Business energy costs: how can you slash your gas and electricity bill?

Energy costs can easily rack up your business bill. Nicky Bannister of Flogas Energy explains how to trim them down.

With the average UK business spending almost £4,000 a year on energy, there’s never been a better time for companies to take a good look at their gas and electric usage and find quick and easy ways to reduce their bills.

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.

Just how much are UK businesses spending on energy?

Thanks to changing usage patterns and government initiatives, rising energy prices mean average business energy bills have soared by over 100 per cent in the last seven years. For most SMEs, gas and electricity charges now make up a considerable chunk of their monthly outgoings – taking a hefty portion of their profits.

See also: How to take the uncertainty out of your business energy bills

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.

So, what does this usage mean in terms of 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.

“Rising energy prices mean average business energy bills have soared by over 100 per cent in the last seven years”

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.

How can businesses reduce their energy costs?

While the numbers might seem staggering – especially for businesses with energy-intensive operations like hotels and catering, healthcare and manufacturing – there are ways for savvy bill payers to bring their usage and prices down. Take these expert tips to slash your energy costs.

Become energy aware

The first step towards lower energy prices is knowing how much you use, and exactly what it’s costing you. 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.

Get an idea of your electricity meter to reduce energy costs

Do a price comparison

Leaving your existing tariff to roll over without checking how it compares to others could increase your bills by up to 100 per cent. 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.

Check your contract

Whether you stay with your existing gas and electricity supplier or switch to a better deal, it pays to make sure you have the best possible contract set-up for your business.

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.

Get a smart meter

Talk to your supplier about fitting 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.

Compare business energy deals with SmallBusiness.co.uk

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.

Change your behaviour

While some of your energy usage might be fixed, it’s likely there are some areas where you can make changes – and a small change in output can make for a huge annual saving.

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.

Invest to save

Keep long-term energy performance in mind when investing in equipment for your company, for example opt for energy efficient, A-rated appliances. 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.

Nicky Bannister is the head of Flogas Energy.

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Energy