Businesses feel the heat with rising energy costs

Posted on 22 Sep 2018 and read 837 times
Businesses feel the heat with rising energy costsMost businesses are familiar with trying to keep costs down and profits up. As average UK business energy costs hit £4,000 per year, now is the time to take a look at gas and electricity bills to see if there are potential savings to be made, both in money and in energy usage.

Businesses have suffered a 100%+ increase in energy bills over the last seven years, and for most SMEs gas and electricity charges now make up a considerable chunk of monthly outgoings – eating into profit margins.

According to figures released by, the majority of UK businesses are using between 15,000 and 25,000kWh of power per year, but annual consumption figures for large business and industry can be in excess of 250,000kWh.

Businesses are spending an average of £3,061 on their annual electricity bills, and an additional £856 a year on gas.

Small businesses 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 on-cost.

Energy costs reduction

If a business is in an energy-intensive sector, such as manufacturing, these numbers can seem very worrying.

Business mains gas supplier Flogas Energy shares some expert tips on how companies can slash their energy costs:

1. The importance of energy awareness

To begin with, establish what you’re using and at what cost. 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 are well equipped to accurately compare your current supplier’s prices with others on the market.

2. Check the price against others

Leaving your tariff to just roll over can cause it to increase 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.

3. Examine your contract

It doesn't matter if you're switching or staying, the contract needs to work for you.

For example, an extended fixed-term contract for your gas installation 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. A smart move

Speak to suppliers regarding a smart meter. That way you’ll know exactly how much business energy supply is costing 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. Shifting behaviour, saving money

Take a look at energy usage and see what behaviours you can change to lower usage. It could be as simple as making sure computers are switched off outside of office hours, or putting lights on a timer, but encouraging employees to consider 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.

6. The power of investments

Investing in A-rated, energy efficient appliances is one way to see bills and energy use improve.

While this approach might come with a heftier price tag in the first instance, any piece of kit that helps save energy on everyday operations will pay for itself and more in the long run.

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