How your small business can save energy during the summer
Businesses across the UK have been hit hard by huge increases in their energy bills over the last year. While many assume that the summer months can offer respite in energy consumption, it can actually be the opposite.
So, why might business energy bills actually be higher in the summer than in the winter?
To help get to the root of the issue, our guide will walk you through the reasons why usage can increase at this time of year and how you can cut your energy costs.
- Higher energy consumption can lead to rising global temperatures and this is no different in summer. For some businesses, summer bills could actually be higher when it's warmer - this depends on the industry.
- Business energy prices are volatile but are still high compared to 2021. Energy price changes are affected by supply and demand fluctuations, shortages in renewable energy due to unpredictable weather, taxes and levies and market uncertainty.
- Businesses can make small changes to save energy by using water more efficiently, using fans, keeping hot air out, switching to LED bulbs, replacing air filters, using energy-efficient equipment and turning everything off at the end of the day.
- No one can predict the state of energy prices as markets are unpredictable. But if your business needs some support, you can apply for small business grants or loans if you are eligible. Bionic can help advise on this.
Why is it important to save energy during the summer?
For small businesses, cutting back on unnecessary costs is fundamental to maintaining a healthy bottom line. While this applies all year round, people may assume that less energy is used in summer due to warmer temperatures and less reliance on heating and lighting. But, businesses should look at how they can make energy efficiencies throughout the year, regardless of the weather.
Additionally, summer is when sustainability and environmental concerns come to the fore, as each year, global warming causes temperatures to reach record-breaking heights. As the planet continues to grapple with climate change, every business has a responsibility to reduce its carbon footprint.
High energy consumption leads to higher greenhouse gas emissions, increasing global warming. Therefore, adopting energy-saving measures during the summer months is not only a smart economic move but also an ethically and environmentally responsible one, too.
Why are energy bills so high?
Understanding why energy bills are high means looking at the broader energy market and what can influence it to change. The price we pay for energy isn’t just the simple cost of generating electricity or gas; it’s affected by a complex number of factors.
- Supply and demand – Energy prices are affected by supply and demand dynamics. This essentially means that in times of high demand or short supply, prices tend to rise. Likewise, when there's an oversupply or reduced demand, prices can decrease. With geopolitical tensions causing import difficulties to the UK in 2022, energy prices reached sky-high levels and proved to be extremely volatile over the last 12 months. Prices appear to be gradually falling in recent months, but bills are still more than they were in 2021.
- Renewable energy – The transition from fossil fuels to renewable energy sources also influences energy prices. Investment in renewable energy infrastructure, research, and development requires significant capital, which is often reflected in energy prices. If renewable energy, like solar or wind power, isn’t performing like previously, this can also increase average energy bills. Find out more about renewable energy for businesses with our guide.
- Taxes and levies – Taxes, levies, and regulatory costs can also contribute significantly towards energy bills. Governments often impose these charges on energy providers to fund renewable energy initiatives, energy efficiency schemes, and to maintain the energy grid's infrastructure. These green taxes are then passed onto businesses that purchase energy from the suppliers.
- Low energy market security – With so many factors affecting business energy bills, the high chances of volatility within the market mean that prices can dip and soar exceptionally quickly. Plus, if several of the above conditions occur at the same time, it puts even more strain on energy suppliers, and businesses will end up having to pay the consequences.
To learn more about the circumstances that can cause energy prices to rise, take a look at our guide to what’s causing your gas bill to rise here.
Why are my business energy bills so high in the summer?
Many businesses can expect energy usage to increase in winter when it gets darker earlier and more power is used to keep the lights on for longer and on heating.
However, your bills could actually reach their highest in the summer. This is because energy consumption can spike due to air conditioning, cooling, and ventilation systems being used, sometimes more often than heating in winter, to create comfortable working conditions. Air conditioning units, in particular, consume a significant amount of electricity, leading to higher energy bills.
This surge in demand not only leads to higher energy bills but also puts pressure on the power grid, often leading to higher energy prices for everyone.
How can my business reduce its energy consumption during the summer?
Making even a few small changes to the way you use energy can have an impact on your bills. Here are a few ways to cut your usage and your costs.
Use water efficiently
Heating water accounts for a significant amount of energy usage. Consider low-flow taps and fix any leaks promptly to avoid wasting water and energy. You can also encourage employees to only run any water-using appliances, like dishwashers or washing machines, with full loads and at cooler temperatures. To go one step further, consider investing in water-efficient appliances that run using less energy without compromising performance.
Use fans where possible
Fans consume less energy than air conditioning systems. In the UK, as the warmest months in the year don’t tend to last for too long, choosing a fan can save your business a lot more money than purchasing, installing, and running air conditioning. Using fans that are closer to floor level will help to circulate cooler air around your office spaces, as opposed to blowing hot air that has risen to the top of the room. However, always remember to turn them off when spaces are unoccupied.
Keep the hot air out
It may feel natural to crack open a window when the midday heat hits, but this can have the opposite effect. Opening a window or door allows hot air from outside to enter. Instead, try to keep them shut and use curtains or blinds to block out sunlight which can cause temperatures to rise.
Switch to LED light bulbs
Upgrading to energy-efficient lighting with light-emitting diodes (LEDs) use up to 80% less energy than traditional fluorescent light bulbs and are known to last up to 25 times longer. They also emit less heat, which can reduce the need for cooling.
Unplug anything that’s not being used
Many appliances consume energy if they’re plugged in at the wall but not in use or even turned on: also known as vampire energy or phantom power. A study by British Gas even found that vampire energy can account for up to 23% of an electrical bill. To combat this, you can encourage employees to unplug chargers, turn off computers, and shut down equipment at the end of the day.
Replace air filters
If your offices are not optimally insulated or have outdated, inefficient cooling systems, you may be losing energy and, in turn, money. Older air conditioning systems or those not regularly serviced may have to work harder to cool the building, leading to increased energy use. Clean or replace filters at least once every three months during peak usage times to ensure your system operates efficiently.
Use energy-efficient equipment
Whenever possible, opt for equipment and appliances with a high energy-efficiency rating. They may have a higher upfront cost but will save you money in the long run through reduced energy consumption.
Switch business energy suppliers
Market competition means there may be more cost-effective energy deals available. Here at Bionic, we compare business energy suppliers and find a contract that's better tailored to your business's needs and usage patterns.
To find out how much you could save by switching, get in touch with our experts today or find out more about business energy here.
Are energy prices supposed to go down at any point?
Forecasting energy prices can be difficult, as they depend on many variables, and the recent market volatility makes it nearly impossible to tell what could happen next.
Despite the promising fall in prices this year, short-term fluctuations are still likely to be influenced by the factors mentioned above, and energy bills overall are still higher than they used to be before the COVID-19 pandemic.
And the way energy is bought and sold means that a drop in wholesale prices (the rates suppliers pay for the energy they sell to you) won't immediately be passed on.
Businesses should stay informed and responsive to these changes to avoid getting into difficult financial situations.
The best proactive approach to energy management during these uncertain times is to review your energy contract regularly, look for the most cost-effective options, and make everyday changes to cut your energy bill.
What support is available for small businesses?
Looking for alternative ways to support your business while energy bills continue to cost a substantial amount of money can reduce pressure on your cash flow. Here are some things you can do:
Energy efficiency grants and loans
There are various government-run programs and schemes that offer financial support to businesses looking to reduce the cost of their energy bills. One of the most popular schemes for businesses is the Energy Bills Discount Scheme (EBDS), which offers discounts on non-domestic electricity and gas rates. As long as your unit rates, which are measured in kWh, are above the minimum threshold, you could be eligible to receive a discount.
Find out about your eligibility for other small business grants.
Many utility companies provide free energy audits to businesses. These audits can identify areas where energy is being wasted and suggest improvements, helping to increase your efficiencies and cut your consumption rate.
If your energy provider doesn’t offer this service, independent auditors can also conduct them – or you can even carry one out yourself to save money. Find out how to conduct an energy audit for your business here.
Training and resources
There are lots of free or low-cost training and resources to help businesses understand and reduce their energy usage.
To start, you can visit the Energy Efficiency for Businesses site, which is part of the gov.uk website. There, you’ll find a list of money-saving tips and actions to help you on your journey of reducing your energy usage.
The UK Business Climate Hub also provides lots of detail on how businesses can tackle climate change by becoming ‘net zero’. Net Zero refers to balancing out the greenhouse gases we produce by taking steps to remove the same amount of CO2 from the atmosphere.
Green business certifications are a way to certify that a company complies with verified sustainable practices, whether that’s by producing eco-friendly products, delivering goods in a carbon-neutral manner, or actively mitigating their environmental impact.
Green certifications are awarded by a number of different certifying bodies, such as the UN Global Compact, Green Mark, and B Corp. Each body will have its own regulations for awarding certifications, with criteria ranging from employee count to profit turnover.
While having a green certification won’t directly reduce your energy costs, it can help to boost your business's reputation and potentially attract more customers. This, in turn, can lead to more sales and more profit for your company.
Having a green certification is also a great way to prove that your business really is adopting a sustainable approach and can reduce the chances of being accused of greenwashing.
Cut your business energy bills with Bionic
Whether you’re a start-up or a growing business, getting stung by increasing energy bills can cause significant setbacks for your future. From understanding how to lower your electrical usage to knowing how you can seek help, our guide can help.
Get in touch with our friendly Bionic team to discuss your business energy needs today.