Many small businesses have come forward since the new energy support has been announced to say that the government’s plans to slash energy subsidies will be detrimental to their business operations.
The new Energy Bill Discount scheme (EBDS) leaves around 5.5 million small businesses exposed to high energy prices with very little help.
What is the Energy Bill Discount Scheme
As of now business energy bills are under the Energy Bill Relief Scheme which adds a cap to the wholesale price of energy on bills. However, the government have said this support is far too expensive to sustain as it has been estimated to cost around £18 billion for the 6 months it was running.
Therefore, the government have announced the EBDS which still offers support to businesses but at a major reduction to the EBRS.
The EBDS will also only be applied to energy contracts once they have gone over a certain price which is outlined below:
For electricity if the wholesale portion of the bill rises There will no longer be any price caps like there were with the EBRS ad there is far less over 30.2p/kWh than a maximum of 1.96p/kWh discount.
For gas, if the wholesale price rises over 10.7p/kWh, a maximum discount of 0.697p/kWh will be applied.
To find out more about the EBDS, then continue reading here.
How is this going to affect smaller businesses?
Business groups have announced that due to this 1 in 4 small businesses could have to close, downsize, or change their operations due to the change in support.
Around 40% of small businesses and SMEs will only see a maximum of £49 relief in the year the EBDS is running.
Many businesses are reporting that the most finical pressure they are seeing at the moment is coming from energy bills.
Many businesses are already saying they don’t see much support from the current government scheme, and with a 90% reduction in support coming most businesses are going to struggle even further.
Some industry bosses have already said that support is not going to make much of a difference, they are going to have to push price increases through their customers.
Is there going to be any extra support for struggling businesses?
Small business groups were disappointed the government did not have extra support for smaller struggling businesses.
There is a higher level of support for industries that are more vulnerable to higher energy prices due to being more energy and Trade intensive (ETIIs).
To make sure these industries can remain competitive with the UK and other markets such as the EU these businesses will receive a higher level of support.
See if you are eligible for this here.
How can my business cope with high energy costs?
If your business is already struggling with energy costs, then you need to make measures to ensure that the financial pressure of energy bills is reduced.
One way you could do this is to make sure you take care of your energy bills straight away. Waiting for prices to get lower can often put your business in a worse position and you end up paying a lot more. Why not speak to one of our energy consultants today to see when the best time to sign your next energy contract would be?
Find out more ways to tackle high energy bills here.
If you're looking to save money on your energy bills then why not get in touch today? The relationships Resolve Energy has developed with over 24 of the UK’s biggest business energy suppliers allows our energy experts to source the best business energy rates available for your company right when you need them. Request a free quote today and start saving money on your energy.
