The cost of utilities continues to be the most commonly cited cause of rising cost pressures, according to the Federation of Small Businesses. With the Energy Bill Discount Scheme (EBDS) ending in March 2024, how can businesses keep control of their energy costs?
What is the EBDS?
The EBDS is a business energy support scheme provided by the government. The scheme, which replaced the Energy Bill Relief Scheme in 2023, was designed to help those struggling with rising energy prices. Energy suppliers automatically applied reductions to the bills of all eligible non-domestic customers, offering businesses welcome relief on their energy bills. The scheme is due to end in March 2024. It is not currently unknown whether there will be further support or relief for businesses, making it important that business owners review their current contracts and practices ASAP – before the scheme ends.
Could the end of the EBDS impact my business?
We firmly recommend that businesses review their tariffs and energy use as the EBDS ends.
The impact of the end of the EBDS will vary depending on several factors, including the business’s size and type, its industry sector, and its energy consumption habits. However, many businesses are likely to see their energy bills increase significantly after the scheme ends. Impacts could include:
- Increased energy costs could reduce profit margins and impact cash flow.
- Businesses may need to increase the costs of goods and services to cover price increases.
- Providers may continue to collect monthly tariffs at current rates, potentially resulting in underpayments when the discount is no longer in play.
- The Federation of Small Businesses has raised concerns about the impact of rising standing charges (a fixed daily fee you have to pay for energy, no matter how much you use). Reducing overall energy costs and reviewing tariffs is a good way to minimise the impact of these costs.
Aren’t energy prices set to fall in 2024?
Escalating wholesale market volatility, triggered by geopolitical factors, combined to drive up energy unit prices in January 2024. Despite a negative impact on consumer prices, research suggests that business costs have reduced and stabilised since last year. However, as the last few years have taught us, the market is volatile, making it hard to predict what will happen next. It is unlikely that prices will fall below the pre-”fuel crisis” levels. Whatever happens next with energy prices, the end of the EBDS will result in many businesses seeing a rise in their energy bills.
How can I prepare for the end of the EBDS?
Businesses can lessen the impact of the end of the EBDS, by taking some simple steps:
Ditch and switch (shop around!)
As consumers, we’ve all got used to shopping around, but do business owners apply the same bargain-hunting approach to business costs? Businesses should compare energy prices from a range of different suppliers. If your rate isn’t the best available, then make sure you ditch and switch. If you haven’t got the time, then speak to the experts, who can review your usage and find the best deal.
Consider fixing energy prices
Fixing your energy prices can give you a sense of financial security, help you with forecasting and cash flow, and remove the impact of unexpected price spikes. Nevertheless, before making a decision, it’s important to weigh up the pros and cons.
Review energy consumption
Businesses must review their energy consumption patterns. This will help to identify where savings could be made by implementing energy efficiency measures.
My fixed energy tariff is ending, is now a good time to switch?
Since Autumn 2022, business energy rates have dropped by significantly. If you opted to fix your rate when costs were higher, you may benefit from switching to a new contract when your fixed rate ends. Start by assessing your current and future energy needs, check your contract terms, and compare both fixed and flexible rates from a range of providers. Better still, get our energy team to do the legwork for you, enabling you to benefit from lower costs without it costing you any time or money.
Why should I outsource energy procurement?
Business owners can avoid the headache of finding an affordable rate, managing the process and sorting the admin by handing the process to a reliable third party.
Armed with information about your current rates and usage, the energy team can negotiate favourable rates with energy suppliers and reduce your energy bills by up to 75%.
Managing energy contracts and staying on top of market fluctuations can be time-consuming. Our process is simple. Simply let us know basic tariff and usage information (a bill and/or contract will do!) and we handle the entire process, making sure you have a hassle-free experience.
Get expert input
Our Energy Specialists are highly trained professionals with in-depth knowledge of the latest trends, regulations, and pricing structures. We regularly come across clients who thought they had a good deal, only to find that they could save more with the right guidance.
Improve your ESG
Our Energy Specialists can guide you towards renewable energy options, helping you reduce your carbon footprint and contribute to a cleaner, greener future.
Ready to save on your energy bills? Speak to our team of Energy Specialists. Our service is free of charge and we are confident we can help your business to save money.