How Can You Reduce Business Energy Costs?



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The average UK business spends almost £4,000 on energy annually. Busineses can reduce both their outgoings and their carbon footprint by becoming more energy efficient.


Find out more about UK businesses and energy expenditure

In the past seven years alone, there has been a 100%+ increase in average business energy bills. For most SMEs, a hefty portion of profits are taken up with gas and electricity charges. The majority of UK businesses are using between 15,000 and 25,000 kWh of power per year. Annual consumption figures for large business and industry is far more, reaching in excess of 250,000 kWh.

The latest data shows us the effect this has on the bills, indicating that businesses in the UK are spending an average of £3,061 on their annual electricity bills, with a further £856 a year on gas. Small businesses in particular fare slightly better. The average electricity bill for an SME reaches approximately £2,958 (and that’s before putting business mains gas into the equation). A considerable outlay indeed.


Six top tips on how businesses can slash energy costs

The numbers reported above are sure to appear surprising to many employers, especially those which work at businesses with energy-intensive operations such as hotels and catering, healthcare and manufacturing. However, there are several ways that businesses can bring both their usage and prices down.

Flogas, specialists in gas mains installation, share some of their top tips on how companies can reduce their energy costs:


Knowledge is power!

Knowing how much energy you use and precisely what it’s costing you should be where you begin when trying to achieve lower energy prices. The average unit prices in the UK are currently 14.36p per kWh for electricity and 4.25p per kWh for gas, with standing charges on top of this. Finding out your business’s annual usage figures – and knowing when your contract is due to come to an end – means you’re well equipped to accurately compare your current supplier’s prices with others on the market.


Delve into your current contract

Ensure that you have the best contract setup possible for your business. This should be done regardless of whether you are planning to remain with an existing supplier or are considering a switch to a more appealing deal.

An extended fixed-term contract, for example, could help protect your business against future price rises, which will help to keep a handle on the outgoings. Alternatively, there might be an additional discount on offer if you opt for a Direct Debit payment plan.


Don’t be afraid to compare prices

Bills can rise as much as 100% if you choose to leave an existing tariff to roll over instead of checking how the rate compares to others. Keep tabs on the calendar and find out how much switching could save you ahead of your contract ending. Regardless of whether you use a broker, an online search or go direct, make sure you don’t limit yourself to the Big Six. Switching to a smaller business energy supplier could mean significantly lower bills, and benefits like better customer service too.



Whenever you’re investing in equipment throughout your firm, bear in mind the long-term energy performance of the items that you’re bringing in. Opting for energy-efficient, A-rated appliances can reduce outgoings significantly even after the increased initial cost.  Any equipment that helps you to save save energy on your everyday operations will pay for itself and more in the long run.


Consider a smart meter

Fitting a smart meter can be arranged by simply getting in touch with your energy supplier. That way, you’ll know exactly how much your business energy supply is costing you on a day to day basis. As you only pay for what you use, there’s no need for estimated billing or meter readings.

This will save your business when it comes to monthly charges and can also help you wise up to your company energy use and make better decisions on where you might be able to curb your consumption. dEnergy management software can also help provide useful insight for larger businesses.


Changing behaviours

Not every aspect of your energy usage can be changed but making alterations where possible will always benefit your financial outgoings. Even a small change in output can make for a huge annual saving. Simple measures such as making sure computers are switched off outside of office hours or putting your lights on a timer can make a huge difference. Encouraging employees to find more efficient ways of working is a great place to start, with some companies even introduce incentive schemes to help foster better habits, offering staff tangible rewards for greener behaviour.


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