No one can doubt winter is on its way. And with the nights drawing in and temperatures dropping, many business owners will be fretting about an increase in their energy bills. It’s a time of year that gives SMEs good reason to think about energy efficiency, both in terms of how much electricity and gas they use in office equipment, lighting and heat, as well as how well-insulated business premises are to avoid energy waste.
It’s not surprising so many bosses worry about their energy use – energy bills have been increasing steadily over recent years, with one in three small and medium firms saying cost of energy is a barrier to growth. Service sector SMEs waste about £82 million a year on energy bills as a result of out-of-date technology, according to research by the Energy Efficiency Financing scheme, and about £414 million could be saved if they invested in more energy efficient equipment. The good news is help is available for bosses who want to be more green, cost effective, and energy savvy.
Costing the earth
Energy-smart enterprises keep utility expenses down, which is a persuasive argument for action for any business owner. Having provable green credentials is also a potential big win with customers. But many company bosses are motivated by a genuine desire to reduce their enterprise’s impact on the environment.
- Nine out of ten small companies want to be more energy efficient, according to recent research from the Federation of Small Businesses (FSB).
- Seven out of ten say protecting the environment is a major motivator for taking action.
- Almost 80 percent also acknowledge such measures can mean important cost savings.
- About a quarter of entrepreneurs recognise being more energy efficient can be attractive to customers, and can be used to promote their company.
How to make a difference
So, business bosses see the merit in improving their energy use. But how can they go about it? Installing low-energy lighting and office equipment is the first step most companies take. Adopting green technologies such as solar PV panels, energy-efficient motors, low-carbon air conditioning, or biomass heating are also popular measures. Smart meters can allow for more accurate readings, and are free to install by your energy supplier – all businesses will have these state of the art gadgets by 2020, as this official guide explains, plus how they work.
There are also simple, straightforward steps companies can take to improve their energy efforts:
- Check heating settings and thermostats, and that timers are set to the right dates and times. Get systems regularly serviced to ensure they’re working as efficiently as possible.
- Heating and air conditioning are turned off when they’re not needed, or if rooms are empty. Ditto lighting, be it turned off manually, or put on a sensor system so lights switch off when people leave a workspace.
- Doors are kept closed to prevent lost heat, and draughts are blocked up. Up to 30 per cent of heating costs can be saved by avoiding cold air entering a building.
- The office or workplace is sensibly laid out, with radiators uncovered, and staff located not too close nor too far away from heat sources.
- Office equipment and kitchen gadgets are turned off when not in use.
The Government has issued a detailed guide to SME energy efficiency, including lots of tips on reducing energy use in production equipment, such as motors and drives, compressed air, and refrigeration. And the Energy Saving Trust has further guidance on cutting your business’s energy use.
Paying for improvements
The FSB study revealed some barriers to firms taking the most environmentally sound course of action, including some not owning their premises, and therefore being prevented from making any real change. One in five simply wasn’t sure where to start. But for almost a third of business owners, a lack of capital to invest in improvements was the major problem. Updating building infrastructure, buying new energy-smart technology, and replacing heating systems all takes money, which many firms can struggle to find.
- Talk to the businesses you’re planning on buying new equipment from, as they may have specialist SME financing deals in place.
- Your bank may offer dedicated energy efficiency loan packages for SMEs.
- Consider alternative finance providers, such as short-term lenders, peer-to-peer loans, or asset finance to cover upfront costs.
- Look at the Energy Technology List to see if the item you’re buying is eligible for extra capital allowances from HMRC to help with the financial outlay.
- If you’re interested in renewable energy technologies, investigate Feed-in Tariffs and Renewable Heat Incentive Schemes to receive payback income for these new types of systems.
And always shop around to make sure you’ve got the best deal with your energy suppliers to save money on bills. We have given SMEs guidance on how to save money on energy bills on our blog before.
Much as it may seem expensive and a hassle to tackle these issues, the upfront costs will pay off in the longer term when your energy bills start to fall. And customers may well be impressed by your improved environmental efforts. Plus, you’ll be doing the right thing by the planet. So, consider your company’s energy use, explore where you can make changes, and act today – or you may risk being left out in the cold.