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 small business spending over £3,500 on energy last year, 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 over the past decade. With many competitive providers going bust as a result of rising wholesale providers, businesses have been shunted to providers with less favourable tariffs. 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 average UK small business used 35,000 kWh of power in 2020, but annual consumption figures for large business and industry can reach averaged 155,000 kWh.

Micro businesses, as you can imagine, fared better with an average bill of £1,735.

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. Your cost will be affected by the number of people in the building, the type of work you do and the average cost of energy per unit.

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, find the best one for your business’ needs.

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

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.

Read more

Driving energy transformation with smart utilities

7 electricity suppliers for small businesses

Avatar photo

Anna Jordan

Anna is Senior Reporter, covering topics affecting SMEs such as grant funding, managing employees and the day-to-day running of a business.

Related Topics