Cost of living: reducing commercial energy costs
Energy bills are among the biggest expenses that many businesses have. The rising cost of energy is a worry for many business owners. In this section, we outline some steps that you may be able to take to keep your energy costs as low as possible.
Understanding your energy usage
Make sure you know the terms of your current contract. This will help you to understand whether it may be possible to save money by switching to another tariff or another supplier. Look for the following terms.
- How much you are charged per unit and what the standing charge is. This information will be useful for comparing with other tariffs.
- The end date of your contract. You may be switched to a more expensive rate if you do not negotiate a new contract before your current one ends.
- When you can switch. Set yourself a diary reminder to check for better energy deals that may be available.
Taking a walkaround your business to see how energy is being used may help you to identify areas where you can save energy.
- Use a checklist so that you can make a note of what to look for and whether any action is required. The Energy Saving Trust has an energy walkaround checklist that you can use, or you can make your own.
- Carry out a walkaround at different times of day as energy consumption may be different. For example, one during business hours and one at the end of the day.
- Repeat walkarounds every quarter. This can help capture different approaches to energy consumption at different times in the year.
You may wish to consider a business energy audit where an expert reviews your business usage and can make suggestions on how to save energy. You will usually have to pay for this but contact your supplier to ask if they offer a free audit.
Regular meter readings
It is a good idea to check your meter regularly and to review your energy bills. Doing this will help you to:
- check the impact of energy saving measures you may put in place;
- ensure that you only get billed for energy that is actually used; and
- spot unusual consumption which may need investigation. For example, unexpected high consumption could prompt you to check whether you have a faulty appliance or whether a behavioural change in the workplace has resulted in higher energy use.
You may wish to consider a smart meter if you don’t already have one. Smart meters give you information about your usage automatically, without you having to read them. A smart meter may also help you to see where you need to make adjustments to reduce your energy costs. If you have a smart meter and get into debt with your supplier, they may be able to disconnect your supply without needing access to the actual meter. If you are interested in having a smart meter fitted, contact your energy supplier for more details.
Energy saving tips
An effective way for many businesses to cut costs is to save energy. Even small changes can result in big savings for your business. The measures below can all be put into place at little or no cost. Look through these tips to see if there is anything that may help lower your bills.
- Save up to 10% on your heating consumption by reducing your workspace temperature by 1 degree.
- Try to avoid heating while windows or doors are open. If it is cold, close windows and doors before turning on the heating. If it is hot, turn the down heating before opening windows or doors.
- Make use of heating controls and thermostats to ensure that heating is only used when needed. Remember to make necessary adjustments as your heating needs change, for example when the weather improves or when work patterns change.
- Keep cold air out by making sure windows and doors have been draught proofed.
- Turn off lights when they are not needed, including making sure that the last person to leave checks that lights are turned off.
- Make use of natural light. Check whether there is any furniture or other objects blocking light coming into your workspace. If there is, consider whether you could rearrange things to improve lighting.
- Consider whether timers or sensors may help. For example, timers could ensure lights are turned off at night and movement sensors could be used to reduce how long security lighting is on.
- Turn electrical items off at the plug at the end of the day, including computers and monitors. Leaving equipment on standby costs money.
- Use power-saving settings if they are available. For example, you may have a printer that can be set to go to ‘sleep’ if it has been inactive for a few minutes.
- In the kitchen, only boil the amount of water you need when making a cup of tea. If there are several tea drinkers in your workplace, making a round of tea will be cheaper than each person putting the kettle on separately.
- Keep warm air out by keeping fridge doors shut and by regularly inspecting door seals to ensure they are in good order.
- Store refrigerated products at the correct temperature. If it is safe to do so, increasing the fridge temperature by 1 degree will reduce the energy consumed by 2% to 4%. Fridges containing non-perishable product can be turned off when not in use.
- Avoid overfilling fridges as this prevents cool air circulating and can result in having to lower the fridge temperature to keep the stored product safe.
- If you have employees, encourage them to save energy too. The Energy Saving Trust website has free employee engagement resources to help you, including a guide on engaging employees and stickers and posters that you can use to encourage energy-saving behaviour.
The Carbon Trust has published the following free guides that provide more detailed energy cost saving ideas for business in different sectors.
- Energy saving for retail businesses
- Energy saving for the hospitality sector
- Energy saving for manufacturing businesses
- Energy saving for offices
The guides give information on low-cost steps you can take as well as some more expensive measures to improve energy efficiency and save in the long term. See the Ofgem website for information on grants and schemes that may help with the cost of improving energy efficiency for your business.