Even though business energy bills can be difficult to decipher, it’s in your best interest to learn your way around them. You may not know this, but your business electricity bills contain a wealth of valuable information that can help you get a grip on your expenses and determine ways to reduce your energy consumption.
Have you ever thought, how do business electricity bills work? Well, we’re here to answer that for you! Read on to clearly understand your company’s energy bills, including the direct expenses you need to be aware of and what factors influence greater energy bills.
What You Will See On Your Business Energy Bill?
Your energy provider will determine how your energy statement is organized, but it will always include the same essential pieces of information. Hence, your business electricity bill will probably have:
- Bill date and billing period
- Account number
- VAT number
- Name of your tariff
- Account balance
- Your electricity and gas usage
- Your standing charge
- VAT charges
- Total amount due
- Your payment due date
- MPAN/MPRN number
- Early exit fees
The Factors that Affect Your Business Electricity Bills
Whether you own a large or a small business, the price of your company’s energy consumption will be determined by various factors. Although businesses often have access to lower wholesale energy prices, their energy use is typically far higher than that of the typical household. In addition, a greater rate of VAT charged and environmental taxes are two reasons that lead to excessive billing for businesses. Although each of these factors affects the overall cost, it’s possible to make considerable cost reductions if you understand the pricing structure for commercial energy and can determine which option offers the best value given the specifics of your organization. Some other factors include:
Costs associated with producing electricity are subject to daily and even hourly fluctuations. Demand is the primary factor that determines the cost of power. For this reason, for instance, businesses all across the country require electricity to function between 9 am and 5 pm, which places significant pressure on the national grid and causes it to cost energy suppliers more money to supply that demand.
The Electricity Market Reform Policy
The government came up with the Electricity Market Reform Policy to mitigate the effects of these variations and lower the demand for electricity that produces a lot of emissions. Reforms to Contracts for Difference and updated guidelines for the Capacity Market were also components of this strategy.
A variety of global events also influence alterations in the cost of energy. The availability of oil and other fuels may be restricted as a result of natural disasters or armed conflicts. Because of this, there is a massive increase in demand, increasing the cost energy providers must pay at the wholesale level.
The Bottom Line
When you run a company, you have many different jobs competing for priority, which is why reviewing your company’s energy bills generally never makes it to the top of the list. However, spending a few minutes looking over your bills can pay you in the long run.
Many different things might go into making your electricity bill, making it a little bit difficult to understand. Consider switching your commercial energy supplier to ensure your business maintains a price advantage in the market.