Energy price cap review will cause energy bills to increase by up to 54%
This could leave EV drivers who are being reimbursed through AER, short by up to £869 per year.
As the energy price cap review is due to take place later this month, ready for implementation on April 1st, we predict driver pushback will be larger than ever.
What is the energy price cap?
The energy price cap was first introduced by Ofgem in 2019, with the aim of providing protection to the millions of energy consumers across the UK, ensuring they pay a fair price for energy consumed.
The cap is a limit on the maximum amount energy suppliers can charge their customers for gas and electricity and only applies to those who are on a default tariff, often called standard variable. Those on a fixed rate won’t be affected until their fixed tariff comes to an end.
Twice a year, officials at ofgem review the energy price cap basing their figures largely on the average energy wholesale price, and this year, due to the energy crisis, analysts are expecting energy bills to increase by up to 54%.
What does this mean for drivers with company EVs?
The cheapest and greenest place to charge an EV is still at home, but without a tariff management system in place, drivers will be out of pocket, and significantly so if businesses are using their own reimbursement rate or the Government’s flat AER of 5 pence per mile.
In 2021, the average tariff rate for electricity was 20p per kWh, whereas today, this figure is closer to 30p per kWh, making the average pence per mile a more realistic figure of around 10.1p.
This means, drivers could be short by up to £869 per year based on an annual mileage of 20,000.
The only way EV drivers will not be out of pocket for business mileage, is to pay them accurately for any consumption used at home by eliminating the use of flat reimbursement rates.
Mina is the UK’s only solution that pays drivers’ energy suppliers directly for energy consumed at home. Their hardware agnostic technology enables them to accurately calculate the true cost so that drivers are never out of pocket.
With over 10 years’ experience in energy and utilities, Mina CEO and Co-Founder, Ashley Tate comments:
“Drivers should never be out of pocket when it comes to business mileage and will most definitely resist the switch to EV when they realise the complications that can come with paying for EV charging. We’ve seen this first hand with some larger fleets who’ve already made the move to EV.
It doesn’t have to be this way though, our mission at Mina is to make paying for EV charging radically simple so businesses can reassure drivers their consumption will be paid for accurately whether they charge at home, in public or at work.”
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