Should I Fix My Business Energy Bills?
Energy prices… It feels like that’s all we’re talking about at the minute, but there’s good reason for it. With rising costs and the uncertainty that they’re going to increase even further, we want to give you the best advice possible so you don’t fall behind on your payments.
What is energy price volatility?
Levels of supply can decrease and increase throughout the year. When energy demand is higher than the amount available, it causes price fluctuations, and this is what causes the volatile changes in energy prices.
Why do energy prices increase?
Several factors will cause energy prices to rise:
Supply and demand issues
When demand increases for energy needs but there is a lack of supply, it means that the wholesale price of energy will rise. This is because the energy provider will have to pay more for the energy to start with and those additional costs will be added to the bill of the consumer.
World events will cause energy costs to rise as supply and demand issues can occur. As mentioned above once demand outweighs supply energy companies raise the prices of their gas and electricity to prevent losses.
Why are energy prices so high in the UK?
The rise in energy is high everywhere but why is it particularly higher in the UK than elsewhere? The UK has had the same issues as everyone else in the world but has also been met with its issues:
Lack of government support
Government support is key to ensuring that businesses and households can pay for their energy bills, should world events occur that impact the cost of energy bills. Without proper government support businesses will struggle to pay bills when global issues occur. It isn’t just a deduction in the price of energy or a lack of support that can provide a positive impact for businesses, as government support can come in other ways. Governments tend to have the ability to prevent energy suppliers from increasing their prices too much, which prevents businesses from struggling to pay, as prices aren’t allowed to be raised.
Energy market issues
The way the UK energy market was originally set up means that when the wholesale prices of energy increased, smaller energy companies couldn’t cope. Sadly, when energy suppliers go bust it’s the consumer who has to foot the bill.
Will energy prices go down in 2024?
We aren’t in a position to predict the increase or decrease of your business energy bills for 2024. However, with the current Energy Bill Relief Scheme being replaced by the Energy Bills Discount Scheme your bills will likely increase.
Should I fix my business energy prices until 2024?
When you go to agree your next contract you need to consider whether a variable or fixed rate is the right choice for your business. The likelihood is that energy costs, especially in the UK, will continue to fluctuate. If that is the case then a fixed rate would be the go-to choice for most businesses. Fixing your contract will ensure that your rates stay as they currently are, and as energy costs have gone down more recently, it’s worth fixing your rates before they have the potential to rise later on in the year. You can find more information on fixed business energy deals here. Not fixing your business energy deal will make you susceptible to global changes, and this provides less security for businesses.
Ready to secure a new business energy deal?
If you’re a money-savvy business looking to make some easy savings then change to competitive rates, get in touch. All you need is a recent business gas, electricity or water bill, then our team can handle the rest, providing you with all of the information you need to make an informed decision.
Call our business energy experts today on 0800 464 0991 or fill in the form on this page to get started and learn more.