As election fever sweeps the country, the Tory party have pledged an interesting energy cap promise for consumers. The proposed cap is thought to benefit households by putting a cap on energy bills, but how will this affect businesses?
Business energy prices skyrocketing
Energy bills are one of the top ongoing costs for businesses, so it makes sense to get the best deal and ensure these are as low as possible. However, according to latest analysis, electricity costs for SMEs in particular have already increased by 43% in the last 7 years. The belief is that any caps for consumers might result in even more crippling costs for businesses.
The logic behind this is that the Tory energy cap could limit competition in the commercial sector, which would have the knock-on effect of leading to higher prices for businesses. With other things like business rates increasing and economic uncertainty following Brexit, any increases as a result of this cap could seriously damage a number of SMEs and, in turn, the economy.
In addition, by introducing a cap on the domestic market, with energy intensive industries exempt from policy costs, there leaves little room for energy companies to recover the costs. It’s thought that this means the small business sector will be left to foot the bill to make up the gap.
Reducing energy costs
Energy owner Centrica and supplier E.on have both already said that reduced competition in the energy markets could lead to higher prices. So how can businesses protect themselves against the possibility of ballooning energy costs?
In all honesty there probably isn’t a perfect safeguarding solution, however businesses can be taking steps right now to ensure they aren’t majorly affected, should the energy cap be pushed through parliament after June 8th.
For instance, businesses should carry out or arrange an audit of their current energy usage, tariff and performance. This will enable decisions to be made as to how costs can be saved imminently, before any cap is introduced. It could be a case of switching to a more competitive tariff, installing smart meters, upgrading technology or even recovering overcharges which could get you saving.
Another great way to reduce energy costs is to involve and educate staff on the process. From asking staff to ensure all equipment is powered down to the benefits of switching off lights and sockets that aren’t in use, you could end up making real savings just by asking staff to take part. Incentivising is also an option – for example offering a treat to the biggest energy savers will promote competition and keep costs down – as long as your treat costs less than the savings made!
For a free energy audit, or for more information on how your business could save money on energy, please get in touch.