Energy bill support for businesses will be reduced from April 2023, investing in improving energy efficiency could help

The government has announced that it will scale back support for businesses with rising energy bills from April 1 2023. In its announcement, the government said it was scaling back the energy subsidies for the next financial year to £5.5bn.

Under the new scheme, firms will get a discount on wholesale prices rather than costs being capped as under the current one.

The energy support scheme is used by businesses, but also charities, and public sector organisations such as schools and hospitals which are also seeing soaring energy bills.

Heavy energy-using sectors will get a larger discount than others, but all firms will only benefit from the scheme when energy bills are high.

The new scheme will run until the end of March 2024, but a limit has been set in a bid to reduce how much taxpayers are exposed to spiralling costs.

Now businesses, and in particular SMEs, need to think of solutions to help them tackle rising costs if they are to survive. Adapting now can save businesses costs in the long run while also ensuring that the business is more future-proof and meets net zero targets. 

Chancellor Jeremy Hunt said: "My top priority is tackling the rising cost of living - something that both families and businesses are struggling with.

"That means taking difficult decisions to bring down inflation while giving as much support to families and businesses as we are able."

Bills will automatically be discounted by up to £6.97 per megawatt-hour (MWh) for gas bills and up to £19.61 per MWh for electricity bills, a statement said.

Speaking in the House of Commons on Monday, James Cartlidge, the exchequer secretary to the Treasury, explained that this worked out as roughly a £2,300 saving for a pub.

Big manufacturers who typically have much higher bills will receive a bigger discount, equivalent to about £700,000 of support over 12 months, the government added.

Investing in energy efficiency could help businesses to reduce energy costs while also reducing their carbon footprint.

Taking action to improve energy efficiency now will help protect businesses across Greater Manchester from increasingly volatile and rapidly rising energy prices, which if left unchecked could do significant harm to businesses.

Bee Net Zero partner GC Business Growth Hub has put together some guides on how to save energy in all elements of your business from lighting and heating to large-scale equipment. You can find these guides on our insights page.

To learn more about how investing in energy efficiency can help your business deal with rising energy bills and to begin your journey to net zero, contact our team for a personalised consultation.