Business gas and electricity for offices

posted on 11/07/2014 00:00:00 by James McAllister

How do your office's gas and electricity bills work?

 

In a busy office environment, minimising the cost of gas and electricity can seem like a challenge.

Energy use in offices can often be more than expected, which pushes gas and electricity bills higher. With electrical equipment to run – not to mention heating in the winter and air conditioning in the summer – it might seem as if your bills are beyond your control.

However, if you’re looking to cut down the amount you've been paying for your office gas and electricity, one of the most significant steps you can take is to switch to a better energy deal. This will ensure you’re not paying over the odds for the energy you’re using, enabling you to minimise your energy expenditure and put the money you’re saving to better use. 

To secure an energy contract that suits your usage needs and offers you a fair rate for your gas or electricity, it’s best to compare prices from different suppliers. This can be a time consuming process, but an energy broker can make it quick and easy to save you time, money and hassle.

 

Office energy costs

There are a few factors which will determine the energy rates suppliers will offer you:

  • Your business’s credit rating. If suppliers believe there is a credit risk with your business, you may not qualify for certain rates. You may also be required to pay via direct debit depending on your credit rating, although some suppliers offer a discount if you pay via this model.
  • The size of your business.
  • Your location, as this can affect how much it costs suppliers to transport energy to your premises.
  • Your business type – if you're a sole trader or limited company, for example, you may pay less.
  • Your business sector.
  • Your business’s annual energy consumption. 

If you decide to change your energy supplier, you need to make note of your existing contract end date. Typically, you’re required to inform your current supplier of your intention to switch at least three months in advance of the end date. This will ensure that you are not automatically placed on your supplier’s more expensive standard rates when you current deal expires.

Understanding your office energy bill

The majority of costs displayed on your bill are based on your office's energy usage – but there are also charges for government-imposed taxes and operational costs that your energy provider will charge. Your energy bill will typically include the following costs:

  • Wholesale costs: These are the costs faced by energy suppliers to buy gas and electricity before providing to your business. These prices depend on the fluctuating rates of global commodities such as gas and oil. However, if you’re in a fixed contract, your rates will not be affected.
  • Network costs: These costs constitute the fees paid by your energy provider to use the transmission and distribution networks in order to deliver energy from power stations to your business.
  • Environmental costs: These are the costs charged by energy suppliers as they are required to contribute to certain environmental programmes enforced by the government.
  • Operating costs: These are charged by your energy supplier to cover the costs involved in operating your account and to keep it running smoothly.
  • Climate Change Levy (CCL): This is a government-imposed tax. It is designed to promote greater energy efficiency and encourage reductions in gas emissions. However,you will not be charged this levy if your daily electricity consumption is under 33kWh or your daily gas consumption is under 145kWh.
  • Value Added Tax (VAT): This is government-imposed tax, charged on goods and services. Depending on your usage, you may be charged at the standard rate or reduced rate. 

Office energy efficiency

In addition to switching your supplier, there are a number of other changes you could implement in your office to help reduce the amount of energy you use. Consider some of the following office energy saving tips:

  • Choose motion-activated lighting options for staff and stock rooms, as these will turn off automatically if no one is in the room.
  • Replace standard bulbs with low energy options such as CFL bulbs which use less electricity. If you use fluorescent tube lighting in your shop, you could also replace this for slim line fluorescent tubes, as these use 25% less electricity.
  • Encourage your staff to use equipment in a more energy efficient manner. This could be as simple as only filling kettles with as much water as is needed, or turning off computers or any other electrical appliances when not in use.
  • Read energy efficiency labels when purchasing new equipment for your office, particularly for appliances such as fridges, freezers and dishwashers, as these provide a good indicator of how much it will cost to run them in the long-term.

James McAllister

James is an online content creator at Make It Cheaper. Having previously created a variety of content for a number of websites and media outlets, James focuses on making it easy for SME owners to find interesting and engaging content - as well as useful guides and online tools.You can email James at james.mcallister@makeitcheaper.com

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