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Power struggle: keeping the lights on this winter

As their energy bill lands on the metaphorical mat, householders across the UK are scratching their heads in disbelief. Bills have soared by an average 54% – but, of course, it’s not just domestic users that are affected. Businesses, too, are bearing the brunt. And, unlike consumers, they are not protected by a price cap.

According to energy market analysts’ Cornwall Insight’s Dr Craig Lowrey, UK firms are highly exposed to continued market volatility in the energy sector.

He said: “It is clear that businesses are struggling with the impacts of rising energy costs with consequences for employment and the economy, not to mention the prospect of rising costs for customers.

“We are already seeing companies closing sites due to higher energy bills, and there is a risk that a cost of living crisis could quickly expand to a ‘cost of doing business’ crisis, particularly for energy intensive customers.”

So what can you do?

First up, if you haven’t switched energy supplier for a while, it’s likely that you are already paying over the odds. Chances are that, if this is the case, you are out of contract and so able to switch to a new supplier on better terms. Check recent bills and compare your tariff with others on the market via a price comparison website.

Bionic, which works with SMEs to help them get the best deals on energy, insurance, telecoms and finance, said it helps to think about how and when your business is using gas and electricity. It advises you to:

  • assess when you’re heating your premises.
  • switch appliances off.
  • install a smart meter.
  • be mindful of water costs.
  • turn off lights when not in use or fit light sensors.
  • encourage all staff to be energy-aware.
  • draught-proof your building.
  • request an energy audit – contact your energy supplier for details.

Bionic advises: “When switching, you’ll need to bear in mind that the rates you’re offered will depend on things like the amount of energy you use, the location of your business premises, and whether or not your business is in good financial shape: a poor credit score could see you paying higher rates, as your business is seen as a higher risk.”

Cornwall Insight’s Lowrey makes the point that using energy more efficiently would reduce demand this winter and ease spiralling prices for both households and businesses. He said: “Fresh measures to improve energy efficiency and better manage consumption are a viable approach and will directly reduce customers’ bills. A similar approach could be applied for business customers but there is always the option of additional financial support or other measures to support investment to underpin new efficiency measures.”

When looking at your supplier, remember that business energy suppliers don’t offer the dual fuel deals many consumers enjoy, so even if you agree to a gas and electricity deal with the same supplier these will still be two separate energy contracts.

If your business has been affected by increasing fuel costs, and you’re facing difficult choices, our business rescue and insolvency experts can help to find a solution to your challenges. Call us on 01455 555 444 or email [email protected] and we will call you back.