Business Energy Price Cap Explained

Understanding the business energy price cap is essential for managing your business’s energy expenses effectively. Our guide will break down what the price cap is, how it works, and its impact on your energy bills, so you can make informed decisions to help you save on energy costs. 

Unlike domestic customers, business energy customers do not have a price cap. Previously, business owners were able to access support paying their energy bills through schemes such as the Energy Bill Relief Scheme, but this is no longer available. 

An energy price cap is a limit set by Ofgem on the amount customers can be charged for their energy, with caps for both unit costs and standing charges for gas and electricity. It was first introduced in January 2019 to protect energy customers from soaring prices. The price cap is reviewed and may be adjusted every three months.  

Due to the complexity of business energy contracts, introducing a business energy price cap would be very difficult to do. This is because businesses vary significantly in size, industry, and energy usage, making it challenging to implement a one-size-fits-all cap – whereas domestic customers all tend to use energy in similar ways. 

Currently, there is no business energy price cap. 

In the past, the government has introduced assistance schemes such as the Energy Bills Discount Scheme, which offered discounted unit rates for eligible business energy contracts. However, this scheme is no longer in place. 

Although the energy price cap does not directly affect businesses, there are still broader energy market conditions that affect the domestic price cap, that also indirectly affect businesses: 

• Market Prices: When wholesale energy prices rise, they tend to affect both domestic and business customers. Businesses may see their energy costs increase, although the exact impact depends on the specifics of their contracts. 

• Operational Costs: If energy prices are high, businesses that have significant energy consumption may face increased operational costs. This can affect their profitability and pricing strategies for goods and services. 

• Economic Environment: Broader economic effects, such as inflation driven by high energy costs, can also affect businesses in various ways, including increased costs for materials, transportation, and other operational expenses. 

There are many reasons why a business may want to switch energy suppliers, for example, to get better rates, added extras or more support.  

Similarly to the price cap, the rules for switching suppliers are slightly different for businesses than they are for domestic customers. If you want to change suppliers, you will need to carry out careful research into the types of commercial energy contracts available so you can find one that suits your business.  

To find out if switching suppliers could save you money on your energy bills, try our Energy HealthCheck tool for free. Just pop in some details about your business and we’ll compare data from similar businesses all over the country, so you can find out if you’re overpaying for your energy.  

Although there is no business energy price cap in place, you can still take advantage of things like business grants to help you manage your energy bills. 

Some business grants can help with things such as paying your energy bills during the cost-of-living crisis, whereas others are designed to support the implementation of new initiatives for energy efficiency and business development.  

An effective way to reduce your energy bills is to tackle your consumption. Start by looking at your operations, from heating and lighting to powering equipment and facilities. A great way of gaining a deeper insight into your energy habits is by carrying out a business energy audit. This will help you to identify areas where improvements and savings can be made. 

There are lots of small improvements you can make to ensure you are not over-consuming unnecessary energy. For example,  

• Keeping on top of building maintenance and repairs: Old or damaged appliances will use more energy than needed, so it is important to regularly inspect your facilities and ensure you are keeping everything in good working condition. 

• Look for energy efficiency ratings: When buying new products, appliances will be rated A-G, with products rated A and B being the most efficient options for your business.  

• Simple swaps: Such as opting for LED light bulbs over florescent ones – can reduce the amount of wasted energy caused by your lighting. 

• Energy saving guides: For more simple tips and tricks to help cut down your energy consumption and reduce your bills, check out our range of free energy saving guides, designed with businesses like yours in mind.  

If you’re looking for a specialist business energy supplier who can help you make the most of your energy, Yü Energy could be the perfect fit for you!  

Get your free quote today and find out how much you could save on your business energy bills.