Prior to April 2025, the UK energy market had attracted major attention among energy suppliers and consumers due to upcoming price cap change, which impacts significantly the domestic energy spendings of UK households. During the same time, however, the non-domestic energy market also experienced severe volatility [Department for Energy Security and Net Zero, 2025].
The UK electricity market has continued to show instability and price pressure since Q1 2021, according to the latest data from the Office for National Statistics (ONS) and industry analysts [UK Parliament, 2025]. For many UK businesses, particularly in energy-intensive sectors, this volatility is creating ongoing challenges around forecasting, budgeting, and operational planning [ONS, 2025].
Non-domestic electricity prices rose by 6.4% year-on-year in March 2025, with many regions seeing sharper localised spikes, particularly for businesses with flexible or variable tariffs. The rise is being attributed to a mix of factors:
In some regions, network and distribution charges have also added to the overall cost burden, particularly for mid-sized commercial users. According to the UK Energy Research Centre, grid-related costs now account for as much as 28–33% of total electricity bills for businesses on standard commercial contracts.
As a result of this sustained unpredictability, many companies are re-evaluating their energy procurement strategies, including fixed vs. flexible contracts, multi-year hedging, and demand-side response mechanisms. Energy consultants report a sharp uptick in businesses seeking price benchmarking, real-time monitoring, and scenario modelling to manage their exposure to sudden cost spikes [RPI Statistics by ONS, 2025].
At the same time, larger corporates are exploring alternative approaches to reduce reliance on the wholesale market, including installation of renewable energy systems (e.g. solar PV panels), investment in energy efficiency, and participation in capacity markets or flexibility services [UKERC, 2025].
The impact is especially acute for manufacturers, logistics providers, and multi-site retailers, many of whom are dealing with energy bills that now account for 10–15% of operational expenditure, up from typical pre-2021 averages of 3–5%. For SMEs, rising energy costs are increasingly being cited as a barrier to growth or investment [British Chambers of Commerce, 2025].
A 2022 survey found that over 50% of businesses are considering solar PV installations to remedy the volatility of the electricity market [Jacobo, 2022].
Looking forward, industry experts warn that market instability is likely to persist through 2025 due to geopolitical tensions, ongoing grid upgrades, and the phased withdrawal of government price support schemes. The Electricity System Operator (ESO) has also noted the increasing challenge of balancing supply and demand in a system transitioning to greater renewable penetration.
With more pressure than ever to cut carbon, improve resilience, and manage costs, energy will remain a strategic priority for UK businesses of all sizes in the quarters ahead.
Unlike fixed-term contracts or hedging strategies, onsite solar generation offers long-term stability and independence from the external market. By generating electricity directly from your rooftop, you reduce reliance on the grid and protect your business from unpredictable pricing swings — while also lowering your carbon footprint.
At Absolar, we’ve seen a marked increase in businesses seeking data-driven, site-specific analysis to explore this opportunity. That’s why we offer a fully funded Remote Solar Survey, allowing companies to quickly understand the solar potential of their premises, without any upfront cost or site visit required.
Onsite energy generation allows you to become less reliant on providers, and thus gain control over volatile energy prices. With ROI’s surpassing 20%+ the system essentially pays for itself within a few years.
--- Akash Yadav, Senior Project Manager at Absolar
If you’re interested in exploring how solar could reduce your exposure to the energy market - and deliver a strong financial return - our team can help.
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