How to Reduce Business Energy Costs

  02-Jul-2018
 

Whether you are a sole trader or the owner/CEO of a large-scale company, other than death and taxes, one of the next unavoidable expenses you encounter is your energy bill.

The NSW Chamber of Business recently stated that in a survey, businesses complained that 50% of their expenses were due to energy bills. So how do we keep those costs down? Could it be as simple as implementing a few changes around the workplace and becoming savvy with choosing energy bill plans?

Reducing your energy costs is a wholistic process. It doesn’t need to be time consuming or costly - especially if the return on investment (ROI) outweighs the cost of not changing anything! There’s also the environmental aspect of reducing your carbon emissions and gaining “greener” credentials.

Here are some of the ways you may be able to reduce your energy costs.

Energy Bills and Retailers

At first glance, energy bills can seem complicated. Taking the time to understand them is the first step to taking control over the costs. A few items that all retailers have in common are:

1.Tariff Rate: cost per kWh consumed;

2.Daily Supply Charge: Amount charged just to supply you with your energy;

3. Discount: usually for paying on time. Some retailers add conditions such as strict direct debiting and online billing options for the customer to receive the maximum discount.

Understand the contract lengths and terms.Retailers compete for business in May-June each year. This can be a great time to look for a better rate and lock it in. With a 2-year fixed option, you could avoid increases of up to 40%.

Thanks to IPART, all energy retailers must also have accessible online “Energy Price Fact Sheets”. These are found as PDFs on their website and contain the energy plan codes and names, a table of all the pricing details, discounts, payment fees and contract terms.

Government Subsidies and Initiatives

The government runs subsidy programs to assist businesses reduce energy costs. The grants help to finance lighting and equipment upgrades so businesses can install more efficient systems.

The NSW Office of Environment and Heritage provides the Energy Saving Scheme (ESS) to assist with energy efficient installations.

The NAB also provides an environmental upgrade funding package, starting from $250,000 to $1mil for sustainable improvements to existing buildings. The aim of the product is to incentivise building owners to make improvements. Tenants traditionally reap the benefits of these.

Efficient Teams and Business Set Up

Some aspects of business energy efficiency are more easily managed than others. Some changes are behavioural, and others require simple installations or adaptations. If you’re renting, it is always better to seek permission from the owner first and understand your lease agreement, before making changes to the property. 

A Green Team

Could you create a ‘Green Team’ or ask a staff member to volunteer as the Green CEO-Champion Efficiency Officer? Your team’s aim would be to help reduce business energy use and increase sustainable workplace practices.  

Update Lighting

Changing old fluoro or halogen lights to LED lighting with lower wattage and multiple switches is a good first step. LED lights are suitable for dimming or can be utilised as sensor lights when a room is infrequently used. Changing to LED lights can save up to 50% of the energy bill in some businesses and can be a good Return of Investment (ROI).

The Energy Savings Scheme provides subsidies through Accredited Certificate Providers (ACPs) to install energy and cost-efficient lighting for businesses at a reduced price.

Computers, Office Equipment and Standby Power

Standby power can cost at least 10% of your energy bill. Leaving computers, chargers, printers, copy machines and other appliances or equipment on when not in use, comes with a cost. Leaving one or two items on for updates if required is part of the operational costs. Items such as data servers will run more efficiently though, if well ventilated to reduce overheating.

The “Green Team” or CEO could motivate staff to turn off their computers and monitors at the end of the day with a small reward of recognition - chocolates or gift cards can work wonders!

Cool Rooms, Fridges and Freezers

If your business is based on catering or food service, then food hygiene standards require disposable food products to be chilled at 5 degrees Celsius or lower. Cool rooms, fridges and freezers run at a more optimal level when they are well sealed and fully stocked. Internal thermal mass keeps the air chilled inside the cooling facility or appliance so that the engine is not using more power than required to maintain the set temperature.

Site Location

The position of your business location and the size, type, window orientation and floor plan can all make a difference to the comfort of the workplace. These details determine the effectiveness of your heating, ventilation and cooling systems (HVAC). Whether the HVAC is maintained by strata or attached to a separate meter and charged to your energy plan, there are strategies to reduce the costs involved and create a more even and comfortable workspace. Tinted glazing or double glazing, internal blinds and external awnings all help to create a more enjoyable business and work environment.

Renewable Energy

Business energy plans offer purchase of renewable energy as a 10%-100% option for a small additional cost, or there are 100% Renewable energy retailers with a credible footprint and commercial history. These are great options if you’re renting premises and the building doesn’t have solar panels or investments in windfarms.

If you own your roof space in a building, it is well worth considering the purchase of Photovoltaic Panels (PV or Solar panels) or proposing them to the Strata Committee and Body Corporate Services. The NSW Energy Saving Scheme (ESS) offer rebates as incentives attached to solar panels that reduce their cost. Solar panels also provide tax credits and the ROI usually outweighs the purchase and installation costs. The average bill reduction on energy costs can amount to 25% reduction or more.

By combining energy efficient practices and products with an energy plan that provides the optimum discounts and energy charges, you may be able to reduce costs significantly. Reducing energy consumption will also provide improved carbon emission credentials.

 

 

About the author: Candice Delac is an energy efficiency consultant with Energy Ninja

 

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