How to Reduce your Business Energy Costs in 2021
Covid-19 continues to disrupt businesses on a global scale and with stricter lockdowns being enforced, entire sectors are facing financial distress. With many organisations continuing to see a decline in earnings, focus is now on better procurement to reduce costs and improve the bottom line to ensure business longevity.
However, with initial efforts and priority focussed on the direct spend and core suppliers, this will no doubt leave the non-core spend i.e. business overhead costs as a growing problem that never gets addressed. Business overheads are one area that can quickly become a drain on revenues but can be cut back with minimal risk.
Did you know, a 20% cut in energy costs represents the same bottom line benefit as a 5% increase in sales for many businesses?
Energy is one of the biggest overheads for businesses, so it is vital to get the cheapest rate possible for gas and electricity. Many organisations do not have the negotiating power or resources available to secure the best deals, however, there are plenty of ways that your business can save energy and cut back on outgoing bills…
Intelligent use of a group procurement organisation, such as ProSource, can help you reduce your utilities bill, with little to no input from you. How does it work? It is no secret that the more money you spend with a supplier, the better deal you will get. A group purchasing organisation aggregates the spend of multiple companies and once a member of one, you can leverage that buying power and get a better deal.
Group purchasing organisations, such as ProSource will take your energy spend, analyse it, identify savings and manage the entire transition to a new supplier; so, it is hassle and risk free. As you will be a member, they will also monitor your energy agreement and ensure your prices continue to remain competitive.
Download our free guide and see 10 reasons why your business should join a Group Purchasing Organisation.
Know your renewal Date
Did you know; if you do not issue a notification of termination 30, 60 or 90 days before your energy contract ends or renegotiate a new agreement in time, your contract will auto-renew. With auto-renewals, your supplier will put you on a default/variable tariff which can see your rates increase by up to 30%. Know your renewal dates and your notice of termination period; 6 months prior to the end of your contract start negotiating with your current supplier or start shopping.
Read your Meter
Read your electricity meter and know your average consumption. If you do not have the time to check your electricity meter regularly and cross check with your bills, try to schedule in some quarterly spot-checks. Energy companies can make mistakes; and these can go unnoticed if you are not checking against your meter reader. Electricity bills are notorious for being confusing and daunting to read, therefore, most companies will trust that the details of consumption are correct and will pay accordingly. This can result in mistakes going unnoticed and usually at a cost to you.
Consider a Smart Meter
A Smart Meter is a great way to help you monitor and reduce how much energy your business is using. Smart meters relay real-time usage information directly to your supplier and eliminates the need to submit monthly meter readings, which not only will save you time, but ensure you are being billed accurately. A real benefit of this new technology is that you can keep an eye on the amount of energy you use and when, knowing your usage will give you an opportunity to address your peak usage times to avoid high, peak rate prices.
As mentioned above, if you keep allowing your supplier to auto renew your energy agreement, it is rare that you will be receiving the best deal. The Big Six is the collective name given to the UK’s six largest energy providers, and although giants in the industry, supplying the majority of the energy market between them, this doesn’t necessarily mean that they are the best value. There is a growing numbers of smaller energy suppliers and to ensure you secure the best deal; it is imperative that you shop around. In some cases, solely telling your supplier that you are interested in browsing the market – can result in a discount.
Experience shows that even low and no-cost actions can usually reduce energy costs by at least 10% and produce quick returns.
Ensure the whole team are onboard and say no to standby by unplugging computers or any other electrical devices that are not needed outside of office hours. Utilise nature and switch off the lights in summer months where natural light is sufficient and manage office drafts to increase your heating efficiency in colder months.
Although this will entail a cost upfront; it will provide a hefty return in the long run. Switch to energy saving light bulbs that use up to 80% less energy than standard and start replacing out of date models of computers, fridges and even kettles as these can have a big impact on energy efficiency and your environmental impact.
To summarise, it is possible to reduce what seems like an ever-increasing energy bill. Of course, it is always easier said than done. Our suggestion: Join a group purchasing framework such as ProSource to secure rapid savings and whilst they are handling the analysis, price comparisons and transition; use that time to upskill your team on how to decrease your energy consumption. With an estimated 10% reduction on your energy bill and with savings starting instantly, it can provide instant bottom-line improvement.
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