Issue #109 - Why The Price Cap Drop Can't Save You 🏪
Does a drop in the price cap mean prices are falling? 📉 | What’s going on with energy prices? 🔥 | How is energy bought & sold? 📊 | All you need to know about the price cap 💡| Words | Tunes | More
GO 🦾
Going down, going down, going down? 📉
Welcome to Issue #109 of The Backbone - the fortnightly newsletter from Bionic.
The Football League play-offs always dominate the last Bank Holiday weekend in May - this season’s saw Sunderland, Charlton, and Wimbledon all going up.
But arguably the biggest news this Bank Holiday weekend was about something coming down - the energy price cap has dropped for the first time in 12 months.
The new rates won’t take effect until July 1 and will only last for three months, when the cap will change again. While we can’t predict what will happen at the next review, both Cornwall Insights and Martin Lewis are predicting another drop, followed by an increase in January (just in time for the worst of the winter, obviously).
But remember, the energy price cap only limits the amount suppliers can charge for domestic energy. There’s no cap on business energy.
As a business owner, your non-domestic contract won’t be directly affected by this announcement. Same as it wasn’t affected by the last one and won’t be affected by the next one.
But this announcement could signal a drop in energy prices. This is because the level of the cap is directly linked to wholesale prices (the amount suppliers pay for the gas and electricity they sell to you).
This was confirmed by Tim Jarvis, Director General of Markets at Ofgem, who told Radio 4’s Today programme on the day of the announcement: “What we’re announcing today is a reduction in the price cap of around 7% for the three-month period from July. That’s around £129 a year [less] on the average bill. The main reason for that fall is a change in the international wholesale price."
This means that now could be a good time to compare quotes and lock in your rates.
If you’re out of contract, you could be paying as much as 35% more for your energy, so fixing your rates now makes sense.
If you're on a fixed-rate contract, it’s worth keeping an eye on prices and comparing quotes for your next contract. If your current contract is up for renewal, now could be a good time to lock in your rates to take advantage of falling prices and make sure you don’t roll onto your supplier’s out-of-contract rates when it ends.
Head to our READ 🗞️ section for all you need to know about the price cap and energy prices. And watch the short video below for a quick recap on the price cap and what it means for your business (why not follow us on TikTok too? 🙏)
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🗞 READ
What’s going on with energy prices? 🔥
Energy rates have been relatively flat across 2025, but wholesale prices did drop in February. There's been nothing like the price volatility we saw in 2022 and 2023, but does a drop in the latest energy price cap review suggest prices will continue to fall?
How is energy bought and sold? 📊
If you’ve ever wondered why the price you pay for energy doesn’t seem to quite tally with rising and falling wholesale prices, it’s largely down to the way energy is bought and sold and the level of risk faced by suppliers.
To give you an idea of how it all works, let’s take a closer look at what the energy market is and how gas and electricity are bought and sold.
Everything you need to know about the price cap 💡
When did the energy price cap start? Do we need an energy price cap? When was the last time it came down? How much more expensive are rates now compared to when the cap was brought in? We answer all these questions and more.
🗣 SHOUTOUT
#BionicBusinessStory - 5 businesses, 1 question 🤔
Regardless of whether gas and electricity prices are going up or down, it’s a good idea to fix your rates to avoid out-of-contract rates that see you paying 35% more for the same energy. It’s also a good idea to use less energy. Here are some solid tips from five very different business owners.
Bionic - How do you save energy at your business?
🍦 “I did lots of things, like replacing my light bulbs with energy-saving ones. I put timers on some of the electrical equipment that needs to be on at certain times, that has meant I'm saving two or three hours a day's worth of electricity.” Corrie Hill, Mrs Chill’s Ice Cream Parlour
🏋️♂️ “We made all our lighting LED. Lighting this place alone was quite significant so that in itself dropped our energy bills. In terms of heating, we basically have none. We had 17 radiators that we got rid of and there’s just one left in my sister’s office which she refuses to get rid of. It’s an initial outlay, but you save so much money in the long run. We had around 400 bulbs which were 20 watts each, the new ones are about 4 watts. So, it’s a huge energy saving.” Mick Povall, Gravity Health and Fitness
🍻 “In terms of energy use, we've installed some new kit via Heineken, as they supply our beer. This kit means we can turn the cooling settings in the cellar on and off as opposed to just leaving it on constantly. Those kinds of technology solutions are really handy.” James Gadsby Peet, The Star of Greenwich
💪 “Hybrid is a very energy efficient gym, so there's no cardio kit plugged in. Most pieces of equipment are battery operated and can be recharged, there's only about ten things which need to be plugged in on a daily basis and all the lighting I've got has been changed to super-efficient LEDs. I did a lot of research on energy costs, different providers and different contract lengths, which initially felt like a lot to get involved in. But actually, now, when the electricity bills coming through, it's something that is paying dividends back to me.” Chris Harrison, Hybrid Fitness
🍺 “I keep an eye on contract prices and then in day-to-day life, we just make sure to turn off everything at night. In the winter months, we can turn off the big chiller in the cellar, little shortcuts like that can make a big difference.” Kate Davidson, The Old Ivy House
Want to read more small business stories? Head over to Bionic 🦾
📊 BUSINESS
Get your business costs sorted 💷
Bionic is the comparison site for your small business. We compare a range of business essentials to help you save time, money, and hassle.
Our tech-enabled team will answer all your questions in simple terms and help you find the best deal on business energy, insurance, phone, broadband, or finance. No jargon. No-fuss. #BeABionicBusiness 🦾
🎧 LISTEN
Playlist 🎶
One from friend of The Backbone, Rob, who has curated another wonderfully chilled playlist - this time full of blissed-out beats for spring and summer. Cool Electronic Music for Spring has got Air, Zero 7, Boards of Canada, Tame Impala, Four Tet and loads more. Definitely one for a late evening fire pit and a glass of something equally as chilled.
Podcast 🎙
We’ve mainly covered energy and energy prices in this issue, so we thought it’d be worth adding a bit on money-saving tips. And who better to turn to than the sovereign of saving, the tsar of thrift, Martin Lewis and his podcast?
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