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Business Energy Bills Explained – Part 2

Business Energy Bills Explained – Part 2

In part 1 (link) of our article on understanding business energy bills we went into detail of how each bill is split up. Understanding the different components of a bill is a vital step to working out whether you need to switch energy supplier in order to get the cheapest business electricity and gas rates.

The following discusses further details of a business electricity bill.

The Climate Change Levy (CCL)

This is a levy charged by the government for every unit of energy used that in non-renewable. The charge is 0.177 per kWh of gas, and 0.509p per kWh of electricity. However, if you use renewable energy then there is no charge on this, or if your business uses less than 145 kWh of gas per day (52925 kWh per year) or 33 kWh of electricity per day (12045 kWh per year). Other reasons this levy is not charged include a business with a residential element, such as a care home or hotel.

VAT

There’s not getting away from the dreaded VAT, and in general this adds 20 per cent to a business energy bill. But, if your business uses lower rates as with the Climate Change Levy above, or your business has a residential element, this is reduced to 5 per cent.

IGT Charges

Whilst most gas is transported to a property by Transco, some comes via pipes owned by an independent gas transporter (IGT). These are slightly more expensive, because the supplier of the gas has to pay to use them, and this charge is passed onto you. Another unfortunate point is that not only do you pay more, but your choice of gas supplier is also rather more limited.

Smart Meter Charges

The new generation of smart meters can make real financial sense for a company. Not only do you get to never have an estimated bill again, but you can work out where your business is frittering away money on poorly used energy bills. This can then allow you to work out how to become more energy efficient, and therefore understand how you can reduce your business energy bills.

Read our smart meter guide to discover more.

To find out how we can help your business become more energy efficient and reduce your outgoings, contact us on (0845 021 5000) or info@businessenergyshop.com for a no-obligation chat.

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