How is business energy different to domestic energy?
21st September 2022
There’s a big difference between energy for businesses and the energy you use at home.
Most of the time, news stories relating to energy will only talk about how it affects households.
To understand how changes to the energy market will affect your business, first get a better understanding of the key differences between business and household ('domestic') energy supplies.
- Different environmental taxes and levies
- Different and more complex contract types
- No consumer discounts or price cap protection
Different non energy costs
Only part of the price you pay for energy goes towards the electricity or gas you use. A large portion is for ‘non energy costs’.
Businesses have different costs to pay, including levies to support the UK’s move to greener energy and more sustainable ways of living.
Different contract types
Because businesses can have hugely different energy needs – imagine a single-site office open nine to five, versus a chain of factories that use electricity 24/7 - there’s no one contract type.
Businesses can choose to buy their energy in bulk, locking them into long-term contracts. They can also choose to manage their non-energy costs in a variety of ways. They might fix these costs, or let some, or all, rise and fall with the market.
The energy price cap
There’s been a lot of discussion over the last few months about the energy price cap increasing.
In ordinary times, the price cap (put in place by Government) puts a ceiling on what consumers can be charged for their energy.
The cap is set by Ofgem based on its assessment of the costs a notional ‘efficient’ supplier would incur in supplying energy to a domestic consumer. It intends to protect household consumers from being overcharged.
On 8th September, the Government announced a new Energy Price Guarantee. This will work like a price cap, limiting what households will pay for their energy. While the full details are still pending, the Energy Price Guarantee will be in place for six months from 1st October 2022 for domestic consumers only.
Energy support for businesses
The Government has announced the Energy Bill Relief Scheme, where UK businesses will receive a six-month support package to tackle rising energy costs.
You can read the full Government announcement here. We’re waiting on further information from the Government before fully implementing this and communicating when it will be applied to customer bills. Customers do not need to do anything as the support will be applied automatically to their bills.
In the meantime, we’re continuing to look at ways we can support our customers. Find out more on our Energy Crisis Support page.
Should you be on a business energy supply?
Opus Energy only supplies businesses, so please get in touch or contact a domestic supplier if you think you’re on the wrong type of energy supply contract.
Find out how Opus Energy is supporting business customers through the energy crisis.Energy crisis support
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