A guide to reducing your business energy costs

Research has suggested that the average business in the UK spends around £4,000 on energy each 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 gas supplier, Flogas Mains take a close look…

The cost of energy

The cost of energy can vary depending on the business and how much requires to be used. 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.

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.

Making savings

There’s a lot of money that can be saved if you decide to think smart with your energy supplier — not only will this allow you to make savings, but also invest in other areas of your business that you may not have been able to do before. Business mains gas supplier Flogas Energy shares some expert tips on how companies can slash their energy costs:

1. How much energy are you using?

If you want to make beneficial savings, it’s important to calculate how much energy you’re currently using. 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. Look at other suppliers and make a comparison

You may want to look at what deals other energy suppliers are offering their customers. 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.

3. Look over your current contract and make informative decisions

If you feel wronged by your current contract, you’ll now know what to look out for in prospective suppliers. 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. Asking your supplier for a smart meter

If you’re looking to make smart savings, you should make use of smart technology. 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. Changing your attitude towards energy use

You should carry out regular assessments to see how you are using your energy and come up with any solutions that could reduce the amount without compromising on productivity. Some companies even introduce incentive schemes to help foster better habits, offering staff tangible rewards for greener behaviour.

6. Making savings through investments

Keep long-term energy performance in mind when investing in equipment for your company, for example opt for energy efficient, A-rated appliances. You should also be considering the equipment type you use. 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.