Recent studies have shown that last year businesses consumed over 10% less energy while still paying more for their energy bills.
With the growing emphasis on sustainability and cost control, companies are under increasing pressure to reduce their energy consumption.
In this blog, we will go through why this is happening and why it is even more critical now for businesses to focus on reducing their energy use.
We will also help you reduce consumption and save in the long term.
The energy consumption decline
Businesses are becoming a lot more efficient, and this shows that the average UK business consumption has dropped by 12.3%, with the majority of this move being large businesses.
The drive toward sustainability, whether through technological advancements, better building designs, or more efficient operations, has allowed many companies to reduce their energy consumption.
From LED lighting upgrades to energy-efficient HVAC systems, there is no shortage of ways businesses are reducing their carbon footprint and cutting back on energy usage.
This drop in energy consumption has been seen as a positive trend. Less energy used means less environmental impact, and many businesses also enjoy lower utility bills—at least in the short term.
The rising price of electricity
While businesses are successfully cutting back on their energy use, electricity prices are climbing; last quarter they rose from £4584 to £5160. There are several reasons behind this.
1. Energy supply issues: Increased energy demand, coupled with a more volatile energy supply chain, has led to higher prices for electricity. Events like extreme weather, geopolitical instability, and the gradual shift away from fossil fuels have created supply constraints, which ultimately raise prices.
2. Infrastructure costs: The energy grid needs constant maintenance and upgrading, particularly as businesses and communities transition to renewable sources. This ongoing investment is often passed on to consumers, including businesses, which means higher utility bills regardless of consumption.
3. Market shifts and policy changes: The government and regulatory bodies are pushing businesses toward greener alternatives, which often come at a higher cost upfront. Although renewable energy options are becoming more cost-effective, the infrastructure for green power still requires significant investment, and those costs are gradually trickling down to the end user—businesses.
Reduced consumption, rising costs
So, while businesses are using less energy, they are still feeling the pinch when it comes to paying their bills. The increased prices mean that even smaller energy consumptions are still not enough to shield businesses from rising costs. If you are not proactively working to stay ahead of these costs, the savings from reducing consumption could easily be overshadowed by the increasing rates.
This is where the focus should shift: businesses cannot just aim to reduce energy consumption. Instead, they need to reimagine how they approach energy management.
Why keeping consumption low is more critical than ever
Despite the challenges posed by rising electricity prices, reducing energy consumption remains a key strategy for businesses looking to stay competitive in today’s economy. Here is why it is more critical than ever:
1. Control over costs: Energy bills are often one of the top operating expenses for businesses. Even with rising energy prices, the more efficient you are, the less impact those price hikes will have. Companies that focus on reducing consumption can effectively hedge against unpredictable energy price surges and avoid paying more for the same level of service.
2. Sustainability is a business imperative: More consumers and investors are prioritising companies with clear sustainability initiatives. Being initiative-taking about reducing energy consumption helps businesses demonstrate their commitment to the environment, which can be a competitive advantage. Not only does it align with societal expectations, but it can also lead to cost savings, improved brand loyalty, and enhanced reputation.
3. Regulatory pressure: The government is tightening regulations on energy use and carbon emissions. By reducing energy consumption now, your business can ensure it stays ahead of upcoming regulations, avoiding penalties and unnecessary compliance costs in the future.
4. Technology is advancing: The rise of energy-efficient technologies means that you have more tools than ever before to cut back on consumption in your company. With innovations in automation, smart meters, energy management software, and renewable energy systems, reducing energy use is more achievable and more effective than ever. By investing in these technologies, you can not only reduce costs but also improve operational efficiency.
5. Future-proofing Your business: The rising cost of electricity is unlikely to subside any time soon. By embracing energy-efficient strategies now, you will be in a better position for the future. Your company will be more adaptable to market shifts, price fluctuations, and global sustainability trends, allowing it to thrive despite challenges.
Practical Steps to Reduce Energy Consumption
So, what can your business do to address this growing concern? Here are a few actionable steps:
1. Energy audits: Regular energy audits are an essential first step. An audit can identify inefficiencies and areas where consumption can be reduced—whether that is by upgrading insulation, sealing leaks, or optimising equipment.
2. Invest in energy-efficient equipment: The upfront investment in energy-efficient machinery and technology pays off overall with lower utility bills. Equipment such as solar panels and voltage optimisers can reduce your electricity bills while bringing many different benefits to your business.
3. Implement smart energy management systems: By using energy management systems, businesses can monitor their energy use in real-time, identifying opportunities for savings and optimising usage. These systems can automatically adjust power use to ensure energy is only ever used when needed.
4. Renewable energy sources: While the cost of electricity may be rising, businesses that can generate their renewable energy (e.g., via solar panels) can offset these rising costs. In addition, the government offers incentives for businesses to adopt clean energy technologies.
5. Employee education: Employees should be a part of the energy-saving effort. Start educating staff about energy-saving practices, from turning off lights when not in use to reducing heat and air conditioning usage. This can lead to a significant reduction in energy consumption.
While it may seem counterintuitive at first, businesses must recognise that reducing energy consumption is more essential than ever. Even if your company is using less energy, the rising cost of electricity will continue to eat into your bottom line unless you take initiative-taking steps to mitigate those costs. By focusing on energy efficiency, businesses can not only save money but also meet sustainability goals, stay ahead of regulatory pressures, and position themselves as responsible corporate citizens in a rapidly changing world.
If you're ready to improve your energy efficiency whilst driving down energy bills then why not get in touch? With our carbon management plans we will give your business everything it needs to reduce consumption and maximise on savings. . Request a free quote now and start reducing your carbon footprint and energy bills today.
