The 9 Best Ways for Businesses To Reduce Their Energy Costs

The UK is in the middle of an energy crisis. Halfway through 2022, energy regulator Ofgem has raised the price cap by 54%, and is expected to increase it by a further 46% in October, pushing many households into fuel poverty.

These energy prices could also be the breaking point for a lot of businesses – many of which have already had to endure two years of instability during the pandemic.

According to business comparison website Bionic, the average small business consumes 15,000 kWh–30,000 kWh for gas and 15,000 kWh–25,000 kWh for electricity annually. This means, with the latest energy cap prices, the average small business will spend £1,575 for gas and £5,600 for electricity each year.

Worried about how your business will stay afloat with these prices? Before you panic, check out our top tips on how to reduce your energy costs.

1. Carry out an energy audit

Before you crack on with any energy-saving tasks, start by sussing out which areas of your business are actually wasting energy.

An auditor will highlight any potential changes you can make around the business by reviewing your business's gas, electricity, and water tariffs. They’ll also provide a business consumption analysis and recommend how you can improve your energy management.

Some energy companies will even offer an audit free of charge, so make sure to shop around for deals.

2. Consider remote working

If your business is office based, it’s worth introducing the opportunity to work from home. Not only will this reduce your business’s energy bills, but will also help with work-life balance.

Some companies have even decided to go fully remote post-pandemic, meaning they no longer have to pay any energy bills to power offices.

Remote working will also reduce your company’s carbon footprint. In fact, one study discovered that working from home can reduce the average person’s CO2 emissions by anything between 17-60%, depending on the distance travelled and the method of transport.

If fully remote work isn’t an option for you, why not consider offering a few days working from home? This way, employees can have a more flexible work-life balance and your business can cut back on commuter emissions.

3. Replace lightbulbs with LEDs

Although they’re a bit pricier, LEDs have an average lifespan of 25,000 hours, compared to an incandescent bulb’s 750 hours. This means every LED you purchase will save your business more than 33 incandescent bulbs.

You’ll also get through much less energy with LED lights since they’re about 30% more efficient than fluorescent lights.

Want to go the extra mile? Look into getting sensory lights like many office-based companies are doing in the UK. Lighting a room with no one in it will only lead to higher bills and unnecessary emissions.

4. Purchase energy-efficient office equipment

There are lots of energy-guzzling gadgets around the office – whether it’s laptops, computers, photocopiers, or printers.

If these electrical appliances have poor energy ratings, they’ll waste more energy whilst running and could cost your business a fortune. To avoid this, replace any old, worn-out appliances with new, efficient ones.

In Europe, all electrical appliances are graded based on their efficiency, which is determined by the amount of energy the device uses each hour. The lower its consumption, the better the grade – ‘A+++’ being the best, and ‘G’ the worst.

Generally, the more efficient the model is, the pricier it’ll be – but you’ll make your money back on energy savings. Efficient products also typically last longer than inefficient models.

Want to learn more? Find out which appliances use the most electricity.

5. Look into smart thermostats

It takes a lot of energy to heat a building, especially large open-plan spaces.

One simple but effective way to avoid high heating costs in your workspace is to install a smart thermostat, which can be controlled with a remote, internet-connected device.

Having this level of control over your heating means you can schedule your heating without having to trek to your thermostat every time you need to adjust it.

As well as being able to automatically pause a heating schedule when you leave the office, some systems can even identify when you should turn down the heat to save money. Scottish Power suggests that a smart thermostat could cut your heating bill by 14% – all for the affordable price of £160–£200. However, the amount you save will depend on how much you utilise this helpful tool.

6. Make sure your workplace is well insulated

If your business is housed in an old building with no insulation, you’ll be getting through a huge amount of energy to keep warm – no matter how efficient your heating system is.

Without a layer of wall and roof insulation, any warmth generated by your heating system will escape. This will mean employees will reach for the thermostat more frequently, pushing your bills even higher.

To avoid this, you’ll need to fit wall and roof insulation as the bare minimum – if you want to go further, consider pipe and floor insulation too. The cost of this will vary a lot, depending on the size of your office and the type of insulation material you go for.

Want to learn more about insulating your business building? Check out some of our helpful insulation guides.

7. Install solar panels

Installing a set of solar panels for your business could lead to a 60–70% reduction in energy bill costs. You might even be able to generate enough solar energy to cover all of your energy needs if you have enough panels.

Of course, you’ll have to invest a lot of money into your solar panels to make this possible, which isn’t always an option for some businesses – especially smaller ones. For context, if your company consumes 16,225 kWh of electricity a year, you’ll need at least 30 solar panels, which will cost roughly £11,400.

Thankfully, the government offers various region-specific grants to help businesses buy solar panels. For example, the Low Carbon Workspaces grant provides support of up to £5,000 for businesses in Buckinghamshire, Berkshire, Hertfordshire, Northamptonshire, Bedfordshire, Luton, and Milton Keynes.

And businesses looking for solar panels in Dorset get an even better deal – with the Low Carbon Dorset scheme offering a grant of up to 40% of project costs, between £5,000–£250,000.

8. Switch to an electric fleet

This point might sound a little counterintuitive, as you need to use electricity to power these vehicles, but switching to an electric fleet could save you a lot on bills.

The cost of running a petrol or diesel fleet has reached an all-time high – with some fuel stations in London now offering petrol for £2 a litre. But you can avoid these costs by getting an EV fleet, which is three times less expensive to run than the average petrol-run fleet.

Electric cars also require less maintenance than an internal combustion engine (ICE), which will save you thousands of pounds in the long run.

However, the initial cost of getting an EV fleet will be steep. The average cost of an electric car in the UK is around £44,000, but prices can range from £17,350 up to £138,000.

9. Install electric vehicle chargers

Considering swapping to an EV fleet after our last point? It’s worth installing workplace chargers whilst you’re at it.

Of course, you can use public charging stations to top up your vehicles – but it’ll cost you. This is because public charging stations are run by third-party companies, which need to make a profit. On average, it’s 7p per mile more expensive to charge in public as opposed to at home/work – or £511 per year. 

So why not cut out the middleman and get your energy directly from its cheaper source?

Installing chargers might sound costly, but you can do this affordably through the government’s Workplace Charging Scheme, which can cover as much as 75% of the costs – or up to £14,000 on 40 charging points.

Summary

Hopefully you feel less daunted about how the recent energy crisis will impact your business. Once you’ve sussed out the areas of your business that need improving, it’s time to make some changes.

It’s also worth getting your employees involved in this process too – after all, if they aren’t being smart with their energy consumption, it’ll be pretty pointless.

You’ll soon be on your way to a greener, more efficient business space.