News

July 05, 2011

Small firms warned to prepare for rise in energy costs

Small businesses have been warned to prepare for a hike in their energy bills following a rise in the cost of wholesale gas and electricity.

Over the last year, the cost of generating electricity for businesses has gone up by 35 per cent, according to figures released by commercial energy consultant Power Solutions. The wholesale gas price has risen by the identical amount over the same period, the figures revealed.

Power Solutions has estimated that an office-based firm with 30 employees can expect an increase of as much as £1,400 in its gas bill and £4,500 in its electricity bill when its contracts next come up for renewal. British Gas owner Centrica has already indicated that it will raise prices.

“Energy prices are becoming one of the key issues for small and medium-sized enterprises as the additional costs are directly hitting the bottom line,” said Power Solutions managing director Jeremy Taylor. “Business owners really need to take action to help manage these costs.”

The research also suggested that the UK’s small and medium-sized businesses could be spending over £700 million more than they should for energy. As many as one in four businesses either have no contract in place or have been rolled into a new contract by their energy providers, exposing them to higher prices.

Power Solutions sales manager Mark Hallows pointed out that with up to 16 energy suppliers for commercial customers, it pays to look around. “What a lot of small businesses tend to do is go with the options given by their current supplier. But it can be quite painless to switch at the end of a contract,” he said.

The Carbon Trust website has energy saving advice for small businesses by sector. Key tips include switching equipment off when not in use and using heating controls to regulate heating in different parts of premises. Hallows advised businesses to switch to LED lighting which, he said, could reduce lighting costs by 80 per cent.

Energy regulator Ofgem also advised businesses to check the terms and conditions of their energy contracts and to shop around for better deals.

• Thousands of small firms hit with backdated energy bills