3 ways to cut energy bills for your small business

Increasing gas and electricity prices are a serious issue for small businesses. Here are three practical ways to lower business energy bills right now.

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Rising energy costs aren’t just a problem for cash-strapped households. Increasing gas and electricity prices are a serious issue for small businesses too. In fact, according to card payments provider Tyl, some small and medium-sized enterprises (SMEs) spend more than £5,000 on their business energy bills every year.

But that’s not all. Of the 500 SME owners Tyl questioned, 70% of respondents said they believed energy bills affected their business growth. And while it feels like soaring energy prices are here to stay, you can do something about it.

Here, I take a look at three practical ways to lower business energy bills (that don’t include wearing extra layers or installing an entire building management system).


1. Check you’re on the right business energy tariff

If you haven’t agreed a business energy deal, you could be on an expensive out-of-contract tariff. This includes rollover contracts that charge you default energy prices when your existing fixed-rate deal ends. Similarly, if you’ve just moved into your business premises and haven’t agreed an energy deal, you could be on a ‘deemed rates’ tariff.

Rollover contracts and deemed rates are the most expensive business energy tariffs to be on. With that in mind, if you haven’t agreed a business energy contract, it’s a good idea to start comparing energy quotes as soon as possible.

The next challenge is to make sure the tariff you agree to meets your business need. If you have a smart meter, then you’ll be able to see when you use the most energy and try to find a deal that fits in around your use.  

2. Increase energy efficiency

Energy efficiency is an easy way to cut business energy costs. But it’s not just about remembering to turn off the lights. To make real savings, you’ll need to try and lower energy consumption throughout your business.

For example, you could switch to LED lighting. According to data from the Department of Energy and Climate Change (DECC), LEDs use up to 90% less energy than traditional lights. What’s more, replacing old spotlights with LEDs saved one medium-sized hotel more than £1,500 a year.

Using timers and thermostats to control heating is another easy way to lower costs. Adding motion and occupancy sensors can also help. In one DECC case study, it saved a business £813 a year.

Plus, if you’ve got vending machines containing non-perishable foods, consider switching them off over the weekends. One business managed to save £144 annually just by turning off two water coolers when the office closed on a Friday afternoon.

These are just a few very simple but effective ways that can cut energy bills in a meaningful way. For more ideas, take a look at the full DECC report that provides examples, case studies and estimated savings.


3. Switch your business energy provider

Business energy deals can last up to five years, so you might find your small business is protected for a little while yet.

To avoid ending up on a rollover contract or deemed rates, check when your current contract ends. Your paperwork should also specify your ‘switching window’, giving you the chance to switch to another supplier without incurring exit fees.

When you have the opportunity to switch, remember that business energy contracts are tailored to your needs. So, carefully consider the time of day you use the most energy to ensure you find a deal that suits you.

Also, don’t forget that unlike when you agree a domestic energy tariff, there’s no cooling-off period with business contracts. In other words, once you agree a business energy deal, that’s it – you’re tied in.

If your contract still has a way to go but you want to switch to a cheaper tariff, call your energy provider. You might not be able to leave but they may agree to amend the tariff you’re on to be more competitive. They’re under no obligation to do so, but it’s always worth asking.

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