How to Cope with Rising Utility Bills in Your Business

Rising energy costs are the most pressing issue for small businesses in the coming year, ahead of Brexit red tape, supply-chain disruption, and even the ongoing impact of the Covid-19 pandemic.

As per the Federation of Small Businesses (FSB), rising gas and electricity bills are the most pressing challenge for more than half of them, which could pose an existential threat to many firms.

Why are utility bills rising?

The rise in energy bills has been attributed to several factors. For starters, increased demand for energy has been placed on the global supply due to a freezing European winter in 2020-2021 and a hot summer in Asia in 2021.

This, combined with Russian gas export restrictions, has exacerbated the problem, resulting in a significant increase in wholesale energy prices. Between January 2021 and January 2022, the price of gas increased by 250%.

In response to rising wholesale prices, Ofgem, the UK’s energy regulator, is raising the price cap on household energy bills by 54% in April 2022. This is expected to continue until October 2022 unless global wholesale prices fall, which appears unlikely given the current demand.

Energy-saving strategies for your business

However, avoiding higher tariffs will be difficult once firms need to arrange a new contract. Instead of renewing with your current supplier, it still makes sense to shop around for the best deal-and a specialist broker may be able to assist – but prices are rising across the board.

In that case, how can small businesses protect themselves? To save money on your utility bills, consider the following suggestions:

  1. Utilize available government assistance.

While the Chancellor has not announced any specific support for businesses, local councils have a variety of regional support schemes available to help fund energy efficiency measures.

For example, the SME Energy Efficiency Scheme (SMEES) provides fully-funded energy efficiency audits, expert advice, and online resources and workshops to businesses in Tees Valley.

Businesses in the region can also apply for capital grants to help fund projects that reduce greenhouse gas emissions and energy consumption, with grants covering up to 45% of upfront capital project costs ranging from £10,000 to £100,000.

  1. Reduce your consumption.

There are numerous things that business owners can do to reduce their energy bills at their workplace, including:

  • Lowering thermostats
  • Using energy-saving equipment and led lighting
  • Installing sensors to ensure that lights in rooms and corridors turn off when they are not in use
  • When not in use, turn off pcs and office equipment.

Businesses can also consider installing solar panels and insulating roofs and walls, and conducting an energy audit to identify quick and easy energy and cost savings.

Encouraging employees to be alert and practice energy conservation is an excellent way to cut costs. Educate everyone on the importance of energy conservation so that they can save money.

  1. Consider changing your energy provider to get a better deal.

Switching suppliers may be one way to reduce your energy bill costs despite price increases. There are no price caps in the commercial sector, but suppliers can offer new customer discounts, which can help offset the price increase in commercial energy tariffs.

Utility Bills in Your Business

  1. Purchase energy management software.

If your company is large enough and managing energy is proving difficult, it could be time to invest in energy management software. Energy management software can assist you in becoming more energy efficient by identifying weak points in your business. You can also set alarms in specific areas to receive updates when you use too much energy with the right software.

  1. LEDs should be used instead of incandescent bulbs.

Many businesses have already switched to LED lighting. However, some people still need to take advantage of huge savings. Replacing incandescent lightbulbs with LEDs is one example of how saving a little bit here, and there can make a big difference in your energy bills!

LED lighting consumes 75% less energy than incandescent lighting. Furthermore, unlike halogens and incandescents, LED bulbs do not burn out, which means that with normal usage of six to eight hours per day, LED bulbs can last up to 15 years!

  1. Enhancements to energy efficiency

It may appear to be a simple solution to combat rising energy prices, but because your business’ bill is likely to be calculated on a price per unit of energy used, using less energy will result in a lower annual bill.

Reducing energy consumption is already an essential topic of discussion in sustainability and environmentalism, with increased energy efficiency associated with lower carbon footprints of organizations. In addition to being better for the environment, becoming more energy efficient will benefit your company’s bottom line.

  1. Check with your energy provider to see what assistance they can provide.

Many energy suppliers, like the government, will offer schemes or grants to help you improve your energy efficiency. You may be eligible for subsidies on the upfront costs of energy-efficient equipment, or you may be able to claim from a business hardship fund if one is available.

To spread the cost of your energy bills over a longer period, you may set up a payment plan or pay in smaller installments. It’s worth creating a budget to determine what kind of payment plan is feasible for you, then contacting your energy provider directly to see what assistance they can provide.

Wrapping It Up!

Many businesses pay their energy bills without hesitation. However, with energy bills skyrocketing recently, there has never been a better time to consider lowering business energy costs.

Energy prices are still rising. While business energy management can be complex, your company’s operating costs will skyrocket if you don’t take it seriously. Specific energy management measures can be costly and challenging to implement.

However, there are numerous simple ways to reduce business energy costs. This list should have given you some ideas on how to save money for your business. Best wishes on your energy-saving journey!