The economic landscape in 2025 brings both challenges and opportunities for UK businesses. While recent forecasts suggest oil prices may remain relatively stable in the near term, major banks warn that geopolitical tensions or supply disruptions could trigger sudden, significant price spikes—potentially doubling current levels in a worst-case scenario. At the same time, inflation remains elevated, with the Consumer Price Index up 3% year-on-year and core inflation at 3.3% as of January 2025. For businesses, these trends translate directly into higher costs for fuel, energy, and everyday operations.

The Impact on Businesses: Volatility and Cost Pressures

Even in a stable market, energy costs are among the top three expenses for a third of small businesses. When oil prices surge, these costs can escalate rapidly, squeezing margins and making it harder to plan for the future. Inflation compounds the issue, driving up prices for goods, services, and labour. The result? Reduced profitability, tighter cash flow, and greater uncertainty.

Building Resilience: The Case for Energy Efficiency

Amid these challenges, one of the most effective ways businesses can protect themselves is by making their energy use as efficient as possible. Improving energy efficiency offers immediate and long-term benefits:

• Lower Operating Costs: Strategic investments in energy efficiency—such as upgrading insulation, lighting, and equipment—can cut utility bills by 10% to 30%.
• Greater Competitiveness: Savings from reduced energy use can be reinvested in growth, innovation, or staff, helping your business stay ahead in a competitive market.
• Enhanced Reputation: Demonstrating a commitment to sustainability can attract customers and talent, with 84% of consumers considering sustainability important when choosing a brand.
• Reduced Risk: Efficient operations are less vulnerable to energy price shocks, helping to stabilise your bottom line.

Going Further: Onsite Renewable Energy Systems

For many businesses, the next step is to take control of energy supply by installing onsite renewable energy systems such as solar panels, heat pumps, or wind turbines. The benefits include:

• Energy Independence: Generate your own electricity and reduce reliance on the grid, insulating your business from future price volatility.
• Long-Term Savings: While there is an initial investment, renewables often pay for themselves within 6–15 years and deliver ongoing savings thereafter.
• Sustainability Leadership: Onsite renewables cut carbon emissions and demonstrate your business's commitment to a greener future, which can be a powerful differentiator in the marketplace.

Funding and Support: Making the Transition Affordable

• Government Grants and Loans: The UK government has committed nearly £5 billion to help businesses become greener, with specific schemes available in England, Scotland, Wales, and Northern Ireland.
• Local Authority Support: Many councils offer grants or incentives for energy upgrades—eligibility and amounts vary by location.
• Specialist Funds: Innovative programmes like the Renewable Rewards Fund provide interest-free funding for renewable projects, with repayments integrated into your energy bill—no upfront costs or balance sheet impact.
• Business Rate Exemptions: Installing onsite renewables may qualify your business for rate relief, further improving the financial case.

At Tomson Consulting, we can help guide you through the process—from identifying the right energy solutions to securing funding. In some cases, depending on your location and project type, we can assist you in accessing grants or low-interest finance to make your upgrade more affordable.

Take Action Now

The risk of rising oil prices and persistent inflation makes it more important than ever for businesses to future-proof their operations. By improving energy efficiency and considering onsite renewables, you can reduce costs, build resilience, and position your business as a sustainability leader.

Contact Tomson Consulting today to explore your options. Let's work together to make your business more efficient, sustainable, and prepared for whatever the future holds.

For more information on funding opportunities or to book an energy audit, get in touch via our website or call our team directly. We're here to help you secure your business's future—efficiently and sustainably.