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Gas and electricity for restaurants explained
Business gas and electricity for restaurants
Whether you run an Italian pizzeria or a traditional Chinese restaurant, gas and electricity bills are likely going to make up a significant proportion of your business's monthly outgoings, because of the nature of the day-to-day work you carry out.
Inevitably, these gas and electricity costs have an impact on your bottom line, restricting your profits, and even limiting your ability to invest in other aspects of your business. As such, it’s important to ensure you’re getting a fair deal for your business' gas and electricity – one that maximises your margins and doesn’t leave you paying over the odds for your energy.
Switching energy suppliers
If you’re looking to save money on your restaurant energy bills, one of the most effective courses of action is to compare rates from different energy suppliers - no matter your typical restaurant energy usage. Once you’ve run a comparison and found a deal that’s right for your business, you can arrange to switch to the new contract when your existing one expires – and save hundreds (or even thousands) of pounds in the process.
When researching energy options, it helps to have your latest restaurant energy bill to hand so your energy supplier or broker can determine your specific needs – and how much your contract will cost. Ultimately, it’s likely that this figure will help you determine which deal is right for you.
Understanding the energy bill for your restaurant
Understanding your restaurant’s energy bill is useful in identifying the areas where you’re at risk of paying over the odds for your gas or electricity. Your energy bill will contain information about your contract, the prices you are being charged, and may contain information about other factors that contribute to the cost of your energy.
Some of the information typically included in your energy bill is:
- Standing charge: a set fee you pay every day regardless of your power usage. Lower standing charges tend to be around 28p per day for gas and 22p per day for electricity, although some suppliers offer energy with no standing charge.
- Unit rate: the cost you pay for each unit of energy you use, measured in kilowatt hours (kWh). Lower unit rates tend to be close to 3.8p per kWh for gas and 10.5p per kWh for electricity.
- Contract end date: this is when your current deal expires. If you’ve arranged a new contract, it will take effect from this date. If you haven’t, this is the point at which you’re likely to be placed on your supplier’s more expensive standard tariff.
- Notice period end date: this is the date by which you must notify your supplier that you will be switching to a different deal at the end of your contract. You will need to arrange a switch before this date to avoid your current supplier’s more expensive standard tariff.
- Climate Change Levy (CCL) charge: the CCL was introduced by the government as a way of encouraging commercial businesses to reduce their carbon emissions and increase energy efficiency. This charge is included in the cost of your energy bill.
- VAT charge: VAT stands for Value-Added Tax, and is a government-imposed charge for goods and services. This charge is also included in the cost of your energy bill.
Restaurant energy saving tips
While carefully selecting the right energy deal is the best route to saving money on your gas and electricity, there are smaller changes you can make that can also cut costs, such as raising energy awareness among your kitchen and restaurant staff to increase energy efficiency. Further steps you can take include:
- Make the switch to energy efficient CFL light bulbs or LED lamps that use up less energy and do not need replacing frequently.
- You might also consider installing occupancy sensors in areas of your restaurant that are not in constant use (such as a storeroom or cellar). This will prevent lights from staying switched on when no-one is in the room.
- Maintain a constant temperature on your thermostat to increase efficiency. It might also help to install systems that automatically monitor temperatures and adjust thermostats as needed. These systems can also adjust temperatures depending on the time of day, adapting to when your restaurant is most and least busy.
- Insulating pipes and servicing boilers regularly can also help reduce wasted energy.
- Making the switch to induction cooking can help reduce costs as there is less wasted heat than a traditional cooker – and it means you’ll use less power.
- Air conditioning is typically not required if the temperature in your restaurant is below 24-26°C.
- To lower costs, keep refrigerator and cooler doors closed as much as possible, and review the condition of refrigeration equipment, including door seals.
- You might also consider turning off refrigeration appliances that store non-perishable goods when not in use.
- While it can be difficult to reduce the amount of water used in your restaurant, it can be possible to reduce the amount of water that comes through the tap by installing water flow regulators. You may instead consider installing spray tap nozzles, which uses less water.
- Reducing the temperature of your heated water can also reduce energy costs.
- Double glazed windows, draught proofing and properly insulating walls and roofs are all ways you can reduce heat loss.