The average UK business energy cost is £4,000 per year, but just like with your home bills, you can hunt around for ways to lower your costs. By becoming more aware of your energy expenditure, you can reap the rewards both in saving money as well as reducing that all-important carbon footprint. This makes for a more environmentally friendly, and more successful company.
Current spends
There’s been many factors at play in the rising energy costs, but the resulting 100%+ increase in the last seven years has hit firms hard. 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.
How has this changed 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.
Lowering energy costs
These figures can be quite alarming, but there are methods of keeping your costs low. Business mains gas supplier Flogas Energy shares some expert tips on how companies can slash their energy costs:
- Being energy aware
Firstly, you need to know what you’re 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.
- Compare the price
You should never leave your tariff to just roll over year on year, as this can see your prices rise by up to 100%. 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.
- Review your contract
Switch or stay, you’ll still want to make sure the contract works for your company. 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.
- Opting for a smart meter
Ask your electricity and gas mains supplier about getting 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.
- Behaviours that cost
No doubt there’s areas of excessive energy use that you can look at changing. 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.
- Consider investments
Energy efficient appliances might be a cost in the short term, but they pay off in the long term in financial and energy savings. 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.
*Statistics from BusinessEnergy.com
