Introduction
Businesses across the UK are feeling the pinch of rising energy prices. Recent insights from Cornwall Insight show that these costs aren’t just a temporary spike—they’re expected to stay high for the foreseeable future.
Check out the forecast here: https:/www.cornwall-insight.com/press-and-media/press-release/business-energy-bills-forecast-to-stay-70-above-pre-crisis-rates
If you run a pub, restaurant, or local shop, you might be paying over £5,000 more each year for energy than you did before the energy crisis. And unfortunately, these numbers are set to increase even further between April 2025 and March 2026.
But don’t worry—this doesn’t mean there’s nothing you can do. Let’s break down what’s happening with energy prices, how it affects your business, and practical steps you can take to manage these costs.
What’s Happening with Energy Prices?
- Big Jump in Costs: According to Cornwall Insight’s Business Energy Cost Forecast, by April 2025, the average small business using about 50,000 kWh a year could see annual electricity bills around £13,264. That’s a 70% increase compared to bills of £7,000 to £8,000 back in 2020–2021.
- Prices Staying High: Even though energy prices have calmed down a bit since their peak in 2022–2023 (when bills could top £20,000), they’re still much higher than they used to be. It’s unlikely they’ll drop back to pre-crisis levels anytime soon.
- Global Factors at Play: Events around the world—like ongoing effects from the energy crisis and tensions involving countries like Russia—are pushing up wholesale energy prices. This means higher costs for everyone.
Why Are Energy Prices Rising?
1. Global Market Uncertainty
- World Events Affect Prices: Conflicts and political issues in countries that produce a lot of energy can disrupt supply and make prices go up. For example, problems involving major gas suppliers can cause uncertainty, leading to higher prices.
- Supply and Demand: When big energy producers decide to pump out less oil or gas, there’s less available, so prices go up. Groups like OPEC can influence these decisions, affecting costs worldwide.
2. Less Protection for Businesses
- No Energy Price Cap: Unlike households, businesses don’t have a cap on energy prices to protect them from sudden increases. This means businesses feel the full impact when wholesale prices go up.
- Limited Help from the Government: While there have been support schemes for households during the cost-of-living crisis, businesses haven’t received the same level of assistance.
3. Day-to-Day Challenges
- Higher Standing Charges: Fixed costs, like the daily charge just for having an energy supply, have gone up. These are costs you pay regardless of how much energy you use. These increases have led to the Federation of Small Businesses calling on Ofgem to address the escalating standing charges.
- Unpredictable Market: Even small events—like a storm affecting a pipeline—can cause energy prices to fluctuate. This makes it hard to plan for the future.
4. Moving Towards Green Energy
- Costs of Change: Switching to renewable energy sources requires big investments in things like wind farms and solar panels. These costs could be passed on to consumers. However, in the future they may lead to significant savings. If you want to learn more, read this BBC article.
- New Regulations: Energy companies have to meet stricter environmental rules, which can increase their costs and, in turn, the prices they charge.
How Does Rising Energy Prices Impact Your Business?
- Financial Strain: Higher energy bills mean less money for other important things, like paying staff or investing in your business.
- Tough Choices: You might have to raise prices for your customers to cover the increased costs, which could affect your competitiveness.
- Delaying Plans: Plans to expand or improve your business might need to be put on hold because of the extra expenses.
- Operational Changes: You may need to adjust your business hours or find other ways to cut energy use, which could impact your service.
What Can You Do to Manage Energy Costs?
1. Improve Energy Efficiency
- Energy Check-Up: Conduct an energy audit to see where you’re using the most energy and find ways to cut back.
- Upgrade Equipment: Investing in energy-efficient appliances and machinery can save money in the long run.
- Improve Your Building: Better insulation, energy-efficient lighting, and smart thermostats can reduce energy consumption.
- Encourage Good Habits: Get your team on board with simple actions like turning off lights and equipment when not in use.
2. Consider Renewable Energy
- Generate Your Own Power: Installing solar panels or small wind turbines can reduce your reliance on the grid.
- Store Energy: Battery systems can store energy generated on-site for use when you need it.
3. Shop Smart for Energy Prices
- Fixed-Rate Plans: Locking in your energy prices with a fixed-rate contract can protect you from market ups and downs.
- Seasonal Pricing: Energy prices can be lower during the summer and early autumn months due to decreased demand. Securing energy contracts during these periods can result in better rates for your business.
4. Look for Financial Help
- Government Schemes: There are grants and subsidies available for businesses that invest in energy efficiency or renewable energy.
- Favourable Financing: Some banks offer loans or leasing options specifically for energy improvements.
- Energy Service Companies: These companies can help you make energy-saving upgrades and get paid back through the savings you make.
5. Use Technology to Your Advantage
- Monitor Usage: Energy management systems can show you exactly where and when you’re using energy, helping you identify areas to cut back.
- Automate Controls: Smart systems can adjust heating, cooling, and lighting automatically, so you’re not wasting energy.
- Set Goals: Establish clear targets for reducing energy use and keep track of your progress.
6. Get Expert Advice To Get Good Energy Prices
- Consult Professionals: Energy consultants can provide tailored advice to help you reduce consumption and costs.
- Stay Updated: Keep an eye on new technologies and market trends that could offer additional savings.
To find out more, check out our full guide here:
Conclusion
Rising energy costs are a significant challenge, but they also present an opportunity to make positive changes. By taking steps to improve energy efficiency, exploring renewable options, and advocating for supportive policies, you can help manage these costs and contribute to a more sustainable future.
Not only can these actions save you money, but they can also enhance your reputation with customers who value environmental responsibility. In today’s market, showing that you’re committed to sustainability can set you apart from the competition.
Next Steps for Your Business
- Check Your Energy Use: Start by looking at how and when you’re using energy to find the biggest opportunities for savings.
- Make a Plan: Set clear, achievable goals for reducing energy consumption, both in the short term and long term.
- Get Help: Don’t hesitate to reach out to energy experts who can offer personalised advice.
- Educate Your Team: Make sure your employees understand the importance of saving energy and how they can help.
- Track Progress: Keep an eye on your energy bills and usage to see how your efforts are paying off.
- Stay Informed: Keep up with new developments in energy technology and policy that could benefit your business.
By taking these steps, you’ll be better equipped to handle rising energy costs and set your business up for success in the long run. Embracing energy efficiency isn’t just good for your bottom line—it’s good for the planet, too.
How Invew Can Help
At Invew, we understand that rising energy costs can be a real challenge for your business. As an experienced energy broker, we’re here to make managing your energy needs more straightforward and more affordable. Here’s how we can assist you:
- Tailored Energy Deals: We search across a wide range of suppliers to find energy contracts that fit your specific needs and budget. By comparing options, we help you secure competitive rates so you’re not paying more than you have to.
- Expert Market Insights: Our team keeps a close eye on energy price trends, including seasonal dips during summer and early autumn. We’ll advise you on the best times to lock in contracts to take advantage of lower prices.
- Hassle-Free Contract Management: We handle all the complexities of energy contracts for you—from negotiation to renewal. This frees up your time to focus on running your business while we ensure you’re getting the best terms.
- Clear and Honest Advice: We provide straightforward, unbiased information about your energy options, helping you make informed decisions without any hidden surprises.
- Ongoing Support: The energy market can change quickly. We’ll keep you updated on new opportunities to save money and adjust your energy plan as needed.
By partnering with Invew, you gain a trusted ally dedicated to helping you navigate rising energy costs. Let us take the stress out of managing your energy needs so you can focus on what matters most—your business.
Check out this client testimonial:
Acknowledgements:
The insights and data in this article are based on information from Cornwall Insight, a respected energy research and consulting firm. Their Business Energy Cost Forecast sheds light on the trends affecting energy prices for UK businesses.
