How 2026 Deals Could Impact Your SME Budget
As businesses head into winter 2025–26, rising global energy prices and shifting UK energy policy are creating challenges and opportunities for SMEs. While large industrial firms await long-term relief mechanisms, smaller operators must take immediate action to control costs and manage cashflow risk.
What’s the Energy Picture in Late 2025
Global wholesale energy prices remain volatile, and UK businesses are facing renewed upward pressure as demand rises, supply uncertainty persists, and regulatory levies remain high. Many fixed-rate contracts signed in 2024 expire this winter — exposing firms to market-based charges for 2026.
Meanwhile, there is increasing discussion in government and regulatory bodies about extending support schemes for energy-intensive industries or offering targeted grants to small firms investing in energy-efficiency upgrades.
What SMEs Should Do Now
With volatility ahead, SMEs should adopt a mix of short-term defence and medium-term investment strategies:
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Audit energy usage and cost structure — identify your top 5 cost centres (e.g., heating, lighting, machinery) and baseline usage so you understand where the largest savings can come from.
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Review contract expiry dates — if your fixed rate ends this winter, obtain quotes early and consider hedging or multi-year deals to avoid peak-winter spikes.
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Explore energy-efficiency capex — small investments (LED lighting, insulation, efficient heating, smart thermostats) can reduce consumption, and may pay off over 2–4 years even with current energy prices.
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Budget for volatility — build scenario forecasts assuming +25–50% price spikes; stress-test your cashflow and working capital under worst-case energy cost assumptions.
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Consider green grants or reliefs — investigate whether there are sector-specific grants or reliefs (BEIS/DBT) for energy upgrades that you can take advantage of now — many of these require application or commitment this winter.
We Can Help Assess The Risk
As trusted advisers, we are uniquely positioned to help our clients embed energy-cost risk into your broader financial planning:
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Model different price scenarios and embed them into 2026 budgets.
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Advise on asset-vs-opex, capex timing, and ROI on efficiency investments.
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Help businesses claim any available capital allowances or reliefs for energy-saving investments.
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Provide working-capital and liquidity reviews to manage spikes.
With fixed energy contracts expiring and winter volatility ahead, energy costs could become a major stress point for SMEs — early action matters.
Give us a call to book an “Energy Cost & Cashflow Stress Test” with us — we’ll model your 2026 budget under different energy price scenarios and identify savings