Energy bill support for small businesses 2025

With the domestic energy price cap rising, home businesses will be exposed to higher bills. But there currently isn’t any government support for businesses to help manage their energy bills.

So how will the energy price cap affect the costs for your business? And what can you do to make sure you’re getting the most out of your current energy deal?

Here’s what we’ll be covering:

• does the energy price cap affect my business
• will more support be announced?
• should I fix my energy deal?
• energy saving tips to reduce your bills
• help if you’re struggling to pay your energy bills
• Energy Bill Discount Scheme ends
• how to support your employees
• what if you can’t pay staff or suppliers?
• what to do if you can’t pay staff or suppliers

Does the energy price cap affect my business? 

For 1 April 2025 to 30 June 2025, the energy price cap has increased by 6.4 per cent to £1,849 a year for a typical household who use electricity and gas. 

The energy price cap in the UK specifically applies to domestic energy customers, not businesses. But that doesn’t mean businesses aren’t affected by energy market fluctuations.

The domestic energy price cap, set by Ofgem, regulates the maximum amount suppliers can charge households for each unit of energy. Businesses operate in a deregulated energy market, meaning they negotiate contracts directly with suppliers. 

But there can be an indirect impact: 

• higher wholesale prices – the domestic price cap reflects trends in wholesale energy prices. When wholesale prices rise, it indicates that energy costs are increasing across the board, which could also affect business energy contracts  
• economic instability – higher energy bills for households can lead to reduced consumer spending, which can negatively impact businesses, especially those in retail and hospitality
• home based businesses – you’ll be exposed to higher energy bills if you run your business from your home 

Will more support be announced?

While the energy crisis that led to these schemes being implemented has settled, energy costs remain higher than before the cost of living crisis. And with costs rising across the board for businesses, many are still struggling with their energy bills. 

Domestically, the government plans to expand the Warm Homes Discount to 2.7 million more low income households. The one-off £150 could offset the 6.4 per cent rise for those households. 

But there are no plans for any discount schemes for businesses. You’ll need to find other ways to make savings on their energy bills. 

Should I fix my energy deal?

You can sometimes make savings by fixing your energy deal with a supplier. This means you’ll agree to pay a certain rate for the period of the contract. However, make sure you do your research to be sure you’re getting a competitive rate.

If you’re interested to know what the average energy consumption is for UK businesses, check out the latest energy statistics from Uswitch.

Read our guide to the best energy suppliers and the types of energy contracts for more information.

Energy saving tips – how to reduce your bills

Shopping around for a new deal, making your business more energy efficient, and measuring how much you’re using could help you reduce your energy bills.

Look for a new energy deal

Many businesses may be looking to renew their tariff or shop around for a new energy deal. However you’ll only be able to do this if your existing contract is coming to an end, or you’re not tied into a contract.

• contact your energy supplier – ask your supplier if they can offer you a better deal
• use comparison websites – research suppliers and rates for a new business energy tariff
• check when your contract ends – look at how much notice you need to give your supplier if you want to switch

Improve energy efficiency

There may be things you can do to make your business more energy efficient. These don’t all have to be expensive changes, and you could look into funding to help your business become greener.

For example, you could replace lights with LED bulbs or install sensors that dim lights in bright spaces. And make sure you turn off any lights and machinery you’re able to at the end of each day.

Understand your energy usage

If you haven’t already, consider installing a smart meter for your business. This can help you understand how you’re using your energy, and avoid paying estimated bills. This means you’ll only pay for what you actually use.

It’s worth noting too, energy suppliers can’t charge you for energy used more than 12 months ago if you’re a ‘microbusiness’. Ofgem has more information on back-billing rules.

What if I can’t pay my business energy bill?

The best thing to do if you’re worried about paying your energy bill is to contact your supplier to arrange an energy payment plan. They may be able to help by giving you more time to pay or offering you a break or reduction in payments. You may also be able to ask for access to hardship funds.

Citizens Advice has a consumer helpline you can call if you’re in debt or if you’ve got a bill you can’t afford and your supplier hasn’t offered you a payment plan.

Don’t let financial problems build up or ignore them. The Business Debtline is a charity that can provide free debt advice to small businesses in England, Wales, and Scotland. You can speak to one of their advisers over the phone or use their live web chat service.

It’s also important to remember that not paying your bills can impact your credit score.

Visit Ofgem’s energy advice page for more information.
If you’re looking for more support on how to manage your business finances, visit our cost of living hub for small businesses and the self-employed.

Businesses are making sacrifices

Micky Whiteman, owner of RD1 Clothing said the energy relief scheme had been helpful but bills are just one challenge among many for small businesses.

“Our electric bill has been manageable, but this is just one factor businesses are struggling with. The cost of living crisis is impacting consumer spending (they have higher energy bills too) and suppliers are increasing their prices.”

He added: “I think there will be fewer businesses looking to start up and some may not survive if the government cannot continue to support or bring it down further.”

Micky also told us that the economic environment means he needs to “make some sacrifices”. He’s managed to keep the cost of products down in the shop so far but has had to reduce the number of staff he employs.

What if I run my business from home?

If you run your business from home then it’s unlikely that you’ll have a business energy account. This is only possible if you use 50 per cent or more of your energy to run your business at home.

However home-based businesses won’t pay more than the energy price cap set by Ofgem (more on this below).

How to support your employees

If you employ people in your business then looking after their wellbeing at work is going to be top of mind, particularly while navigating times of financial uncertainty.

A salary advance can be helpful as an infrequent way to give staff access to their salary early, but shouldn’t be relied on as a bridge between paycheques.

The bottom line is to make sure you’re paying your staff fairly for the work they’re doing. Offering rewards or local discounts, however small, can also help your people save money and feel valued.

The CIPD has a range of resources to help employers support employees struggling with the cost of living.

Finally, always signpost your staff to resources such as Citizens Advice or The Money Charity if you’re worried they’re getting into debt.

What to do if you can’t pay staff or suppliers

If your business’s financial situation has reached a point where you’re worried you won’t be able to pay your staff or suppliers then you should get financial advice immediately.

You might be able to apply for the government’s breathing space scheme if you’re in England or Wales (although this doesn’t apply for limited companies).

If you’ve caught the situation early, consider if there are other things you can do in the short-term. Can you reduce costs in other areas to make sure you can cover staff wages and bills? Take a look at your cashflow and chase up unpaid invoices in the first instance.

Useful resources and organisations

• Business Debtline – free debt advice
• Citizens Advice – guidance if you’re struggling to pay your business energy bill
• Cost of living resources for small businesses
• Managing mental health at work – guidance to support yours and your employees’ mental health
• StepChange – debt charity offering free, independent advice
• Turn2Us – financial support charity

How-to guides and protecting your business

• How to budget
• How to negotiate with your energy suppliers
• How to access funding and investment
• What is business insurance?

How are rising costs affecting your business? Let us know in the comments.

This article is intended as a guide and should not be used as a substitute for professional financial advice.