heat their homes without skimping on usage due to costs. It provided some crucial financial relief to household budgets strained by high energy prices.

Energy Bills Support Scheme (EBSS)

The Energy Bills Support Scheme was a government business that helped households with energy bills to afford their heating and electricity over the incredibly expensive winter of 2022-2023. Basically, it provided a £400 discount that lowered the rates households actually paid per unit of gas and electricity.

For most people, this £400 was automatically spread out over 6 monthly instalments and applied as a credit on energy bills. Those not on the main gas/electric grid could get the £400 as a lump sum payment instead through an Alternative Fund.

With this £400 discount, the aim was to make energy costs a bit more manageable and prevent people from self-disconnecting due to unaffordable bills or being forced into fuel poverty. Aside from lowering costs for families, the scheme also helped stabilise energy suppliers during the price turmoil and took some inflationary pressure off the economy overall.

Government’s Energy Bills Support For Energy Intensive Industries

For big industrial companies that use massive amounts of electricity, do businesses get help with energy bills? Certainly, the government has a special support program for these businesses instead of direct discounts. It exempts them from some costs or compensates them for the higher electricity prices caused by environmental policies.

Climate change levies, contracts for renewable energy, obligations for suppliers to get renewables, and feed-in tariff schemes all make electricity more expensive. So, the government covers up to 70% of those extra costs for companies in very energy-intensive industries, namely manufacturing, mining, quarrying, etc.

To get this business help with energy bills, at least half of a company’s revenue must come from those eligible energy-guzzling business sectors based on certain codes. They need to have a non-domestic energy contract, whether recently negotiated, variable rates, flexible purchasing contracts, or even contracts that technically expired.

The idea is to help offset the more expensive electricity from environmental policies so that huge factories, plants, and industrial operations can keep running affordably despite wild market prices. It prevents those green policies from making energy costs totally unmanageable for heavy industrial users.

Government's Energy Bills Support For Energy Intensive Industries

Factors Affecting Energy Bill Costs Support

There are two primary factors that influence the amount the government spends on assisting households and businesses with their energy bills: the cost of energy itself and the demand for energy.

  • Cost of energy: If energy prices remain high due to factors such as increased demand during cold weather, inefficient procurement by suppliers, or disruptions to the supply chain, this drives up the cost of support schemes. Conversely, if prices decrease due to lower demand during warmer weather, effective supplier strategies, or stable supply chains, it becomes cheaper for the government.
  • Demand for energy: If energy demand remains low, either due to warm temperatures, reduced usage during periods of high prices, or improved home/business efficiency, the support schemes do not need to cover as much consumption, resulting in lower costs. However, demand could surge in cases of an exceptionally cold winter if consumers do not reduce usage despite high prices or if homes/businesses are highly inefficient with energy use.

Essentially, the colder it gets, the more demand will increase, and the higher the energy will cost. Therefore, the higher the demand, the more support benefits the government has to provide to cover those larger energy bills. So, the combination of unaffordable prices and high usage represents the worst-case scenario in terms of costs for these bill support measures.

Future Risks of Energy Bills Support

This part outlines the remaining risks that the government needs to manage regarding its help with business energy bills, including as it considers options for replacing or terminating the current programs.

Future Risks of Energy Bills Support

Energy Bills Support Risks

  • Fraud and Error: These risks arise from the untested nature of the scheme design and the rapid implementation pace, which could lead to insufficient checks on erroneous claims and payments, as well as a lack of government capacity and capability to perform such checks.
  • Supplier Insolvency: If more suppliers become insolvent, the payments made by BEIS through its support schemes may not reach intended consumers.
  • Ensuring Support Reaches Eligible Homes and Businesses: BEIS needs to ensure that all eligible recipients receive support. There are issues ensuring support reaches households with prepayment meters. The risk is higher of support not reaching eligible recipients where they are required to apply for the support.
  • Capacity and Capability in Government: It is challenging to ensure sufficient capacity to continue managing the schemes and develop replacement schemes. BEIS will also need to allocate adequate resources to recover funds determined to be overpaid in the initial phase of the schemes.

Reviewing the Schemes

  • EBRS (non-domestic): When the government introduced the EBRS, it planned to review the scheme within three months of its launch to consider how it will continue to support vulnerable sectors after the scheme ends in March 2023.
  • EPG (domestic scheme): HM Treasury and BEIS are reviewing the EPG through an affordability and mid-point review. They plan to consult on amending the scheme as soon as feasible after April 2023 so that households with non-critical excessive energy consumption have their government support capped, while most continue to benefit from the scheme.

Light Up Energy Helps Business Reduce Costs On Energy Bills By Choosing The Right Energy Suppliers

When businesses require new contracts for commercial electricity or gas services, they have two primary options. They can approach a limited number of energy suppliers directly or enlist the specialist assistance of industry professionals, procuring improved rates and conserving valuable time.

Operating as an impartial consultancy, Light Up Energy maintains collaborative relationships with a diverse array of business electricity and commercial gas providers. We offer a transparent and professional service on business help with energy bills to aid clients in selecting the most suitable tariffs and contractual terms. Our unbiased recommendations come with a range of offers across multiple suppliers to prioritise unit pricing, standing charges, and contract stipulations.

Last but not least, Light Up Energy compares the rates of over 20 energy suppliers, enabling us to secure the most competitive deals for our clients through comprehensive market analysis and negotiation expertise.

Light Up Energy Helps Business Reduce Costs On Energy Bills By Choosing The Right Energy Suppliers

FAQs about Business Help With Energy Bills

Are businesses getting help with energy bills? There are many questions like this that are often asked about business help with energy bills. Here are some potential FAQs for this topic:

1. Can Small Businesses Get Help with Energy Bills?

Yes, small businesses can get help with their energy bills, although there are no current government schemes specifically for this purpose. If small businesses operate from a home, it is typically considered a domestic energy customers. In such cases, the primary way to reduce energy costs is by switching to a different energy supplier with more competitive rates.

2.Are there any specialised services or consultants that cater to small and medium-sized businesses for energy bill management?

Most smaller businesses find navigating the world of energy daunting. That’s where specialist consultants come in. These firms focus exclusively on helping SMEs optimise their energy usage and identify cost-saving opportunities tailored to their needs.

At Light Up Energy, our team of experts partners with businesses to conduct energy audits, implement efficiency solutions, advise on grants/incentives, and negotiate better supply rates.

3. What are the long-term benefits for businesses that invest in energy-saving measures or solutions?

While the upfront costs may give some companies pause, implementing energy efficiency upgrades pays dividends over time. Investing in energy-saving measures or solutions not only lowers monthly energy bills but also offers several other advantages, such as enhancing sustainability efforts, improving brand reputation, and fostering a healthier work environment.

The solutions from Light Up Energy can future-proof operations against rising utility costs, decrease carbon footprint, and qualify for tax credits and other incentives. For many, these long-term gains quickly offset the initial expenditure.

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Light Up Energy, founded by hospitality experts with 20+ years of experience, helps businesses save money via innovative energy management strategies.

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