Business energy audits explained – Helping to reduce business energy bills

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    Chris Godfrey

    Page written by Chris Godfrey. Last reviewed on May 26, 2024. Next review due April 6, 2025.

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      If you don’t know what the problem is, you can’t fix it. Many UK businesses spend thousands of pounds every year buying energy that simply goes to waste. Poor insulation, lost heat and cooling, inefficient lighting, machines, and systems. The wastage can be anywhere and everywhere, but if you don’t know which things need fixing, there is little you can do. This is where a business energy audit makes sense: Conduct a top to toe examination of the energy-consuming areas of your business, find the faults, then cut the waste. Business energy audits could reduce your energy bill by up to 40%. 

      What is a business energy audit?

      It doesn’t matter if you’re a residential energy user or a business energy user, being more efficient with your electricity and gas consumption means your energy bills get smaller. 

      A business energy audit is an analysis of how and where you consume energy in your organisation. The audit reveals those areas where energy is wasted and where more efficiency can be achieved. Because businesses typically use a lot of energy and waste can be abundant, the savings found by such an audit can be significant – possibly reducing your energy use by up to 40%.

      Business energy audits are conducted in one of three ways:

      • On-site external energy audit.
      • External energy audit by phone.
      • Internal energy audit.

      On-site external audit

      A professional auditor makes an on-site visit to your business. They thoroughly review your operations and highlight any changes you could make to reduce your energy consumption. The review will examine lighting, heating, air conditioning, plant, machinery, and any other systems on your premises that consume a lot of energy.

      Once the audit is complete, you will receive a detailed list of the changes you could make to reduce your energy consumption.

      External energy audit by phone

      A professional auditor also conducts this type of audit, but instead of visiting your premises, the audit is conducted over the phone. This  can be cheaper than an on-site examination. The auditor will ask you a series of questions regarding your business’ energy consumption. This information is used to build an efficiency plan for you to follow – indicating energy-saving actions to undertake and a guide to what it will cost to achieve them.

      Top tip: Some energy providers may provide a free over the phone business energy audit when you switch commercial energy tariffs.

      Internal audit

      Smaller businesses who wish to save money on their energy bill, but who do not want to pay a professional auditor, can conduct a DIY internal audit. This may not be as thorough as an audit from an external service but following a comprehensive checklist can still help you to identify energy saving opportunities.

      An internal energy audit checklist will look for major problems such as:

      • Air leaks.
      • Poor insulation.
      • Inefficient cooling and heating.
      • Inefficient lighting. 

      Once you are aware of the problems, you can decide which issues to fix to achieve the best efficiency in return for the lowest repair cost and the least disruption to your business.

      Top tip 2: You can also reduce your energy bill by ensuring you are paying the right rate of VAT and Climate Change Levy (CCL) on your electricity and gas, and that you’re on the best commercial tariff for your needs. To find out if you can benefit from these simple actions, get in touch with Swoop and speak to an energy expert.

      Why should I conduct an energy audit?

      An energy audit can deliver multiple benefits to your business:

      It can lower your bill

      The most obvious benefit. Reducing your business energy consumption reduces your energy bill.

      It can lower your exposure to energy price increases

      Energy prices are continuing to rise. Reducing the amount of your energy your business consumes means you are less affected by increases in the wholesale price of electricity and gas.

      It can reduce your impact on the environment

      An energy audit shows you where to make changes to reduce your energy consumption. Using less electricity and gas means you reduce your impact on the environment. A 2022 survey found that UK businesses waste enough electricity per annum to power London for seven years. That’s millions of tons of CO² created for no productive purpose.

      It promotes sustainability

      Sustainability is a hot topic these days and many businesses are successfully using their green credentials to market themselves to environmentally-conscious customers. Going green can be good for business. 

      By reducing your energy consumption and becoming more energy-efficient, you demonstrate good practice and sustainability, which can be publicised in your marketing communications. You could also expand this message by taking your sustainability to the next step, for example, moving to solar panels to generate your electricity, installing heat pumps to make your heating more efficient, and using thermal-capture systems on plant and machinery that generate a lot of heat.

      How much does a business energy audit cost?

      According to the Department of Energy & Climate Change, a typical business energy audit will cost around 1% of your total energy bills.

      How do I conduct an energy audit?

      Conducting your own energy audit is a simple two-step process: 

      Step 1: Analyse your past and current energy consumption

      Examination of your energy bills helps you better understand your energy use. Review the past 4 to 5 years of bills. Take note of the tariff you are on, the price per energy unit you are paying, and how much energy you are using. Are there any fluctuations in consumption and cost? If there are, what is causing them? For example, your consumption has spiked during a very cold winter because you needed more heating in your premises. Was this because your building’s insulation is poor? Could you easily improve your insulation to keep the warm air in and your energy costs down?

      Step 2: Physical examination of your premises

      Cutting your energy consumption and your bill means making tangible improvements to those areas of your business where energy is wasted. Examine all the energy consuming parts of your premises. Common areas where businesses can make big improvements include: 

      • Equipment usage – check efficiency ratings and maintenance schedules – sometimes, something as simple as a dirty air filter can spike a machine’s energy consumption.
      • Building insulation – check for leaks, draughts, heat and A/C loss. Double-glazing, cavity wall insulation, roofing insulation, and self-closing doors can make a big difference to your heating and cooling costs.
      • Lighting – are your lights left on when your business is closed? If so, why? Old fluorescent and incandescent lighting is inefficient. Switch to LED systems which provide better light quality and cost less to run. 
      • Heating systems – thermostat settings and accurate timers can prevent you over-heating your premises when your business is closed. Check maintenance schedules to ensure the system is working at its best.
      • Air conditioning systems – as for heating, thermostats, timers, and maintenance are key.
      • Ventilation systems – they should circulate fresh air without wasting indoor heat or cooling.
      • Gas and electricity usage – can you make use of off-peak tariffs? When are the best times to conduct your most energy-intensive actions at the lowest energy cost?

      When you know where the wastage is, prioritise the fixes that give you the best savings for the lowest implementation cost.

      How can I make further savings on my business energy bills?

      As the cost of doing business keeps rising, organisations must reduce their costs to stay competitive. Making savings starts with your energy bill. As well as conducting an energy audit, make sure you are paying the lowest rate of VAT and CCL, are on the best electricity and gas tariffs, and you’re claiming every refund and exemption you are entitled to. 

      Don’t miss out on savings. Speak to an energy expert to find the best tariffs, pay the lowest VAT and CCL, and keep your energy costs in check.

      Article sources
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      Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

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      Written by

      Chris Godfrey

      Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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