Why Is Business Electricity So Expensive?

Business Electricity
Business Electricity

Do you work in a business where electricity is consumed most of the time? Do you always find yourself asking the same question over and over as to why the business electricity bill is so high and expensive?

We all are aware that owning a business can be a daunting issue, on top of which is having expensive electricity bills.

However, you need not worry as in this article we will cover all the reasons why business electricity is so expensive. So without further ado, let’s dive in.

Factors affecting business electricity

Prices for commercial electricity frequently change. This may be quite unpleasant for consumers because it’s all too easy to get hit with a hefty bill, especially if you use variable business electricity tariffs or if you’re a small or medium-sized firm (SME) with limited financial flexibility.

Even though it is annoying that company electricity costs fluctuate, there are a lot of other things that contribute to this.

You may arm yourself with the knowledge essential to foresee as well as when this will occur by becoming knowledgeable about the factors that influence changes in business power pricing.

If you are someone struggling with business electricity, has got your back as they aim to help you with bills, etc.


Although it may seem strange to think that the weather could have an impact on your company’s electrical costs, it does. Power outages may have occurred at your company during major storms and other severe weather events.

This shows that the atmosphere is inflicting harm to electrical lines and distribution systems, all of which must be fixed at a cost.

For one-time occurrences, this is less of a problem, but for ongoing, harmful weathering, corporate energy suppliers may face enormous expenses that are then passed on to the customer.

Additionally, because you are likely to use more energy during high temperatures, your business electricity costs may increase.

You put up the heat when it’s too cold, and you turn on the air conditioning when it’s too hot. To soften the blow, check into energy conservation methods before extreme summer and winter temperatures because the more you spend, the higher your electricity costs will be.

The effects of weather are not always negative, though. High precipitation and snowfall can enhance the amount of power that hydropower plants can produce.

Electricity generation

A huge proportion of individuals out there do not know this but electricity generation has a huge impact on the cost of business electricity used.

The energy mix has changed significantly in recent years, and renewable energy sources now provide more electricity than ever before, bringing down the price of this kind of energy.

We are all aware that the global supply of crude oil and other fossil fuels, which are used to generate more traditional forms of corporate power, is finite. The price will increase as this resource gets scarcer. According to projections for 2019, coal will run out in 110 years, natural gas in 54 and oil will run out in 53 years.

We have used these fuels, which took over 66 million years to create, in less than 200 years. This indicates that it is improbable for fossil fuels to become headline again as they will be needed for electricity generation in the upcoming future.

Why are energy prices so high?

You may be asking yourself, why are energy prices for a business so high even after strict measures and improvements have taken place to ensure that the bill comes at a reasonable amount? Well, there are many reasons out there that can cause energy prices to increase.

Government support is insufficient for new leading businesses

Although the government’s initial support plan of a total of 15 billion pounds would see households credited with £400 over six months starting in October, this won’t have as great of an impact as measures implemented in other European countries.

For instance, France has restricted annual rises in electricity prices to 4%, which goes to show just how difficult and different electricity demands are evaluated.

Lower output of renewable energy for businesses

Due to low wind speeds and some nuclear power plants experiencing outages, more of our electricity is produced using gas. Even if your green energy contract includes 100% renewable electricity, your rates will rise.

This is due to the way the UK’s energy system is set up, which means that the cost of renewable energy is correlated to the cost of gas; when gas prices rise, so do the costs of renewable energy.

Fixing energy rates

You may find it hard to believe, but there are many individuals out there who have tried different methods of fixing energy rates, as this could help them protect themselves from the dangers of paying high electricity bills.

The only approach to maintain bill stability in a volatile market and guard against future price increases is to fix your energy prices.

Although we are unable to anticipate if prices will climb further, they have increased dramatically over the past year, and anyone who had a fixed plan in September 2021 would have saved a lot of money on their energy costs.

Even if your current contract is not about to expire anytime soon, it can still be beneficial to compare rates and secure a new deal as soon as you can.

Customers who renew their contracts six months before the expiration date can save up to 20% compared to those who wait until the last minute.

Ways to reduce business electricity

It does not matter whether you work in a business that is run by successful entrepreneurs and leaders.

At the end of the day, the wisest thing to do is to look for alternative ways to save up on money so that you can spend it on growing your business further.

Since you are now aware of the factors that cause high electricity usage, let’s take a look at several ways business electricity can be saved.

–           Investigate and put into practice energy-saving solutions: This is a great and economical approach to save money for your company since some strategies may be put into practice for little to no cost.

–           Keep up with current events if you are on a variable or flexible tariff because they have a direct impact on how much you might be initially putting your money into your business electricity contracts.

The takeaway

It is evident from the inflation and high demand of businesses why electricity would rise. However, there are methods that we have mentioned as well as other methods that you could implement to help you save on business electricity.

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