For many UK businesses, energy has shifted from being a background operational cost to a board-level concern. While wholesale electricity prices have eased since their post-Ukraine peaks, overall commercial energy bills continue to rise and are forecast to rise further for structural, rather then cyclical, reasons.
The hidden driver of rising energy bills: non-commodity costs
An increasing proportion of commercial electricity bills now comes from non-commodity charges: network fees, system balancing costs, policy levies and infrastructure investment.
Industry analysis shows that these non-commodity costs are expected to increase by around 55% by 2030, driven largely by:
- Major grid reinforcement and transmission upgrades
- Investment by National Grid and regional distribution companies
- The cost of new national infrastructure such as the Sizewell C nuclear power station
Crucially, these charges apply per kilowatt-hour consumed, regardless of where wholesale prices go. In other words, even if energy markets stabilise, business electricity bills are still expected to rise.
Why this matters for business planning
Many businesses hedge energy costs through fixed-price contracts or forward purchasing. While this can reduce exposure to short-term price volatility, it does little to protect against long-term structural increases in regulated charges.
This means that traditional procurement strategies alone are no longer sufficient. Businesses that rely entirely on grid electricity remain exposed to:
- Rising infrastructure and policy costs
- Increasingly complex tariff structures
- Greater charges linked to peak-time demand
Solar is the most effective hedge against kWh-based charges
On-site solar generation offers a simple but powerful advantage: every unit of electricity generated and consumed on site is a unit not bought from the grid.
That single fact means solar reduces exposure to:
- Wholesale electricity prices
- Network and transmission charges
- Policy and system costs applied per kWh
Unlike energy contracts, solar provides a physical hedge. Once installed, the cost of generation is largely fixed and predictable for decades, offering long-term visibility in an otherwise uncertain energy landscape.
The role of batteries: controlling when you buy energy
As electricity pricing evolves, when energy is used is becoming almost as important as how much is used.
Battery storage allows businesses to:
- Store excess solar generation for later use
- Reduce imports during peak demand periods
- Avoid or reduce capacity and peak-time charges
- Smooth energy demand profiles without operational disruption
In combination, solar and battery systems give businesses far greater control over their energy costs and reduce reliance on increasingly punitive tariff structures.
Grid investment will continue – and businesses will pay for it
The UK’s transition to net zero requires unprecedented levels of grid investment. While this is essential at a national level, the costs are largely recovered through electricity bills, particularly from commercial users.
Government support schemes exist, but many are:
- Limited to the most energy-intensive sectors
- Delayed in implementation
- Insufficient to offset near-term cost increases
For many businesses, waiting for relief is not a viable strategy. Taking control of energy consumption is.
A strategic investment, not just a sustainability decision
Solar and battery systems are often framed primarily as carbon-reduction measures. While the environmental benefits are real, the commercial case has become just as compelling.
For business leaders, on-site generation is increasingly about:
- Cost control and long-term price certainty
- Risk management and resilience
- Protecting competitiveness in a high-cost energy environment
As some manufacturers and commercial operators have already concluded, reducing reliance on the grid is no longer an ideological position, it is a pragmatic one.
The bottom line
If your business buys all its electricity from the grid, it absorbs every future infrastructure, policy and system cost. If you generate and store your own, you regain control over a significant part of your operating costs. In the current and future energy climate, solar and battery storage are no longer optional upgrades. They are strategic assets.
If you’d like to understand how solar and batteries can reduce your energy expenditure, please call us on 01803 200666 or email our Commercial Technical Salesperson, Harry Williams – harry@bloomrenewables.co.uk