Hey Big Spender
Energy as a strategic part of your business
As we head towards an uncertain Brexit and with key economic indicators casting doubt over future growth, your energy spend may well come under increasing focus.
How much does your business spend on utilities as a percentage of turnover? While you may think that saving money is all about shaving off percentage from headline pence per unit (PPU) rates, it might be more appropriate to consider energy as a strategic part of your business. For example, do you fix your energy prices for one year at the point of renewal? And would you do the same for other supplies into your business? Buying them all at the same price on one day for the next 12 months?
It might be better to look at more flexible contracts which allow you to take advantage of dips in energy prices or to review the price at fixed points during your contract. And even if you’re not a particularly high energy user, it’s worth pausing to consider whether the way you currently purchase energy still suits your business’ needs – have there been any changes in operations which might mean your current product is no longer the most appropriate choice?
The top 10 spending industries
If your energy spend is particularly high though, perhaps because you belong to one of the top 10 spending industries in 2019, you should probably look at when you’re using your energy. Could you change your consumption patterns? Should you look at recycling energy, and might you be eligible for some relief with an Energy Intensive Industry Exemption? This government scheme was introduced to help energy intensive industries (EII) in the UK compete with the lower energy costs of some of their European competitors. Eligible businesses are exempt from up to 85% of the costs of funding renewable and low carbon policies.
Irrespective of EII eligibility, if you consider energy as strategic to your business, it’s likely that you can move away from just the PPU discussion and start to regard energy as not just an overhead, but an area that can actually make your business more competitive.
Energy saving audit
We’d always recommend that you start off with an energy saving audit, providing your business with specific insight into where and when you might be wasting energy, and crucially, with recommendations on how you can make savings for your business. Systems exist now allowing you to analyse your energy consumption for single or multiple sites and compare it to previous periods.
Now is the time to take stock of your business‘ energy spend: check how you purchase it, understand exactly how you’re using it and then consider looking into the options available to help you to use less and pay less.
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