Make a start and reduce the impact of rising energy costs

High prices for gas and electricity are increasing running costs for small businesses across the UK. Find out about actions to take to quickly reduce costs, what to consider in the longer term, and what support is available.

Contents

  1. Monitor your energy usage and contract
  2. Save using low or no cost measures
  3. Invest in long term energy savings
  4. Generate your own energy
  5. Find finance and support

Monitor your energy usage and contract

Start saving money by monitoring your consumption and how much it costs according to your contract.

This is important if you don’t regularly monitor usage or haven’t looked at your energy deal in some time.

Install a smart meter

Ask your supplier about installing a smart meter if you don’t have one already. You can get one installed at no direct cost to your business if you’re eligible.

Smart meters provide real time information on energy consumption. They can also send alerts when you reach certain usage thresholds.

Getting a smart meter means you can access a wider range of energy deals, including ‘smart tariffs’.

Check the OFGEM website for more guidance on smart meters.

Sub-meter high usage activities or equipment

Sub-meters measure the energy usage of a business activity, area or type of equipment. 

You can use sub-meters to identify which parts of your business are the most costly and where you can save.

Simple models that monitor electricity cost as little as £20. These are good for measuring individual appliances or outlets. Basic commercial gas meters start around £200.

To get more accurate data, several companies offer customised services that:

  1. Analyse your energy usage
  2. Install multiple sub-meters
  3. Link the meters to monitoring software
  4. Help you set targets for savings

Make someone responsible for your energy programme

You should assign your energy management programme to a particular job role or working group, depending on the size of your business.

This helps make energy savings a business priority and ensures long-term action despite staff turnover.

Switch off a default energy tariff

You might be on a ‘default’ energy tariff if you have a new business premises or your last contract ended without a renewal plan.

Your energy cost is often highest under this type of deal. Check if your supplier allows switching to a cheaper plan and if a notice period is required.

Learn more about switching your business energy on the OFGEM website.

Stay on your current contract if it has favourable terms

You are unlikely to get a lower price from a new plan or supplier if your current deal is fixed at a good price.

Stay on your current contract for as long as possible. Check if there are renewal provisions and when your contract price is set to expire.

Shop around if your contract is expiring soon

You should shop around for a new business energy contract if your current deal is expiring soon and you don’t plan to renew it.

Suppliers may roll you on to a more expensive default plan if your deal expires and you have not given notice of a renewal or planned switch.

Check the OFGEM website for advice on how to compare suppliers. Help can include hiring an energy broker.

Save using low or no cost measures

Many energy savings measures need little or no financial cost.

Build substantial savings by spending time and attention on behavioural changes and smaller-scale investments.

According to a GOV.UK energy saving guide you can reduce your monthly heating bill up to 8% for every 1°C you reduce the average temperature.

Set your heat lower

Set your thermostats, if can be adjusted by room or activity levels, to:

  • 19 to 21°C where people are idle
  • 16 to 19°C where people are active
  • 16°C in any room when nobody is on site

If you have a single thermostat for your entire premises, set it to the lowest comfortable temperature for the hours people are at work. 

Programme it to go down or switch off after hours, or set a reminder to do it manually.

The Health and Safety Executive suggests the minimum workplace temperature should be 16°C, but employers can decide what levels are best for comfort and productivity.

Check the Carbon Trust’s Heating and Ventilation guide for more help with temperatures for your business type and activity levels.

Your business must decide what level is best for comfort and productivity as there is no legislated maximum workplace temperature in the UK.

Avoid overcooling

To avoid overcooling, set your air conditioning to the highest comfortable temperature for the hours people are at work. 

Studies on office workplaces have shown that productivity starts to go down once temperatures exceed 24°C. 

After business hours you can let indoor temperatures rise as high as 29°C. This is the maximum to avoid heat and humidity damage to your premises.

Create a temperature ‘dead band’

To prevent competition between your heating and cooling systems, set your thermostat to create a gap between one switching off and the other coming on.

This gap where no heating and cooling is needed is called a ‘dead band’. For example you could set your heating to shut off at 20°C and cooling to come on at 24°C.

A 2016 study showed that a 4°C dead band resulted in an average of 12.7% savings on heating and cooling energy.

Get a smart thermostat

Smart thermostats control your heating and cooling systems through a digital display or app on your phone. Use smart thermostats to provide more flexibility to control and schedule temperatures.

You can program a schedule manually or set it to learn when you’re present and adjust automatically. Many have energy saving modes that will set temperatures to the limit you’re comfortable with.

If setting it manually, start by adjusting the average temperature in small increments. Most models will allow you to adjust by .5°C

Smart thermostats are getting cheaper. Basic models start around £100. You might be able to install a smart thermostat without hiring anyone if you have a basic heating and cooling system.

For businesses that use expensive machinery and equipment, it’s important to make it run as reliably and efficiently as possible.

Do regular operations and maintenance checks

Keeping your building equipment and systems in good working order keeps running costs down. It also reduces the risk of equipment failure and unscheduled down time.

You may be able to do easier tasks like cleaning or replacing filters. Call a technician for tasks such as tune ups, calibration and programming coordination between different equipment and systems.

Check the Energy Star website for more detailed advice on operation and maintenance.

Move your thermostats

Draughts or heating and cooling sources won’t work properly if thermostats are affected by sunlight.

You should install thermostats on interior walls away from radiators, vents, windows and doors. This avoids the heating or cooling switching on when it’s not needed.

Install a wireless control system to avoid the expense of running wires to new locations if your current thermostats are hardwired to your heating and cooling system.

Wireless control systems use a ‘receiver’ that’s wired to your heating and cooling system. The new thermostat then wirelessly connects to the receiver to switch the system on and off.

Simple thermostat and receiver bundles cost less than £100. You can usually install them yourself. Larger premises with complicated systems will cost more and require professional installation.

Draught proof doors and windows

Older doors and windows can be a major source of heating and cooling loss in a building. Make sure seals and draught proofing are in place and working properly.

Make sure your premises is as efficient as possible by:

  • sealing and weather-stripping around windows, doors and ductwork
  • fitting exterior doors with spring-loaded or automatic closures
  • using PVC strip curtains between spaces with different temperatures

Check the Energy Savings Trust advice on draught proofing for more details.

Install overhead fans

Overhead fans save on heating by recycling warm air to the ground where it is needed. In summer they can save on cooling by moving the air to create a breeze. This can make a room feel up to 2°C cooler.

Using overhead fans means you can run heating and cooling systems less often. According to a US study, this can save up to 15% on commercial energy bills.

Not every workplace is suitable for overhead fans. They need enough clearance from the ceiling and ground level to work well. Premises with vaulted or double height ceilings are most suitable.

You also need to make sure the speed and air movement rating of the fan matches the size and use of your space.

Upfront costs vary widely. Simple models start around £250 and can be installed with basic electrical knowledge. Larger models can cost as much as £5000 and need integration into your current HVAC system.

Check compressors are running properly

Air compressors are essential to operations if you run a business with mechanical processes.

Ensure your air compressors run as efficiently as possible by:

  • checking for leaks – a single 3mm hole can cost £2,000/year
  • switching off when not in use – idling uses up to 70% of full power
  • setting pressure at lowest level for each application
  • making sure there is ventilation space around the compressor

Most new air compressors come with digital monitoring systems, but you might be able to retrofit or improve older models using digital tools.

An ultrasonic leak detector costs around £500 but will often pay back in under a year. Find more digital retrofit ideas on the Plant Services website.

Electric motors account for around two-thirds of the energy used in industrial settings.

Check electric motors are running efficiently

Running electric motors can cost more than the upfront price in as little as two months, so you should check that they’re running efficiently. Reducing motor speed by 20% can cut its energy consumption in half.

No-cost steps include:

  • labelling switches and turning off when not in use
  • making sure speeds, fans and other settings are in use and working properly
  • cleaning on a regular basis to avoid overheating

Lower cost steps include:

  • interlocking motors to run in coordination with other equipment
  • installing energy sub-meters to find efficiency and performance issues
  • using the Energy Technology List to purchase efficient replacements

Invest in longer term energy savings

Some energy saving measures mean higher upfront costs. However, these will pay back quicker than in the past because of high energy prices.

Insulate your pipes, roof and walls

Investing in better insulation can have a quick payback, depending on the conditon of your building and what type of measures are needed.

Foam insulation around exposed pipework is a low intervention fix that can save up to 70% of energy loss and avoid overheating.

Other types of insulation include:

  • roof insulation – average payback time of 2 years
  • cavity wall insulation – average payback time of 3 to 5 years

Solid wall insulation and new windows take longer to pay back. Find out more about costs for insulation and windows.

Switch to more efficient light bulbs

Older fluorescent tubes and sodium lights are inefficient compared to the current standard of T5 fluorescent lights and LEDs.

Upgrading from conventional lighting to LEDs can save up to 80% on running costs depending on the efficiency of your existing system.

Upfront costs and the payback period depend on your current bulbs, fixtures and the price you pay for electricity to run them.

Use Carbon Trust’s lighting business case tool to check how long it takes upgrades to pay for themselves.

Install automatic lighting systems

Automated lighting systems have higher upfront costs but can pay back quickly.

Options for these systems include:

  • occupancy sensors for internal lighting
  • night time sensors for external lighting
  • ‘daylight harvesting’ sensors that dim lights when sunlight is present

Start by changing traditional light switches and fixtures to motion sensor models if an entire workplace system is too expensive.

Motion sensor models start around £10 for a switchplate and £20 for a fixture.

​​Install variable speed and frequency drives

When you’re ready to invest in new equipment, variable speed or frequency drives can have a major impact on efficiency.

Up to 20% of the energy to power electric motors is wasted in throttling mechanisms used to slow down the flow of air and liquids. A variable drive avoids this by helping a motor run at an optimal speed depending on operating demands.

Payback time varies based on the cost of electricity, the size of your motors and how much they can be slowed down to work at peak efficiency. 

A decrease in speed of 10% will save almost 30% in energy costs.

Use a variable drive payback calculator to get an idea of how much you could save.

Improve refrigeration efficiency

Buy more efficient refrigeration models or take good care of the ones you have if refrigeration is important to your business. Regular maintenance can save up to 10% on costs.

No and low-cost measures include:

  • making sure fridges are no more than 75% full
  • repairing or replacing door seals and PVC strip curtains
  • relocating refrigeration units away from heat sources and draughts
  • keeping condensers and evaporators clean and frost-free
  • checking the nameplate efficiency of your current model and comparing it to a new one

Investing in curtains, blinds or doors can pay back in as little as 7 months if you have retail style cabinet fridges or freezers.

Check the refrigeration section of the Energy Technology List (PDF) for more detail, including costs and benefits of replacing entire cooling units and systems.

Replace office equipment with more efficient models

Office equipment is a major source of energy use and excess heat. It consumes about 20% of total electricity used in a typical office setting. 

Most of this is caused by computers, monitors and other IT equipment. When replacing these, buy efficient models certified by the EnergyStar label. 

Check the Carbon Trust’s office energy guides for more ideas on how to save.

Generate your own energy

Installing solar panels can reduce your reliance on the National Grid and avoid higher energy costs.

Check our solar panels page to find out what types there are, how much they cost and how they benefit your business.

You should also consider installing a wind turbine if your business is located in an more remote area without many trees or tall buildings.

Check if you qualify for a business rate exemption if you install renewable measures on site at your business.

Find finance and support

You can get short and long term support to manage higher energy bills. The government has extended automatic assistance to businesses paying the highest rates for electricity and gas.

Find business grants and schemes

Use our finance and support page to find green business grant programmes in your region. Many help with improving energy efficiency and offer matching investments or grants.

You can also check the Charis website for business grants that help with high energy costs.

Get a green loan

A number of banks have products designed to help SMEs finance projects such as building retrofits.

These are most often ‘green loans’ that can be used to pay for building upgrades. To apply you may need a retrofit plan and security assets such as an owned property.

Incentives for green loans can include:

  • waived fees
  • flexible repayment schedules
  • variable or fixed interest rates

Ask your bank about what they offer. Most also have green investment options where you can put money into funds that work to improve sustainability.

Take part in the UK Net Zero Business Census
Take part in the UK Net Zero Business Census