Soaring energy prices are contributing to the biggest squeeze on incomes in decades. But it isn’t just households that are feeling the pinch. Across the UK, millions of businesses are experiencing a big spike in costs as gas and electricity bills rise dramatically.
April’s 54% hike in the price cap set by energy regulator Ofgem was triggered by record inflation in wholesale fossil fuel prices on the back of the COVID-19 pandemic. With the war in Ukraine triggering further disruption, the predictions are that more pain could follow. A further 32% increase in the price cap is already being mooted for October.
Few sectors will be left unscathed by such sky high energy inflation. Everything from transportation to production to IT is vulnerable to the current volatility in energy markets. Whether you feel the pinch primarily in seeing your logistics costs rise or in heating and servicing your premises, business owners are left with an unenviable choice – either take the hit to your margins or pass costs on to your customers.
Either way, everyone loses out eventually.
The long-term ambition, of course, is that the transition to more sustainable and renewable sources of energy will bring costs under control. But that’s for the medium to long term. Businesses face having to navigate painful energy costs in the here and now.
There is only so much an individual business can control. But one thing you can start working on straight away is making your business more energy efficient. The less you use, the less you pay.
The journey towards a more energy efficient business starts with raising awareness about what you can control. Things like switching off all electrical devices when not in use overnight and having heating and aircon on timers to maintain a stable temperature might seem insignificant. But over time, those small percentage gains build up.
Education is important, as you need to take your whole workforce with you to ensure those small gains add up. Staff members might be in the habit of filling the kettle right to the top then using it to only fill one cup, or switching bathroom lights on even in broad daylight.
Explaining how even these small steps can contribute to improved energy efficiency will help you achieve your goals. You can also lend a hand by doing things like installing motion sensors so lights only come on when someone goes into a certain room.
Find the right support
Other ways of making your business more energy efficient take a little more planning and investment. For example, it’s well worth reviewing your appliances and devices to check the energy efficiency ratings. Older equipment in particular may well consume much more than needed.
There is plenty of support available for businesses looking for advice on more far-reaching projects. The Energy Saving Trust, for example, provides business-focused support on topics such as sustainability strategy, choosing greener products and technology, and making improvements across your supply chain.
If you’re looking for more energy efficient plant and machinery, the government publishes its own Energy Technology List with details of certified products and suppliers.
Finally, one of the biggest things any business can do to reduce their energy costs is invest in their own renewable energy sources. There are numerous loans, grants and subsidy schemes available to businesses for things like installing solar panels or heat pumps. Not only can you get upfront assistance with capital investments in green energy projects, there are also opportunities to earn money by contributing to the national grid.