Business Energy Use – Know Your Consumption Data!
Chances are, you have thought of how to save on your business energy costs right?
How do you start this process?
Maybe you thought switching your utility supplier would get you a better deal?
So you look for a’ compare the market ‘type comparison online.
You eventually get what you consider is ‘a good deal.’
This is a classic example of right action wrong order.
Comparing suppliers only makes sense if you know exactly what you’re looking for.
- What types of contracts are available to you?
- What suppliers are there?
- How long will it take you to switch?
- What is your annual consumption in kWhs?
- How does the above link to your operational hours?
If you do not know any of the above, utility switching is at best a hit or miss affair or at worst a complete waste of your time.
How can you avoid this?
Let’s dig a bit deeper.
How Much Energy Does Your Business Use?
Over the last 10 years, I have asked numerous business owners (including small and larger businesses, local authorities, housing associations, schools, universities etc) the following question;
How much do you spend on electricity per year?
The most common answers being:
- I would have to ask my staff (accounts-financial director -etc)
- I would say about £……….. per year (as much as 50% off the true figure!)
- I have no idea.
GUESS WHAT?
No one has ever told me their consumption in kWhs.!!
These businesses include SMEs, Local Authorities and Housing Associations, Schools etc.
So the mantra is below…
Measure First then Manage
Business author Peter Drucker is often quoted as saying “ you cannot manage what you cannot measure”.
This is true whether starting an energy savings strategy or attempting ANY energy savings or renewable energy project.
If you do not know your annual electrical consumption in kWh, you cannot manage or measure anything.
This is the fundamental flaw most businesses make.
They simply have no idea.
Here’s how to get this right and be ahead of the game.
How Do I Start Measuring Energy Use?
You need to know how much energy you are using per month, per year in kWh.
The unit rate on your contract is the price you will pay per kilowatt-hour (kWh) of electricity that your business uses.
Usually, there will be a day rate unit price and a nighttime unit price.
You find this from your utility bill. (Also good practice is taking monthly meter readings yourself and match these readings against bills).
Here are the first easy steps to start taking control of your energy:
- Classify what building you operate in. Is it industrial? Offices? Both? Do you operate across several sites?
- What are your operational (occupancy) hours? Hours per day/ per week /per month / per year?
- The area of the building in m².
- Annual consumption in kWh (February 2021 bill minus February 2020 bill).
- Know the location of all electricity meters and their type.
- Take monthly meter readings (we will cover this in next month’s newsletter).
- Have a file for the last 12 months billing ready to hand.
- Finally, know your annual consumption in actual money terms.
This will give you a perfect starting point to taking control of your energy costs.
It will enable you or an energy auditor to benchmark your building.
You now have 80% more information than the average client we meet!
What comes next?
Consider having an energy & sustainability audit undertaken of your business and building.
If you know your consumption data, operational hours and how much your unit cost is for electricity you are ahead of 95% of your competitors.
You might be thinking ‘but I already have an EPC for my building’.
An EPC certificate is NOT an energy audit.
An EPC does not measure performance it just measures the building, type and size but not performance.
A good energy audit will save your business money and give you control:
- It will benchmark your building’s usage against similar buildings and operations.
- It will look at your data in detail and will establish quick energy wins for you
- It will give recommendations as to how and where you can save energy
- You will see which are the least costly measures that will give the greatest benefit
- It will give you energy savings recommendations on no-cost options, low-cost options and higher-cost options.
- It will give you advice on renewable energy options
- It can then form the basis of an energy strategy for long term sustainability for your business
- It can save operational costs like lifecycle costs, new equipment purchases, planned maintenance V reactive maintenance. Money saved straight to your bottom line.
- It can be used as a reference document and technical appraisal for funding applications for energy savings projects
3 Simple Steps to Start
- Note operational hours ( if split between areas in a building record this) Include times when building is open for cleaning/maintenance etc
- Get 12 months electricity bills together.
- Note down total annual kWh consumption –unit prices- costs in £s
