The Price Cap may be reducing for consumers but will it impact businesses?

The Price Cap, introduced in 2019 by the regulator Ofgem (see blog here), was designed to keep a lid on consumers’ energy bills but this does nothing for businesses who still have to trawl the market to find a deal that is best for them.

In recent years, the media has often reported the Price Cap charges and talked about the increases or decreases that have been prescribed by Ofgem. However, very little is often said about how businesses don’t tend to see as much benefit, because their pricing isn’t protected by the consumer powers Ofgem have.

We’ve seen a number of astronomical bills over the past few years as wholesale prices have increased due to factors including the Ukraine/Russia conflict and high demand from China. For many, the certainty of pricing per kWh means that fixed term contracts become the only option in order to have some control.

On any set of financial accounts, the energy bills are a significant number. If you have a fixed contract you are probably dreading the next round of negotiations which will inevitably leave you feeling you’re in a no-win situation.

But what if there was a way to turn this line of negative numbers into something on the other side of the balance sheet…and without much effort at all?

This is the clever bit for your business – large or small. Installing and optimising your own energy generation (and by this we simply mean installing solar panels and/or getting battery storage) enables you to move some of the liabilities into the assets and revenue column on your books.

The initial investment in solar panels and battery storage solutions has reduced significantly due to falling costs of the equipment and greater supply and competition. In addition, wholesale energy costs are still rising which means the payback period has shortened considerably.

Banks confidently see these types of investments in your business as low risk. For example, the Bank of Wales’ recent annual results show that in invested £3.3 million from the new Green Business Loan Scheme to support 18 businesses undertaking energy efficiency and decarbonisation projects (see Jaga Brothers here).

For smart businesses, there’s also an extra level that Tewdric Energy has found (and offers). With energy management and optimisation, you also gain from lower costs when you need to use it.  We’re working with a community of businesses that are leveraging better tariffs and have a lower carbon footprint too.

Follow us for more