6 Ways to Reduce Your Business Electricity Prices

For all small businesses, controlling costs is vital. However, many businesses are still overpaying on their energy bills.

With so much to focus on for small business owners, it’s easy to put off reviewing your energy costs. This approach can leave small businesses on expensive deemed contracts. Around 10% of micro businesses are on deemed rates, paying on average 80% more than those on negotiated deals.

So, how can your small business reduce your electricity costs? Here, Business Electricity Prices provide 6 simple tips to lower your energy bills.

1. Consider the Average Business Electricity Prices

Understanding the average prices of business electricity is a great place to start when aiming to control costs. The cost of business electricity will vary depending on the size of your business and the amount of electricity you use. The more energy you use, the lower your energy costs are likely to be.

Your electricity costs will be displayed at a pence per kilowatt hour (pence per kWh) rate. The average electricity for micro businesses is 16.36 pence per kWh with average prices for small businesses at 14.38 pence per kWh.

These average prices are by no means the cheapest prices available. So, if your latest business electricity bill was charged at a higher rate, you should consider comparing energy prices.

2. Think About When You Use Electricity

A simple way to reduce your electricity costs is to make sure you’re on the right tariff type for your business. When you use electricity can change the type of tariff you should select.

Businesses who use most of their energy outside of peak hours should consider a multi-rate electricity tariff. A multi-rate tariff allows you to pay a cheaper rate during off-peak hours. Businesses that use most of their energy at night such as bars or takeaways could lower their business electricity costs.

You should bear in mind that your electricity rates during the day will likely be higher than other tariffs. If you use a high proportion of your energy during the day, your electricity costs can increase.

3. Consider Your Standing Charges

Your standing charge is a daily fee paid to your energy provider for supplying gas and electricity to your premises. This fee is paid regardless of how much energy you use that day. It’s important to consider standing charge costs when comparing energy. An energy deal with a low cost per kWh rate but a high standing charge could cost you more in the long run.

Businesses who operate seasonally or at weekends could benefit from a no standing charge tariff as you will only pay for the energy you use. Whilst your business is closed, you will not face any energy costs.

You should bear in mind that your price per kWh will likely be higher on a no standing charge tariff. As a result, no standing charge tariffs may not be beneficial for businesses that use a lot of energy.

4. Remember to Track Your Usage

To reduce your business energy costs, it’s vital to understand your gas and electricity usage.

A simple option for small businesses is to install an energy monitor. An energy monitor allows you to identify where your business uses the most electricity. You can view how much your electricity has cost and how much you paid in previous months. Some monitors will also allow you to set a consumption budget to help you reduce your energy usage.

There is a wide range of energy monitors available with prices ranging from around £20 – £100.

5. Implement Energy Saving Measures

Once you have an understanding of where you use the most energy, it’s important to take steps to reduce consumption.

This could be through upgrading to energy-efficient LED lighting or ensuring appliances and lights are switched off overnight and at weekends.

It may sound like a small step, but just ten desktop computers left on overnight can cost a business £1,411.20 per year in additional electricity costs.

Make sure you keep your staff informed of any energy-saving measures implemented across the business. This can encourage staff to buy into the changes and help you reach your goals sooner.

6. Be Aware of Your Renewal Window

All business energy contracts contain a renewal window that allows you to switch suppliers with no exit fees. You should keep a note of your renewal window, so you don’t miss the chance to renegotiate your energy deal. In most cases, your renewal window will open six months before your contract end date.

If you miss your renewal window, you will likely be left on expensive rollover rates. By comparing the latest energy prices towards the end of your contract, you can switch to a cheaper deal that will start as soon as your current deal ends.