According to a report by Utility Saving Expert, small businesses in the UK could face average annual energy bills surpassing £13,264 by April 2025. This prediction, based on data from Cornwall Insight’s Business Energy Cost Forecast, indicates a staggering 70% increase from the £7,811 average before the onset of the energy crisis in 2021.
The Impact of the Energy Crisis
Chris Richards, a business energy expert at Utility Saving Expert, highlighted the significant financial burden this projected increase poses for businesses. He noted, “The absence of a price cap for businesses means that firms are completely exposed to these increases. This is creating a real financial burden, especially for those whose energy contracts renew in April.”
In contrast, households have some level of protection due to the energy price cap. Craig Lowrey, a principal consultant at Cornwall Insight, pointed out that while the cap has faced criticism, it provides a safeguard that businesses lack. He stated, “For all the criticism of the household energy price cap, it does provide a level of protection that businesses simply do not have.”
Need for Long-Term Solutions
Lowrey emphasized the importance of boosting domestic energy production as the “only way” to reduce exposure to international disruptions and achieve sustainably lower energy bills. He acknowledged that while this solution is neither quick nor easy, it is essential for ensuring long-term stability in energy costs.
Cost-Saving Recommendations for Small Businesses
In light of these rising costs, Richards offered several recommendations for small businesses to mitigate their energy expenses:
Explore Micro-Metering Systems: Implementing micro-metering can provide better insights into energy consumption and help identify areas for savings.
Review Energy Contracts: Businesses should regularly assess their energy contracts to ensure they are getting the best possible rates.
Compare Tariffs: Shopping around and comparing different energy tariffs can help businesses find more affordable options.
Conclusion
As small businesses brace for potentially crippling energy costs in the coming months, taking proactive measures to manage energy expenses will be crucial. With the absence of a protective price cap, business owners must remain vigilant and explore available options to navigate this challenging landscape effectively.
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