Drinking rainwater from banana leaf, Nigeria. (c) I. Uwanaka/UNEP
Drinking rainwater from banana leaf, Nigeria. (c) I. Uwanaka/UNEP
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Motivation 101: How to Stay Inspired and Reach Your Goals

Posted: 26 Jan 2024

Rising energy prices are more than just a headline; they're a significant concern for your business's bottom line. With global events like natural disasters and geopolitical conflicts, particularly the impact of the Russia-Ukraine conflict on gas supplies, it's no surprise that UK energy costs are skyrocketing.

But don't let your energy bills drain your finances. There are practical steps you can take to reduce your consumption and save money. From exploring grants offered by local councils and energy providers to adopting remote working to slash utility bills, you've got options to bolster your business's energy efficiency. Let's dive into how you can keep those bills in check and maintain a sustainable, cost-effective operation.

Understanding the impact of rising energy prices

With recent global events triggering a significant rise in the cost of energy, understanding the impact on your business has never been more crucial. Events such as geopolitical conflicts, notably the Russia-Ukraine conflict, have caused a surge in energy prices due to sanctions and disrupted supply chains. Factoring in the UK's dependency on imported gas, it's evident that these external influences are more than just headlines; they're a direct hit to your business's expenditure.

To put the intensity of these hikes into perspective, consider that business energy costs are not regulated in the same way as residential prices. Unlike residential users, businesses often face higher energy prices due to market volatility and the larger scales of consumption involved. The table below illustrates the spike in costs that businesses have experienced over the past year:

Amidst this backdrop, it's essential to evaluate your energy usage and explore ways to mitigate the financial strain. Conducting an energy audit is a proactive step towards identifying inefficiencies and potential savings. It's not just about cutting back on usage; it's about smart usage, optimizing operations and aligning with cost-effective tariffs.

While switching energy suppliers has traditionally been a go-to strategy for cost savings, this approach requires careful consideration given the current market conditions. If you're not locked into a contract, it's worth investigating the market for better deals, but don't expect drastic reductions in costs due to the general uptrend in energy prices. However, securing a fixed rate could offer some protection against future price surges.

Adapting to these challenging circumstances requires a multi-faceted approach. Alongside monitoring market trends, embracing energy-saving strategies could fortify your business against the financial pressures of these volatile times. It's about making informed decisions that ensure the sustainability of your business without compromising on performance or productivity. Therefore, staying abreast of both market fluctuations and your own energy consumption patterns is more important than ever.

 

 

Exploring grants and incentives for energy efficiency

When looking to trim your business energy bills, grants and incentives should be top of mind. Your local council may have offerings to explore—reach out to them and get familiar with what's available. Energy companies may provide their own grants and schemes, contributing to potential savings. Tools such as Grants Online are invaluable for finding and staying updated on these changing provisions.

While energy grants vary widely, remote working stands out as a simple yet impactful strategy. It directly reduces the number of individuals using energy in the office, subsequently lowering your bills. Global Workplace Analytics reports that businesses save on average £6,810 per employee per year when they work remotely 50% of the time, with approximately £1,857 of these savings coming from reduced utility costs.

Beyond individual company offers, the UK government is actively involved in promoting energy efficiency for small and medium businesses (SMBs). Schemes and loans provided by the government aim to:

  • Implement energy-saving measures
  • Provide savings on initial costs for installing energy-efficient resources
  • Encourage waste reduction
  • Foster sustainable development

You'll find an array of government energy grants and loans listed on their official website, including the Clean Heat Grant for green-heating technology and the Green Gas Support Scheme for biomethane usage. These incentives underscore the government's commitment to help businesses transition towards sustainable energy practices.

Tax incentives can also play a critical role. They can make upgrading systems more financially viable, allowing you to invest in energy-efficient technology with less financial strain. When planning upgrades, ensure you're thoroughly checking what tax breaks and incentives may apply. This financial planning step could make a significant difference in managing upfront costs and achieving long-term savings.

Assessing your current energy consumption

To tackle your soaring energy bills, you'll first need to understand exactly how energy flows through your business. Start by conducting a thorough assessment of your workplace's energy use throughout the day. By monitoring usage patterns, you can identify specific times when energy consumption spikes or falls.

Perhaps you've noticed that despite the office being empty overnight, your energy costs remain stubbornly high. This could indicate that you're haemorrhaging money on computers left in standby mode or by heating unoccupied spaces. These are common oversights that many businesses fail to spot without a proper analysis.

By identifying when and where your business uses the most energy, you're positioned to create a targeted plan for efficiency improvements. Key energy-saving opportunities often lie hidden in routine operations and can be uncovered with a systematic approach to energy monitoring.

Professional energy audits are a valuable resource in this regard. Usually taking between four to six hours, an energy audit will scrutinize aspects like insulation effectiveness, potential air leaks, and the efficiency of your lighting setup. Don't overlook the potential for free energy audits provided by some energy suppliers; it's worth contacting yours to see what's on offer.

Remember, smart meters are instrumental in giving you real-time data on energy usage, ensuring you're not reliant on estimating consumption or waiting for monthly bills to gauge the impact of the changes you implement. By upgrading to a smart thermostat and meter, your business can transition from reactive to proactive energy management.

With the support of organisations like the Carbon Trust and Energy Savings Trust, and possibly assistance from sustainable energy advisors found on platforms like PeoplePerHour, you can begin to transform your business's energy usage into a more sustainable, cost-effective model. Tapping into these resources provides you with actionable insights into how to adjust your energy strategy for the better.

Implementing energy-saving practices in the workplace

Energy consumption in your business can often be reduced with simple changes that don't require significant investment or effort. To keep on top of energy-saving practices, consider appointing an energy-saving champion within your team. This demonstrates a commitment to sustainability and helps ensure that the responsibility doesn't fall by the wayside.

Here's how you can incentivize the role and encourage team participation:

  • Offer an incentive, such as shortened Fridays or free coffees, to make the position appealing.
  • The appointed employee should conduct basic energy efficiency research and disseminate tips to colleagues.
  • Use visual prompts, like posters or email memos, to remind staff to engage in energy-saving tasks.

Small actions make a considerable impact. For instance, ensuring that computers are shut down overnight and lights are turned off can save substantial amounts of energy and, consequently, money. The Carbon Trust suggests that office lights left on overnight use enough energy in a year to heat a home for almost three months.

Consider implementing these simple strategies:

  • Encourage staff to avoid overfilling kettles, which can waste energy.
  • Install light switch reminders to prompt staff to turn off lights when not needed.
  • Draft an energy-saving plan to make everyone in your company more aware and proactive about energy use.

Item

Energy Saving Impact

Shutting down computers

Prevents unnecessary energy use outside working hours

Turning off lights

Could save enough energy to heat a home for three months

The Department for Business, Energy & Industrial Strategy reports that lighting accounts for around 20% of the electricity produced in the UK. By making simple adjustments, such as switching to energy-efficient bulbs and utilizing natural light, businesses can make a considerable dent in their energy bills. Remember, an energy-saving culture starts with awareness and is sustained through consistent practice and staff involvement.

Making the switch to renewable energy sources

With the UK's goal to achieve NetZero by 2050, switching to renewable energy sources is not just an environmentally conscious decision but a strategic financial move for SMBs like yours. Initiatives such as business grants for solar panels are nudging businesses toward greener horizons while offering an attractive return on investment.

One noteworthy incentive is the Energy Company Obligation (ECO4) program. Running from April 1st, 2022, to March 2026, it offers the possibility of partially or even fully free solar panels. This could significantly reduce your upfront costs.

Incentive

Details

Energy Company Obligation (ECO4)

Partial/Fully Free Solar Panels

Start Date

April 1st, 2022

End Date

March 2026

Smart Export Guarantee (SEG)

1 - 7.5p per kWh (Indefinite)

0% VAT on Solar Panels

£1,300 Savings on Installation & Energy Bills

In addition, the Smart Export Guarantee (SEG), which started on January 1st, 2020 and does not have a set end date, means you could get paid between 1 to 7.5p per kWh for the surplus energy you generate. Finally, a reduction in VAT from April 1, 2022, to March 2027, spells out a considerable saving of up to £1,300 on installation and energy bills.

Before making the switch, remember to:

  • Check your ability to switch: Review your current energy contract terms and ensure you exit properly, with adequate notice.
  • Compare suppliers: Use online platforms to find the best deals tailored to your business needs.

Implementing solar panels and other renewable energy solutions does more than lower bills. It helps establish your business as a leader in sustainability, aligning your practices with a future that consumers increasingly vote for with their wallets. Engaging with specialists like Business Energy UK or Big Clean Switch may streamline the transition, ensuring you're backed by expertise at every turn.

An eye on energy efficiency will become increasingly imperative with rising energy costs. It's crucial to move this up your to-do list, making lasting changes that benefit both your finances and the environment.

 

Conclusion

Harnessing the power of renewable energy not only lowers your business's energy bills but also aligns with a sustainable future. With the array of incentives available, like the ECO4 program and SEG, you've got a golden opportunity to make a cost-effective switch. Remember, reviewing your energy contracts and consulting with specialists can pave the way for significant savings. It's time to take control of your energy expenses and invest in an eco-friendly approach that benefits both your bottom line and the environment. Embrace the change today and watch your business thrive.

Frequently Asked Questions

How can SMBs benefit from switching to renewable energy?

Renewable energy can lead to substantial savings on utility bills for SMBs. Incentives like the Smart Export Guarantee (SEG) also allow businesses to earn additional revenue for surplus energy generated.

What are the benefits of business grants for solar panels?

Business grants for solar panels can cover a large portion of the installation costs, reducing the overall investment required by SMBs and speeding up the payback period from the energy savings.

How does the ECO4 program assist SMBs?

The Energy Company Obligation (ECO4) program provides SMBs with partially or fully free solar panels, thereby reducing the initial cost of switching to renewable energy sources.

Can SMBs save on VAT for renewable energy installations?

Yes, SMBs can enjoy a reduction in VAT on renewable energy installations, making the transition to green energy more affordable and lowering energy bills in the long term.

Why should businesses review their energy contracts?

Reviewing energy contracts allows businesses to ensure they are not overpaying for electricity and to lock in more competitive rates, avoiding potential price increases.

How does energy efficiency impact a business's sustainability?

Energy efficiency reduces energy consumption and operational costs, which contributes to an SMB's financial stability and supports a sustainable business model.


 
Wild Weather. Photo: Dave Martin/AP Photo
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