Accounting & Finance
Slash Your Business Energy Costs Today
It’ll be a wise move to look at your gas and electric usage within your company to discover quick and simple ways to slash your energy bills. When you consider that the average business across the UK is currently spending close to £4,000 a year on energy, any reduction in use is worthwhile. Not only will becoming more aware and smarter with your energy assist businesses to boost their bottom line, but it can also help them to reduce their carbon footprint substantially. This, in turn, can make a company greener and more profitable.
Understanding the energy expenditure of UK businesses
In the past seven years alone, there has been a 100%+ increase in average business energy bills. For most SMEs, gas and electricity charges now make up a considerable chunk of their monthly outgoings – taking a hefty portion of their profits. The majority of UK businesses are using between 15,000 and 25,000 kWh of power per year, but annual consumption figures for large business and industry can reach over 250,000 kWh.
How does this usage reflect on bills? The latest data shows that businesses in the UK are spending an average of £3,061 on their annual electricity bills, and an additional £856 a year on gas. Small businesses in particular fare slightly better – but with the average electricity bill for an SME reaching £2,958 (and that’s before putting business mains gas into the equation), it’s still a considerable outlay.
Six ways that businesses can reduce their energy costs
The numbers reported above are sure to appear surprising to many employers, especially those who work at businesses with energy-intensive operations such as hotels and catering, healthcare and manufacturing. However, there are ways for savvy billpayers to bring their usage and prices down. Gas installation specialists Flogas Energy shares some expert tips on how companies can slash their energy costs:
1. Become more aware of energy
Knowing how much energy you use and precisely what it’s costing, you should be where you begin when trying to achieve lower energy prices. The average unit prices in the UK are currently 14.36p per kWh for electricity and 4.25p per kWh for gas, with standing charges on top of this. Finding out your business’s annual usage figures – and knowing when your contract is due to come to an end – means you’re well equipped to accurately compare your current supplier’s prices with others on the market.
2. Take a look at your current contract
It’s wise to check you have the best contract setup possible for your business, regardless if you are planning to remain with an existing supplier or are considering a switch to a more appealing deal. For example, an extended fixed-term contract could help protect you against future price rises, giving some valuable peace of mind and making budgeting easier. Or there might be an additional discount on offer if you opt for a Direct Debit payment plan.
3. Compare prices
Bills can rise as much as 100% if you choose to leave an existing tariff to roll over instead of checking how the rate compares to others. Ahead of your contract ending, it’s worth finding out how much switching could save you. And, whether you use a broker, online search or go direct, make sure you don’t limit yourself to the Big Six. Switching to a smaller business energy supplier could mean significantly lower bills and benefits like better customer service.
4. Aim to invest to save
Whenever you’re investing in equipment throughout your firm, bear in mind the long-term energy performance of the items that you’re bringing in. For example, opt for energy-efficient, A-rated appliances. While this approach might come with a heftier price tag in the first instance, any piece of kit that helps save energy on your everyday operations will pay for itself and more in the long run.
5. Don’t dismiss smart meters
Fitting a smart meter can be arranged by simply getting in touch with your energy supplier. That way, you’ll know exactly how much your business energy supply is costing you day-to-day – and because you only pay for what you use, there’s no need for estimated billing or meter readings. As well as saving on monthly charges, it can also help you wise up to your company energy use and make better decisions on where you might be able to curb your consumption. Energy management software can also help provide useful insight into larger businesses.
6. Have a change in your behaviour
Some of the energy usage at your business will, unfortunately, be fixed, but there are areas where alterations can be made for the better. Bear in mind too that a small change in output can make for a huge annual saving. It could be as simple as making sure computers are switched off outside of office hours, or putting your lights on a timer, but encouraging employees to find more efficient ways of working is a great place to start. Some companies even introduce incentive schemes to help foster better habits, offering staff rewards for greener behaviour.