6 Simple Ways to Reduce Your Business Energy Costs


Energy bills can end up being a big cost to your business, and costs are only likely to rise in the near future, so 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. Here's are 6 simple ways to reduce your business energy costs:

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Energy bills are on the rise

In the last seven years, energy bills have soared for businesses by 100%+ after government initiatives were introduced. 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 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.

How does this influence our bills? The latest data from the UK shows that businesses 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. In Ireland, the National Competitiveness Council publishes an annual report on the costs of doing business, the 2018 report says that costs in Ireland for electricity are tending to be lower than Euro average but higher than the UK. 

Recommended reading: 5 Top Tips for Managing Your Business Finances Better

6 Simple Ways to Reduce Your Business Energy Costs

There are plenty of ways for businesses to bring down their energy costs. Business mains gas supplier Flogas Energy shares some expert tips on how companies can slash their energy costs:

1. Be energy aware

If you want to reduce costs, you must know how much energy you are using and how much that is costing your business. 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 better equipped to accurately compare your current supplier’s prices with others on the market.

2. Shop around and compare energy prices

Have you considered checking out 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 big suppliers. Switching to a smaller gas mains supplier could mean lower bills.

3. Review your current contract

Always check the contract you have with your current supplier as this can direct you on what to look for when shopping around for a new 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.

4. Install a smart meter

Ask your energy supplier whether they can install a smart meter. 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.

5. Adopt new habits

There’s always areas of your energy use that you can cut down on,. 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.

6. Invest in energy efficiency 

For example, energy efficient lighting or when you next replace appliances that the business uses make sure these are energy efficient. 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 could pay for itself and more in the long run.

Keeping an eye on and managing your business energy costs is not only sensible for your bottom line but also responsible as a business owner to ensure we all contribute towards a greener economy too. 

Over to you now. What have you done to help reduce your business energy costs? We'd love to hear from you in the comments below. 


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