A guide to reducing business energy costs
Mitigating the cost of energy bills is a priority for many businesses amid the current economic strain. Grants, subsidies or government support schemes are invaluable to businesses.
There are existing schemes available to help UK businesses. Moreover, there is further support expected to materialise with the new government. It is more important than ever for businesses to make their operations as efficient and cost-effective with the resources they have.
Identifying areas where you can improve your energy efficiency will allow these improvements within your company’s structure to cut down costs while also helping you withstand any potential energy supply shortages that may arise during this crisis.
Is there an energy price cap for UK businesses?
One of the first energy policy actions taken by Liz Truss as Britain’s new prime minister was to freeze the domestic energy price cap. She promised to freeze energy bills at an average of £2,500 a year for the next two years from 1 October under the “energy price guarantee”.
This is welcome news for consumers. Businesses will not benefit from such an energy price cap as no such scheme exists in the commercial sector.
However, “equivalent support” is expected for businesses struggling to keep up with energy prices. Businesses struggling with energy bills will get help from October 2022, even if payments have to be backdated, a BBC report stated. A spokesperson for Truss’ government said they will “confirm further details of the business support scheme next week. The scheme will support businesses with their October energy bills and that includes through backdating if necessary.”
This is welcoming news for businesses, yet without concrete policies to cling to now, businesses can seek assistance through a few existing energy cost reduction schemes. Businesses should look to employ energy management systems within their businesses to cut costs immediately.
Are there any energy efficiency grants and schemes for UK businesses?
There are several schemes available to businesses, subject to qualification. Many of these can be found on Ofgem’s business energy efficiency grants and schemes guide.
Two of the more well-known schemes are EIIs and CCAs.
EII, or the Energy Intensive Industries Compensations Scheme, remunerates certain businesses that use high levels of energy. It recently received a three-year extension and also received a doubled budget than its first iteration.
Businesses who qualify (read more below on who qualifies for the scheme) can claim up to 85 percent exemption of their Contract for Differences (CfD), Renewables Obligation (RO), and Feed-in Tariff (FiT) costs.
By the name, Climate Change Agreements (CCAs) seem unrelated to business energy cost reductions. There are, however, mechanisms within the agreement that would allow businesses to earn reductions.
Businesses can enter into an agreement to reduce their energy consumption in exchange for a reduction on their Climate Change Levy (CCL). For example, a business could commit to a 1 percent energy consumption reduction year on year for the next four years. In exchange, the business would get a reduction on their CCL (up to 99 percent relief in some cases).
For businesses to qualify for EII or benefit from CCA, they need to report their actual energy consumption. A criteria for businesses to qualify for EII is the must “show how much electricity is used towards qualifying activity for a period of three months.” In the case of CCAs, a business would need to prove they are reducing their energy consumption year on year as pledged (as in the above example of 1 percent reduction YoY).
What can help businesses in their efforts to reduce energy consumption – and thus receive assistance on energy costs – is to employ an energy management system on their sites.
What is an energy management system?
An energy management system (EMS) provides businesses with the tools to monitor and control their energy use. The technological solution gives them easy access to their energy consumption data through graphs and reports.
ClearVUE.Zero is our complete energy management system that allows businesses to harness the power held within business’ energy consumption data and accelerate towards improved energy efficiency, greater cost reductions, and even reduced carbon footprint. The platform is currently employed by many UK businesses to help them improve their energy efficiency strategies. The development of new features such as Alerts, gas consumption monitoring, carbon reporting, and more on the way means that our business users will have the tools they need to stay economically competitive and viable despite current market challenges.
ClearVUE.Zero’s circuit monitoring system provides instant insight into when and where energy is being wasted, giving businesses access to their organisation’s data from anywhere in the world. They can aggregate the data for granular, device-level intelligence or break down individual consumption by asset groupings so that they know precisely how much they are using and where any energy waste is occurring.
Book your free demonstration today and discover how ClearVUE.Zero can help you take control of energy consumption and costs.