Chancellor Kwasi Kwarteng said: “As well as helping people, we need to support the businesses who employ them. Our energy bill relief will provide immediate financial support to businesses as they recover from the pandemic. This is on top of the £1 billion we are already providing to help energy-intensive industries with the cost of energy”.
The Businesses Energy Bill Relief Scheme is designed to help businesses with the cost of their energy bills. The scheme will cover all businesses, charity organisations, hospitals and schools throughout Great Britain. After the long-debated energy bill cap has finally been announced, the government has fixed their support price at £211 per MWh for electricity and £75 per MWh for gas for six months starting this October 2022. This will help to ease the burden on businesses that have been struggling to keep up with energy costs. The scheme is an important step to boost small businesses who have been struggling to make ends meet.
How much energy bill I will save?
The relief amounts depend upon your monthly consumption and type of contract (fixed or variable). The amount of relief is the difference between the wholesale cost of energy and the government support price (£211 or £75). Currently, the wholesale rate this winter is expected to be around £600 for electricity and £180 for gas in Great Britain.
If your monthly electricity consumption is below 10 MWh, you will save up to 35% on your energy bill.
How to claim this ‘Energy Bill Relief’?
The simple answer is you do not have to do anything. There is no extra step in the claim process that helps save time, resources, efforts and additional costs. This relief will be passed onto businesses by way of reducing energy bills directly, an upfront discount. Primarily a great support to eliminate cash flow issues.
The government has also promised to review the energy prices every six months to ensure that businesses are not being overcharged.
What are the risks of Businesses Energy Bill Relief Scheme?
Whilst the majority of thought-leaders are happy with the announcement, they also stick a footnote as to their concerns that energy companies will simply put their prices up in the long term to make up for the shortfall in income. This haunts more to the businesses who have variable contracts with the company as fixed price contracts may not be affected when compared.
The hospitality industry in particular has been struggling with energy costs, as energy is one of their biggest overheads. The energy bill relief scheme will help hospitality businesses to stay afloat and keep energy prices down for consumers.
If you are a business owner, it is important to check if you are eligible for the scheme. You can do this by contacting your energy provider or by visiting the government website. The Businesses Energy Bill Relief Scheme is a welcome relief for many businesses and will help to ease the burden of energy costs.