The ongoing social, political and economic global changes have left us all fighting to take back control of what we can and make cost savings in any way we can. We’re facing huge economic upheaval and one of many hot topics of debate concerns the rise in energy prices.
On November 19th 2022 various schemes for companies, communities and associates were presented in a bid to simplify and help with the rising prices. We want to present these to you, in an easy-to-digest way to help relieve the stress associated with the rising prices for individuals and small businesses. We’ve split this blog into two main sections - advice for individuals and advice for professionals. Please skip to Section 1) for individual advice, and Section 2) for professional advice for small businesses.
1. Schemes to help pay electricity bills for individuals
Tariff Shield - translates to a price cap
At the end of 2021, the Tariff Shield was first introduced in France. The Tariff Shield capped the increase in electricity bills at 4%. This cap is soon coming to a transition period, where it will be extended but with a maximum price increase of 15% from January 2023, and 15% for electricity from February 2023.
But who is eligible? Well, if you’re an individual or small company with less than 10 employees and have a turnover of less than two million euros and an electricity meter with a power rating of less than 36 kVA then bingo - you’re eligible for this shield.
With this being said, the regulated sales tariff (TRV) offers are only offered by EDF and local distribution companies. Now for the most important bit - you don’t automatically get enrolled into the programme - you must check whether you have signed up for the regulated prices, or the “offres de marché'' which is the market rate.
Energy vouchers for individual households
This energy voucher option is a fantastic incentive to help individual households pay bills (electricity, gas, heat, fuel oil, wood, etc.) to energy suppliers. You are eligible to redeem this voucher if your household has a reference tax income (RFR) per consumption unit (UC) strictly below €10,800. It is also possible to use it for certain household-related work - specifically work that is aimed at limiting home energy consumption or as part of existing renovation aid.
We know this can sound a little complicated - and if you need any help understanding whether you fit into this bracket please don’t hesitate to get in touch so that we can help you understand your options.
2. Schemes to help pay electricity bills for professionals
The electricity buffer for businesses
Sadly there are some very small businesses that are not protected by the tariff shield because they have an electricity meter with a power rating of more than 36 kVA. For those who do not qualify for the tariff shield, they will benefit from a new, different type of electricity buffer mechanism:
Those currently signing or in the process of renewing a contract, they will benefit as soon as the megawatt-hour price for the market supply part of their contract is above a level of €325/MWh.
This benefit will be a flat-rate subsidy on 25% of the companies' consumption, making it possible to compensate for the difference between the lowest price of €325/MWh and the highest price of €800/Mwh.
The cap will be at €800/Mwh and so the maximum aid will therefore be around €120/MWh for the companies concerned.
The price reduction (induced by the electricity buffer), will be automatically and directly deducted from the company's electricity bill. The financial compensation will be paid to the energy suppliers by the State via the energy public service charges.
The exact modalities of this buffer are currently being determined. For regular updates, keep an eye on this link:
Tax on electricity (TICFE) and regulated nuclear energy (ARENH)
It’s important to realise, that despite your business size, all companies will benefit from the reduction of the tax on electricity (TICFE) to its European legal minimum in some way. In addition to this, companies can also benefit from the regulated access to historic nuclear energy (ARENH mechanism (120TWh) which allows them to obtain a significant proportion of their electricity at a fixed price of €42/MWh, rather than at the market price.
We know facing economic adversity can be a very daunting feeling, particularly when things feel out of our control. At Aster, our client base is made up of individuals and small to medium-sized businesses and you’ll have noticed that this blog was focused on assistance targeted to this group. We know that these incentives may feel like a drop in the ocean to you, but they’re practical actions that we can change as small businesses and individuals to ease the pain of the cost of living slightly. If you need any help figuring out how to turn what you’ve just read into reality, we’re all ears.
The Aster Team.