Energy support for businesses is changing – what does it mean for you?

The Government has confirmed their new ‘Energy Bills Discount Scheme’, which has different features to the support originally offered in 2022. Here’s what the new package involves, and what it means for businesses like yours. 

What does the new scheme involve? 

The new scheme once again offers businesses a discount on their energy bills. However, unlike the current offering which ends 31 March 2023, the new support offers a discount on wholesale prices, rather than capping the overall cost. 

It aims to help businesses who are locked into fixed price contracts that were agreed after 1 December 2021, and provide security and reassurance against the risk of prices rising again. 

Businesses who have a contract with a licensed energy supplier will see a discount of up to £6.97/MWh on their gas bill, and up to £19.61/MWh on their electricity bill. 

To put this into context, James Cartlidge, the Exchequer Secretary to the Treasury, said this would be a saving of around £2,300 for a pub or £400 for a small shop per year. 

Do all businesses get the same support? 

All businesses who are eligible will receive support. However sectors who use more energy, referred to as ‘Energy intensive industries’ will receive a much larger discount. 

This predominantly includes the manufacturing industry, as well as those in metal, textile and glass production. You can find the full list of industries within this category here. 

These businesses will receive the discount on 70% of their energy volume, which will be capped at £40.0/MWh for gas and £89.1/MWh for electricity. The Government said this is the equivalent of around £700,000 over 12 months.

When will the support be available? 

The scheme will come into force on 1 April 2023, when the previous scheme ends, and will support all eligible businesses with their energy bills until 31 March 2024. 

Is everyone eligible?

The support is subject to a wholesale price threshold, meaning that businesses with energy costs below £107/MWh for gas and £302/MWh for electricity will unfortunately not receive support. 

What does this all mean for businesses?

The Government described the previous energy bills scheme as ‘unsustainably expensive’, and said it was a short-term solution when costs began to rise after the recent unrest in Europe. 

While wholesale gas prices have fallen back to where they were before the unrest, they’re still much higher than average – meaning many businesses are still struggling with rising costs.

However, prices have fallen by over 40% already, and according to energy analysts Cornwall Insight the cost of gas and electricity are expected to drop even further between July and September. This prediction, paired with the new Government support scheme, will hopefully stabilise monthly payments over the next few months, and take some of the pressure off business owners. 

What can you do if you need more help with your energy bills? 

If you need help managing your energy bills, check out our tips for reducing costs and making your business more energy efficient here. You can also visit Ofgem for more tips and tricks, or Citizen Advice if you’re struggling to pay your bills. 

Alternatively, if you could do with some extra cash flow or need to pay a bill quickly, our finance options could help. You can now get a free quote without affecting your credit score, so you can assess if it’s right for you with complete peace of mind. Simply check your eligibility here to get started.