How to reduce business energy bills?

Businesses can expect to face a steep rise in energy bills after the government today published a comprehensive plan to cut greenhouse gases and end Britain’s dependence on risky oil and gas imports.

Although the individual policies had previously been announced in the coalition policy agreement or by ministers – and many were formerly Labour government initiatives – Chris Huhne, the energy and climate secretary, said the first annual energy statement provided more detail and a timetable for each move from consultation to legislation.

However there are various measures a business can take to reduce its energy bills:

It pays to shop around

As the research (SME Energy Survey 2010, UK) revealed, there is a certain inertia amongst small businesses that sees so many of them settling for paying high bills. Good deals do exist and so it pays to shop around, in much the same way as you would for any other service to your business, from sourcing a plumber to choosing a bank.

Switching supplier

It sounds obvious but what better way to lower your bills than by choosing another supplier offering a better deal. Many small businesses have used the same supplier for a number of years and have not considered changing, perceiving costs across the suppliers as broadly the same, so why change?

This is not the case and many offers across the different suppliers are competitive. In some cases, some suppliers are offering better deals for new customers to attract new business, whilst their existing loyal customers are paying more, so it’s worth checking out what deals your supplier is offering new customers and how this compares to what you are paying.

Read the small print in your contract

A key finding of the survey (mentioned above) is that business customers are simply not reading the small print in their electricity contracts, perhaps perceiving their supply as ‘just another bill’ that gets paid each month. Many just don’t know if they are in a contract and most businesses would find if they read the terms and conditions that they are on an ‘evergreen’ contract, which means that their contract is automatically renewed unless broken by the customer.

This is standard practice across the industry, however, cancellation notice requirements fluctuate widely and customers can find themselves with a very small window of time to make a switch. So, it pays to know the notice period on your contract in addition to the length of your current contract.

Choose a service that suits your business

Businesses have different priorities to consumers when it comes to paying for energy and this is reflected in the services offered by energy suppliers. Some suppliers know the issues facing by small businesses and are offering smaller scale contracts with monthly budget planner that will keep the businesses cash flow firmly in control with their owners.

Become more energy efficient

Whatever the size of your business, protecting the environment is a responsibility we all share and it can also be a way of saving money and reducing expenditure on electricity. Some quick and easy ways to save energy and therefore reduce electricity bills include:

• Spend some time to develop a simple energy policy and communicate this across the business. This should include clear targets and timeframes and be the responsibility of the whole business to implement.
• Lighting represents a significant proportion of the average electricity bill. Use daylight wherever possible, switch off lights when not needed and replace older 38mm (T12) fluorescent tubes with 26mm (T8) types.
• Wherever possible switch off computers when not in use and configure the energy saving features on IT equipment.
• Ensure that your heating and air conditioning systems are running efficiently and for heating set the thermostat at 19 degrees – costs rise by 8% for every one degree increase.