The UK energy crisis has affected everyone in the country, and businesses are not immune. No wonder, the UK energy crisis is hitting the headlines. And this is happening for a lot of reasons. So how is the energy crisis impacting UK businesses? Besides rapidly increasing inflation, the sharp increase in energy prices is having a huge impact on the operations of most businesses and the cost of living for most people.
Remember that it is not just the large businesses that are being affected by this energy crisis. The country’s micro businesses that contribute to at least 95% of the business sector are also experiencing high business energy bills, which can cause a lot of problems for their bottom line. This article discusses the UK energy crisis.
A staggering rise in the wholesale natural gas cost has a significant impact on the UK energy market. There are various factors that are driving this increase. The increase in global demand and supply problems from Russia associated with the Ukrainian conflict has led to the rise in energy costs that have caused several energy suppliers to close their businesses.
This is because these energy providers failed to pass on the rise in energy costs to most of their consumers they had locked in on fixed-rate tariffs or who were protected by the price cap. Meanwhile, the rest of the energy providers may gradually be passing the rise in costs to their domestic consumers.
Keep in mind that businesses are also affected by the energy crisis in the same way as domestic customers. This means that they can be paying more cash for their business energy bills. The problem for businesses is that they don’t have a lot of protection compared to domestic energy consumers. Simply put, the energy price cap doesn’t apply to businesses in the UK, regardless of their size.
A business energy contract is often longer than a domestic energy contract, potentially lasting at least five years. Therefore, at the moment, there are some businesses that have current energy contracts that are protected from increasing energy prices. But there will be many other businesses that have to renew their business energy this year, while others will be on variable-rate energy tariffs that are already experiencing an increase in their energy bills.
As explained earlier, some energy suppliers are closing their businesses. Therefore, when your energy supplier goes bust, you just need to wait until someone contacts you. The Ofgem recommends that you need to take a meter reading to ensure that you have an updated energy usage. But if you fail to take the meter reading, then you have to contact Citizens Advice, Advice Direct, or Advice NI.
You can also wait until Ofgem finds a new energy supplier instead of switching to another energy supplier or cancelling your direct debit. When you have a new energy supplier, then they may place you on a deemed energy contract. This can be more expensive than the contracted tariff. Therefore, you can decide to sign a new energy contract with the new energy supplier or look for a better energy deal elsewhere.
It’s worth mentioning that your energy supply cannot be disconnected when your energy supplier closes its business. And, if an administrator is appointed to take over your energy supplier, then you can choose to switch to a different energy supplier at any time. But, you should note that there is no guarantee that your credit may be carried over to another energy supplier. This is because the Ofgem Safety Net doesn’t protect business credit balances. When it comes to your business energy debts, whether or not you have to pay these off can depend on the switching terms as determined by the administrator.
To manage the costs of the energy crisis in the UK, there are specific steps you can take to lower your business energy bills. There is a chance that you may receive higher energy bills over time, but it’s still crucial to ensure that you are being billed accurately. This is especially true if the energy provider is only estimating the energy consumption rather than basing the bill on accurate meter readings.
Micro businesses also need to know their rights concerning their business energy bills. They cannot back bills, meaning they cannot charge for energy that your energy supplier failed to bill you for. In most cases, a micro-business cannot be back billed for any energy utilised more than twelve months ago.
The best way you can lower your business energy consumption is by ensuring that your company is more energy efficient. Therefore, you need to switch off electrical devices overnight, switch to LED lights, monitor your heating, and check your insulation.
Also, you should check whether or not your business is eligible for energy grants. There are several ways available that can assist you to cover some of the energy bills of your business. This can include supplier incentives that are intended to help your business to be more energy efficient. There are also local councils and government schemes that are designed to assist small businesses.
You can also choose to switch your business energy suppliers. Business energy prices are rising, but this doesn’t mean that you cannot find a better business energy deal out there when you decide to switch energy suppliers. It’s a good idea to contact a business energy broker so that they can assist you in finding the right business energy tariff for your business.
That said, there are several steps you can take if you can’t pay your business energy bills. If you currently owe your business energy provider and cannot make payments, it’s crucial to take immediate steps so that they may not disconnect your energy supply.
You can decide to contact the Citizens Advice so that you can get advice about the best way to resolve your problems. Alternatively, you can choose to call Money Advice Trust for further assistance with your business debts.
And, if you receive a business energy bill that is unaffordable, you may have to agree with your energy supplier on the payment plan. This can involve requesting your energy supplier for more time or reduction to pay off your business energy bill.
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