The biggest news of the year – Energy Bill Relief Scheme!
Did you hear an announcement of an energy bill relief scheme — something about supporting businesses on their energy bills? If not, keep reading to know if you are eligible for the program and how much discount you can get.
About 77% of businesses were about to drown due to rising energy costs. The government helped businesses during the pandemic through Covid energy bill relief. Similarly, to deal with such an alarming situation, the Uk government took the initiative to protect non-domestic energy users from the cliff edge. The energy bill relief scheme helped those businesses which were causing economic downturns in the UK.
Like all other schemes, this relief program has some rules and eligibility criteria. Let’s know the eligibility criteria for the EBRS.
All non-domestic energy users and Uk businesses, charities, and public organizations are eligible for the scheme. The EBRS applies to the fixed (that signed their contracts on or after 1 December 2021), deemed, variable, and flexible tariffs and contracts. It offers a discount rate for fixed and default/variable contracts. The discount applies to the wholesale prices of electricity and gas. Suppliers will add reductions to the energy bills, so businesses don’t need to apply for the energy bill relief program.
It will be forced for the first six months, beginning on 1 October 22 and ending on 31 March 2023.
The reduction will be applied to each unit cost of electricity and gas. Non-domestic customers with a fixed contract will get 21.1p/KWH and 7.5p/KWH of discounts for electricity and gas respectively. To get an idea of how much discount will be given to the businesses per megawatt hour, see the table given below.
|Type of contract||Expected Energy Prices per unit (MWH)|
The energy bill relief scheme explained that the reduction given to the customers varies due to the type of contract and tariff.
Fixed Contracts: For a fixed-term contract, the discount will account the date of signing the contract and the variation in the amount of wholesale price and subsidized price by the government. For example, if a medium-sized business signed a contract in August (after December 1, 2022). It uses around 200MWH of electricity and 1600MWH of gas every month, and the monthly bill costs approximately £560,000. In August, the wholesale price of energy was more than the government-supported price, so this medium-sized business is eligible for the discount. The discounted prices per MWH will be £211 for electricity and £75 for gas.
In such cases, variation in wholesale price and government-supported price per MWH is found at £360 and £90 for electricity and gas, respectively. Therefore, the bill is reduced by over 35% and is now £215,000.
You can also calculate the discount on the energy bill by finding the difference in the wholesale price and government-supported price and enjoy the benefit of the energy bill relief scheme in the UK.
Default/Variable Contracts: The discount will represent the difference between the government-supported price and the applicable wholesale price for variable and all other contracts. For example, a medium-sized business uses around 350 kWh of electricity and 400 kWh of gas every month. It receives a bill costing approximately £3600 each month. The government-supported prices for variable rates per megawatt hour are £345 for electricity and £91 for gas. Therefore, the bill will be reduced by over 40%.
As this scheme is for few months only so signing a fix rate contract is still a best option as being a business owner it provide the fixed rate and cost of energy .If you choose a variable contract, you will get a maximum discount on the energy bill. But variable rates are comparatively higher, so the government has allowed the business to move to fixed rates. After renewal, your energy providers will instantly apply the reduction on your energy bills. There is no requirement to enrol or take action to get the discount.
To sign a new contract, you can contact us. We will help you choose the right energy supplier. Get a quote or contact the experts of Beta energy Direct.
EBRS is announced to help businesses and other non-domestic customers with their energy costs this winter. Up to 50% discount on business electricity and gas is available to the customers. Because electricity is more expensive than gas, therefore the discount applied is different. Likewise, there are different discounted rates for fixed-term and default/variable contracts. For example, for fixed contracts, the reduction per megawatt hour is £211 for electricity and £75 for gas. For default/variable contracts, the discount per megawatt hour is £345 for electricity and £91 for gas.
No, it is not necessary to call your energy supplier before making a switch under EBRS. All you need to do is to check the date when your contract started. And confirm that you are eligible for the support. The scheme supports all those non-domestic consumers with default/variable contracts. The condition applies to non-domestic customers with a fixed-term contract. Those customers who signed the fixed contract on or after 1 December 2022 are eligible for the support. Whereas non-domestic energy consumers who entered a fixed-rate contract before December 1, 2021, have not been exposed to fluctuating wholesale costs and are therefore ineligible for help.
The scheme is assisting businesses to cope with increased energy prices this winter. In three months, the government is likely to reconsider the program. This reconsideration will reflect if the program is helping the businesses. It will also define the ways how the government would continue the program. The energy crisis will not end in the next six months, so non-domestic customers will still need the support. The government will announce the next plan of support after the assessment.
To know if you are eligible to receive support from the Government’s Energy Bill Relief Scheme, you must be a non-domestic energy customer. Then check the type of contract and tariff. Confirm the date when you signed your business energy contract. If you signed a fixed-term contract on or after 1 December 2021, you are eligible for the support. Contrary to it, all default/variable contract customers are eligible for the support.
Renewal of business energy contracts under EBRS does not take any extra time. Call your energy supplier, and your energy supplier will renew your contract.