It's not just residential properties that are facing big increases in the costs of gas and electricity. For millions of businesses across the country, the impending energy prices are a cause for concern too. But the good news is that there are ways to offset them, according to Dale Smith, owner and director of Grey-Smith Legal.
If you rent or own a commercial property, now is the time to plan how you will manage the energy price increases. While households face a huge 80 per cent rise from £1,971 to £3,549, businesses are not protected by the cap, so do not have a limit on their tariffs. Some UK pubs have already been presented with energy bills of tens of thousands of pounds, which is simply unsustainable for many. Commercial properties tend to have consistent energy requirements, whether it’s for air conditioning, heating, lighting or computers. With these energy needs, expensive bills may seem inevitable, however, there are still steps businesses can take to lower their gas and electricity costs.
Analyse your costs
Before attempting to cut costs, it’s a good time to be smart about your cash flow and understand where you are spending your money, especially when it comes to gas and electricity. Part of this will come down to understanding the numbers on your bill. If you aren’t completely sure about how you are charged for your electricity, make this a priority – it may raise issues you didn’t know were happening. This is especially important for those renting commercial spaces who often receive a flat service charge along with the rent. This could mean you are absorbing costs from elsewhere. Businesses have a right to be metered and to have visibility of these meters, so make sure you’re taking advantage of this.
Control what you can
This will be the quickest and easiest step you can take. By dropping the heating in your commercial property by just one degree, you could save up to 10 per cent on your gas consumption. Your employees probably won’t notice the difference if the office is 20 degrees rather than 21, but your bottom line will.
Lighting is also an area to address as it usually accounts for around 20 per cent of the bill. Changing your lighting to LEDs is simple but effective and could save you a significant amount of money.
Get smart about your energy
Installing a smart meter will quickly and accurately give you an overview of where your money is going and at what times you are using the most. Most energy bills have a traffic light system, with red showing the most expensive time to use energy and green, usually overnight, being the cheapest. It usually costs more to use energy around lunchtime and early afternoon when there is the most strain on the infrastructure. If possible, reduce your energy use at this time. You could trial flexible working, extended lunch breaks or turning off any TVs around the building. Switching everything to eco mode will also reduce the amount of electricity and gas your business is using; for example, a dishwasher in eco mode saves around 30 per cent.
Find the best deal
Although prices are high across the board, it is still a competitive market so you may be able to reduce the amount you are paying if you’ve been with a supplier for a long time. If you have 12 months or less on your energy contract, shop around to compare and secure the best rates. It’s vital to keep as much cash in your business as possible and control your expenditure where you can. That means working out where you are spending the most, reigning it in and identifying the most profitable areas. Although the energy price rises will affect every business across the board, there are ways to make them more manageable.