How to understand your business energy bill
Your business energy bill doesn’t have be a mystery.
Understanding what you’re paying for can help you make smarter decisions when it comes to energy usage and even help you identify potential savings.
Let’s breakdown exactly what makes up your ScottishPower business energy bill.
THE FIVE KEY COMPONENTS TO YOUR BILL
Every business energy bill consists of five main elements:
- Wholesale Costs - this is the cost of the actual gas and electricity your business uses.
- Network & Metering Charges - these charges cover the operation and management of the gas and electricity networks that deliver energy to your business. It’s useful to think of this part as a delivery fee for getting energy safely to your premises.
- Environmental & Social Obligations - these charges help fund renewable energy projects and other government-led environmental initiatives. Programmes like the Renewables Obligation support the shift towards cleaner, greener energy.
- Operating Charges - these charges cover the cost of buying the energy and day to day operational costs.
- Tax - like everything else, energy comes with tax. This typically covers VAT and sometimes, The Climate Change Levy (CCL), which is an environmental tax charged on the energy that a business uses. If your average consumption during a billing period stays below set daily limits, you’ll be charged the reduced VAT rate and won’t need to pay CCL. These limits are 33 kWh per day for electricity, and 145 kWh per day for gas.
**HOW YOUR PAYMENT METHOD AFFECTS YOUR BILL**
Quick tip: How you pay makes a big difference to what you actually pay.
• Paying by Direct Debit - you’ll benefit from lower rates due to lower administrative costs.
• Paying by cash or cheques - these rates tend to be higher because there are higher operational costs and a higher payment risk.
Your energy bill might have a lot of moving parts, but each one serves a purpose. Understanding what you’re paying for puts you in control and helps you make better decisions about your energy.
Now, the next time your bill arrives, you’ll know what’s contributed to the final amount.
Find out more about the elements that make up your bill.
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