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Cutting down on business energy costs

There’s no denying that businesses are now paying hefty energy bills — did you know that the average business in Britain forks out £4,000 a year? Becoming energy aware (and energy smart) can not only help businesses boost their bottom line, it can also dramatically reduce their carbon footprint – making for a more profitable, greener company all round.

Business spend

There have been a lot of government initiatives put in place to help businesses become more aware of their own energy use and spend. 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 in excess of 250,000 kWh.

Will this impact business 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.

Reducing the overall cost

There are a lot of industries that could benefit from reduced costs — think hospitality, catering and manufacturing. Nicky Bannister, Head of Business, at mains gas supplier Flogas Energy shares some expert tips on how companies can slash their energy costs.

  1. Are you aware of your energy habits?

Do you know how much your business currently spends on energy? 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.

  1. Have you considered using cheaper suppliers?

You can’t go wrong with shopping about for other energy suppliers. 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.

  1. Have you reviewed your current contract?

Make sure you’re paying the right price for what you use, and there’s no harm in shopping for a cheaper supplier. 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.

  1. Ask your supplier for a smart meter

Have you considered installing a smart meter in your office? 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 for larger businesses.

  1. Use your energy more wisely

You should look at using your energy more wisely to help cut down on costs. 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 tangible rewards for greener behaviour.

  1. Look at other opportunities

More businesses are investing in energy efficient appliances. Whilst 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.