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Business Energy Bills: Combat the Cost of Living Crisis

Written By Ceri Jones

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June 4, 2024

The cost of living crisis is something that’s at the forefront of everyone’s minds across the UK. And for businesses, it’s no different. It’s been challenge after challenge for UK businesses, from multiple lockdowns to geopolitical tensions impacting the energy market. 

In this article, we’ll be looking into how the cost of living crisis has impacted businesses, and how you can combat it.  

The average electricity cost for running a small UK business in 2022 ranged between £13,000 and £64,000. with many UK sectors experiencing a 50%+ increase in their bills. Even worse, bills are set to rise further thanks to standing charges continuing to increase.

Graph showing the average percentage increase of energy bills between 2021 and 2022 by sector
Statistics from UK Business Cost of Living Statistics Report 2023 | money.co.uk

Pressing Pause On Production

Energy costs have surged dramatically, with many businesses struggling to keep their operations viable. According to a survey by Make UK, 60% of manufacturers reported that out-of-control energy bills are threatening their business.

The last few years have been brutal for UK businesses, with a record 105,000 closures in the first quarter of 2023 alone.

However, it is the case for many manufacturers that they simply can no longer afford to be operational. This has forced many to take drastic measures such as reducing production hours or even halting operations during peak periods. For instance, 13% of manufacturers have cut down their hours, and 7% have stopped production altogether for extended periods.

Lowering production means less energy needed to produce goods, meaning a lower energy bill. This puts manufacturers in a position of lowering their output, just so that energy bills are affordable. 

Staff Shortages

Another way UK businesses have attempted to cope with rising energy bills is to make cuts in other areas. Unfortunately, it’s no secret that staff overheads are one of the largest expenses for business owners.  Whilst some may find they have to postpone bonuses, pay rises, and new hires, even layoffs. Other businesses find themselves with low staff retention as employees seek out higher-paying work.  

Not only does this reflect poorly on business reputation, recruitment and training processes can end up another costly strain for these already-struggling businesses. 

Inflation Rates

On top of rising energy costs, businesses are also grappling with high inflation rates, exacerbated by the Bank of England’s monetary policies. A staggering 81% of UK businesses expect energy prices to rise further within the next two years, making budget planning a near-impossible task.

Don’t Let This Delay Decarbonization!

High energy bills have delayed many businesses’ efforts to decarbonize. 37% of UK businesses reported that their energy costs have postponed their plans to reduce carbon emissions. This is despite the growing pressure to adopt more sustainable practices. 

By going solar with IEG, you can significantly reduce your reliance on the Grid and mitigate the impact of rising energy prices. Solar provides a consistent and predictable source of energy, helping you to stabilize your energy costs in the long term. What’s more, you can store your energy and use it even when the sun isn’t shining with our battery solutions

With energy prices expected to rise further, solar energy presents a cost-effective alternative. The savings you’ll make on your energy bills often offsets the initial cost of installation, meaning to significant long-term savings.

Additionally, solar energy systems can generate surplus power, which can be sold back to the grid, providing an additional revenue stream for businesses. 

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