Under the January to March 2024 energy price cap, global energy prices reached an average of £1,928 per typical annual bill, the House of Commons has revealed. That’s nearly 60% higher than the previous winter.
As we enter Spring, energy price caps are set to fall to their lowest level in 2 years. But for small businesses where every penny counts, what else can you be doing to save on energy and reduce your utility bill further?
In this article, we’ll share our top energy-saving tips for small businesses. From reviewing your tariff to hiring serviced offices, we go over the key ways that your business can reduce its energy consumption and keep these expenses as low as possible. Let’s get started.
The best place to start is to understand how much you currently spend on energy. Whether you have an office with employees, or work from home, check your recent energy statements and make a note of your business gas and electricity usage, the unit price per kilowatt-hour (kWh), standing charge, and total monthly cost.
Next, find out if you’re on a variable or fixed tariff - this may make a big difference to how much you pay over a given period. If you’re on a variable tariff, your unit price per kWh will change as wholesale prices fluctuate. If you are on a fixed tariff, your unit price will remain the same for the duration of your fixed period.
Depending on your energy provider, they may also be able to give you an estimated monthly cost based on your historical usage and current tariff. If this service is available to you, it’s worth utilising for a quick and easy energy audit.
For certain companies, an energy audit is mandatory via the government’s Energy Savings Opportunity Scheme (ESOS). This concerns you if:
If your organisation qualifies for the scheme, you must submit an assessment of your business energy consumption to the Environment Agency every 4 years. This is a useful way of staying on top of your energy usage, keeping an eye on your outgoings, and helping you identify efficient ways to reduce your carbon emissions and save energy.
Whether your company participates in the ESOS or not, it’s important to conduct an energy audit regularly, to understand where your biggest expenditures are. It will also allow you to identify energy-saving opportunities for your business.
Once you know your average energy expenses, it’s useful to check if you’re in a good position to switch to a fixed tariff (if you’re currently on a variable one). To do this, you’ll first need to check your current contract. The most common business energy contracts are:
Your options regarding switching your tariff may be limited to the type of energy contract you’re on. If you’ve just entered a new one or are mid-contract, for instance, you might face early exit fees by changing your energy tariff.
If that’s the case, check what those fees are and evaluate if it’s cost-effective to pay them and switch. Otherwise, if you’re coming up to the end of your contract and are in a good position to consider a new tariff, this is where the biggest cost-saving potential lies.
To check if it’s worth switching, trusted comparison sites offer tailored comparisons and suggest the most suitable suppliers, to help you get the best deal for your business.
If you don’t have a commercial office and your company operates from home, you’ll need to establish the difference between your household energy use and business energy use, as the rates will vary between them.
To qualify for business tariffs, more than 50% of your home’s energy usage must be used for business purposes. Otherwise, you should compare domestic energy deals.
One simple way that you can save energy and cut costs is to turn the heating down. There’s no need to work in the freezing cold, but turning your office or home thermostat down by just 1°C could save you up to 10% a year in utility costs.
Remember, if the temperature drops outside, there’s also no need to up the heating indoors - your thermostat will adjust and heat your workspace to the set temperature.
Another way to adjust your heating is to make small tweaks to your boiler. If you have a combi boiler (without a water cylinder), it’s worth checking its flow temperature, as this is often set higher than needed.
If it’s between 70°C and 80°C, you could be overpaying for heating. Turn it down to 60°C and you could cut your gas bill by an annual average of 3%.
If you have a non-combi boiler, you can still reduce your gas bill in the same way. With this type, however, the flow temperature generally needs to be a little higher, so bring it down to 70°C if it’s above that.
To be on the safe side and make sure you make the right adjustments to your boiler, it’s best to consult a gas and heating engineer.
Once you’ve set an optimal temperature, it’s important to retain heat and avoid energy waste. The best way to do this is to check your building's insulation and make any necessary improvements.
You should check that:
Keeping the heat that you’ve paid for and maximising it is one of the best ways to make your money go further and use heating efficiently. When running insulation checks, it’s essential to consult a professional who can make the right assessments and offer the best solutions for your business needs.
If you don't have LED light bulbs installed in your office already, it may be worth switching, to help lower your energy consumption. LED bulbs are not only cost-efficient, but they are also cheaper to run than traditional light bulbs, safer, use less energy, and last considerably longer.
The UK’s largest LED specialist, LED Hut, explains that replacing a 60W halogen light with an equivalent 9W LED bulb reduces your energy consumption by 85%. It also lasts ten times longer. The results are similar when replacing a 60W halogen bulb with an 11W CFL; energy consumption drops by 18% and lasts twice as long.
So, how much money can your business save by switching to more efficient light bulbs? The easiest way to find your price difference is to use a savings calculator.
Simply enter your current light bulb type, its power (wattage), how many there are in your commercial space or home office, and how many hours a day they are in use. You’ll then see how much you could save by opting for more energy-efficient lighting options.
Finally, it could be worth looking into motion-activated lights for your office. They are useful in bathrooms, storage rooms, and other areas that are not in constant use, to keep energy waste to a minimum.
It may sound obvious, but turning office equipment off at the end of the day could significantly reduce your business' energy bill. You could save around £35 a year per single computer, simply by putting the desktop and monitor into standby mode, and even more if you turn it off completely.
Let’s say you have 50 employees, each with their own computer - that’s over £1,750 a year saved just by turning them off when not in use. Other office equipment that you save money on by switching off when not needed includes printers, copiers, and water coolers.
Likewise, when you buy new equipment for your staff or workspace, it pays to choose the most energy-efficient products. When it comes to electricals, take note of their Energy Star rating to see how efficient they are.
Efficiency is normally categorised A to G, ‘A’ being the most efficient and ‘G’ being the least efficient. The rating is typically based on the size of the item, so naturally a fridge or TV will cost you more to run than a laptop.
Similar to LED light bulbs, it’s more cost-effective to choose a slightly more expensive option, if it’ll save you money in the long run. Let’s look at PC monitors, for instance.
Nowadays, there are plenty of C and D-grade PC monitors that come with built-in power consumption regulators, such as automatic brightness adjusters and colour quality support. The initial price tag may be a little higher than the equivalent G-grade monitor, but over the course of a year, you could save hundreds just by making more energy-conscious choices.
Lastly, don’t forget that office equipment is an allowable business expense. Whether it’s computers, printers, phones, or other stationery, you can claim relief on all the equipment needed to run your business effectively via your Self Assessment tax return.
A simple yet effective and eco-friendly way that your business can save energy is to reduce the time spent in the office.
According to a study by Moneyzine, the average employee costs businesses £418.60 per year just through their work appliances. The associated energy cost that comes with having staff in the office full-time is around £2,700 per year.
By introducing a hybrid working model where employees (those who are able to do their jobs effectively from elsewhere) spend part of the week working from home, small businesses could see a considerable saving of over £40,000 a year.
If you don’t already have flexible policies in place and are unsure if it’ll work for your team, it might be worth doing a trial run of 1 or 2 remote days a week. A trial is a good way to see whether hybrid working is suitable for your company culture and productivity, as well as seeing just how much energy you could save on a permanent basis should you reduce your team’s office days.
Our final energy-saving tip is to hire serviced offices or meeting rooms. If you currently work from home, it could be more cost-effective to utilise a professional workspace as and when you need it, thus reducing your business' energy bills.
See also: Key benefits of using a serviced office
See also: Benefits of hiring a meeting room for your business
See also: How to host effective meetings
At 71-75, you can enjoy professional, modern, and sustainable serviced offices and meeting rooms to suit your needs. All workspaces run on 100% renewable energy and are complete with a range of amenities, such as a kitchen, air conditioning, and shower rooms.
Whether you’re organising a collaborative session with your team, or meeting with an important client, our serviced offices and meeting rooms have everything you need, without the need to worry about energy costs.
So, there you have our top energy-saving tips for small businesses. Start by running an energy audit to get clarity on your spending and saving opportunities. Then, follow our guide to find and apply effective cost-cutting solutions.
We hope you found this article useful. Thanks for reading.
