Business Energy

A Complete Guide to Business Energy for Offices

group of people in office

A busy office needs a lot of electricity to keep it running day to day. The monthly cost of running your office can soon mount up, so it’s important to understand what you’re paying for and how to keep your costs down.

How are your office energy rates calculated?

The amount you pay for your office energy can be influenced by a number of things, including:

  • Your business’s credit rating - if suppliers think there’s a credit risk with your business, they may not offer you the most competitive rates
  • The size of your business
  • Your location - this can affect how much it costs suppliers to physically send energy to your premises
  • Your business type - you might pay less if you’re a sole trader or a limited company, for example
  • Your business sector
  • How much energy your business uses each year

When you get your energy bill, most of the costs will be based on the amount of energy your office has used. But you can also expect to see these costs included on your bill:

  • Wholesale costs: the amount your supplier has to pay to buy the gas and electricity they then pass on to you. These prices fluctuate depending on market activity, but if you’re on a fixed contract you’ll pay the same rate for the duration of your contract.
  • Network costs: the costs your supplier has to pay to use the transmission and distribution networks to deliver energy from power stations to your premises.
  • Environmental costs: suppliers have an obligation to contribute to certain environmental programmes enforced by the government, so these costs cover what they have to pay
  • Operating costs: these cover what it costs your supplier to operate your account and keep it running smoothly
  • Climate Change Levy (CCL): a tax on each unit of energy your business uses, designed to encourage businesses to become more energy efficient and reduce their carbon footprint. You won’t have to pay this if your business uses less than 33 kWh of electricity per day, or less than 145 kWh of gas per day.
  • VAT: a tax charged on goods and services - depending on how much energy you use, you might be charged at the standard 20% rate or a reduced rate.

What is an average business electricity bill?

The amount you pay for business electricity varies depending on your business’s location and your energy supplier, but these average amounts will give you an idea of what to expect to pay:

Business size Average annual electricity usage Average price (per kWh) Average annual electricity bill
Micro business 5,000 kWh 15.9p £900
Small business 15,000 kWh 15.1p £2,367
Medium business 25,000 kWh 14.7p £3,774
Large business 50,000 kWh 14.3p £7,234

How to make your office more energy efficient

There are lots of things you can do to make your office more energy efficient, and bring your business energy bills down:

IT equipment uses energy even when it’s in standby mode, so encourage your staff to switch equipment off when it’s not being used. Make sure you use the energy-saving features on things like monitors and printers, and shut down all your equipment at weekends and bank holidays. Simply turning off computers and monitors at night can save £35 a year per desk.

Encourage your staff to switch off office lights when they’re not needed. You could also use movement detectors, time switches and daylight sensors to help with this. It’s worth considering installing energy-efficient lights like LEDs and compact fluorescent products, as these use 80% less electricity than conventional light bulbs. You could reduce your costs by up to 15% by having the right office lighting.

When it comes to heating your office, electric heaters are one of the most expensive options, so it’s best to avoid these. Closing window blinds in the early evening can help reduce night-time heat loss. In warm weather, turn down the heating rather than opening windows, and turn down thermostat radiators - reducing the temperature by just 1C can save enough energy to print over 40 million sheets of A4 paper.

You can also make some bigger changes to your building to help reduce draughts - consider installing automatic closers on external doors, like fire doors, and putting self-adhesive thermal strips around your doors and windows to reduce draughts. Improving your roof insulation could help you keep up to 25% more heat in your building.

MoneySuperMarket has teamed up with Bionic to help to cut your office energy bills. Call today on 0800 088 6986 to compare quotes, or leave your postcode and they’ll give you a call back.

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