Energy bills can be a big expense for small and medium-sized businesses (SMEs), and for many business owners, they’re becoming a growing financial concern.
Research from Flagstone, a UK online cash deposit platform, found energy costs are one of the biggest financial challenges facing SMEs, ranking ahead of labour, operating and material costs, as well as wider economic uncertainty.
SMEs were asked what they would most like to see from the chancellor in the forthcoming autumn budget. It found:
30% wanted support with energy costs.
This was second only to a reduced tax burden, which was requested by 43% of businesses.
37% of businesses said energy costs were among their top three financial challenges, making it the most commonly cited challenge in nine of the UK’s 12 regions.
30% cited economic uncertainty.
28% cited labour costs.
26% cited high operating costs.
25% cited material and stock costs.
There’s not much you can do about what the chancellor announces in the autumn budget on 28 October. But you can take steps now to reduce how much energy your business uses, and potentially bring your bills down.
Here are some changes you could make
1. Switch off equipment properly
Leaving computers, monitors, printers and kitchen appliances on standby overnight might seem harmless, but the costs can add up.
Encourage your team to switch equipment off completely at the end of the working day, rather than leaving it on standby.
You could also put non-essential equipment on timers so it automatically switches off outside working hours.
2. Check your heating and cooling settings
Heating and cooling can account for a significant proportion of your energy use.
As a general rule, avoid setting your heating higher than necessary. For offices, a temperature of around 19°C may be comfortable for many people, while cooling systems can be set to around 24°C or higher where appropriate.
Even a small adjustment to your thermostat can make a difference to your energy consumption.
Make sure you’re not heating or cooling empty rooms, either. If you have separate controls for different areas of your premises, use them.
3. Keep doors and windows closed
If your heating or air conditioning is running, leaving external doors open allows the warm or cool air to escape.
A simple ‘closed door’ policy could help reduce wasted energy in shops, offices, warehouses and other premises.
You could also consider automatic door closers if doors are regularly being left open.
4. Make the most of cheaper energy periods
If your business uses a lot of electricity, check whether your tariff offers cheaper rates at certain times.
If your operations allow it, you could schedule energy-intensive activities, such as charging vehicles or running certain machinery, during cheaper periods.
Check your tariff carefully first, though. A cheaper rate at certain times doesn’t necessarily mean your overall deal is cheaper.
5. Make it easy for staff to save energy
Your employees can play a big part in reducing energy waste.
Clearly label switches so your team knows which equipment can be switched off during breaks or at the end of the day.
You could also put simple reminders next to lights, equipment and heating controls.
Small changes become much more effective when everyone knows what’s expected of them.
6. Switch to LED lighting
If you’re still using old fluorescent tubes or halogen bulbs, switching to LEDs could reduce the amount of electricity you use for lighting.
LEDs are generally much more energy efficient and can also last longer, meaning you may save on maintenance and replacement costs as well as electricity.
7. Use sensors and timers
There’s little point keeping the lights on in an empty meeting room, toilet, storage area or corridor.
Occupancy sensors and timers can automatically switch lights off when nobody is using an area.
This can be particularly useful in parts of your premises that aren’t occupied continuously.
8. Get a smart meter
If you don’t already have one, ask your energy supplier whether you can have a smart meter installed.
Smart meters can provide more accurate information about how much energy you’re using and when you’re using it.
That can make it easier for you to identify unusual spikes in consumption and spot opportunities to cut back.
9. Look for draughts and air leaks
If your premises are poorly insulated or have gaps around doors and windows, you could be paying to heat the outside.
Check for obvious draughts and consider using weatherstripping around doors and windows where appropriate.
You should also check your insulation, particularly if you’re in an older building. Improving insulation can be a bigger investment, but it could reduce the amount of energy you need to heat your premises over the long term.
10. Maintain your heating and cooling equipment
Poorly maintained boilers, air-conditioning systems and other equipment can become less efficient.
Make sure you follow the manufacturer's recommended maintenance schedule and deal with faults promptly.
Cleaning filters and keeping equipment in good working order can also help it operate efficiently.
11. Check your energy bill
Don't simply pay your energy bill every month without looking at it.
Check your meter readings, unit rates and standing charges, and look out for anything that doesn’t look right.
If you’re receiving estimated bills, check whether your supplier can provide more accurate readings.
It’s also worth reviewing your tariff when your contract is coming to an end rather than automatically rolling onto a new deal.
12. Compare energy deals
Your current supplier might not be offering you the best deal.
When your contract is coming to an end, compare tariffs and check what you're actually paying per unit of energy and in standing charges.
A lower headline rate isn't necessarily the best deal for every business, so consider your actual energy usage and contract terms before switching.
13. Consider an energy audit
If your energy bills are particularly high, it could be worth getting a professional energy audit.
An audit can help you understand where you're using the most energy and identify areas where you could make savings.
You may also be able to use free online tools or advice services to carry out an initial assessment yourself.
14. Explore grants and support schemes
Before paying for major energy-efficiency improvements yourself, check whether you’re eligible for any grants or other financial support.
The schemes available can vary depending on where your business is based, the size and type of your business, and what you want to install.
For example, eligible UK businesses in certain sectors may be able to access schemes designed to reduce energy costs or support investment in energy efficiency.
Check the latest eligibility criteria before making any investment, as schemes and funding can change.
15. Consider generating your own energy
For some businesses, investing in renewable energy could reduce reliance on the grid over the long term.
Solar panels may be worth considering if you own your premises and have a suitable roof or other available space.
Other technologies, such as heat pumps, could also help some businesses reduce their reliance on fossil fuels.
These options can involve a large upfront cost, so you’ll need to consider the potential savings, installation costs, maintenance and how long you expect to remain at the premises before making a decision.
Don't overlook the small savings
You don't necessarily need to make a huge investment to start reducing your business's energy bills.
Simple changes, such as switching off unused equipment, adjusting your heating, preventing draughts and making sure you're on a suitable tariff, can all help.
The key is to understand where your business is using the most energy first. Once you know where the biggest costs are coming from, you can decide which changes are likely to make the biggest difference.
And if you're reviewing your energy bills, it's worth looking at your other business costs at the same time. You may find there are savings to be made across everything from insurance and banking to telecoms and other regular expenses.
