Saving costs with energy efficiency
Why should your business focus on energy efficiency?
It’s a fine balance running a business. You’re focused on maximising sales, keeping costs low, running operations smoothly and keeping your customers happy. When there are never quite enough hours in the day, why should you invest time in energy efficiency?
Whilst we know that it’s part of our social responsibility to use resources more effectively, the key reasons every business should commit to becoming more efficient in their use of energy are the significant cost savings that can be made, as well as the opportunity to protect your business from the impact of future energy price increases.
It might come as a surprise to most business owners that by implementing energy efficiency measures you could realise savings of up to 30% on your annual energy costs.
The effect on your bottom line can be significant. A 20% cut in energy costs can have the same bottom-line impact as a 5% increase in sales.
What practical steps can you as a business owner take to improve?
1. Establish an energy efficiency baseline
Firstly, you need to have a clear position on where you are now, to identify issues, aid your decision making and to give yourself a baseline against which you can measure future actions.
Start by measuring and monitoring your current energy use.
Your energy bills will give you a good starting point, however be aware that they provide a limited amount of detail. They may not, for example, account for the variable number of working days within a month, or seasonal temperature changes.
New initiatives such as half-hourly meters, sub metering and comparing consumption to local degree days can give you a far more useful baseline dataset.
2. Identify the waste
Once you can see your current energy usage patterns, you can then start to identify potential areas of inefficiency and wastage.
For example, are you still using energy during weekends when your office or factory is closed? By leaving your PC monitors or security lighting running over the weekend you’ll be paying for energy that you’re just not using.
Around a third of companies we’ve seen have significant energy consumption on the night tariff, mostly when the business is closed for the night, with the amount of consumption varying from 16% to as high as 33%.
Identify what is a comfortable working temperature for your employees and then check that your thermostats aren’t set too high. A 1o heating reduction could reduce costs by 8%.
Compressed air leaks in manufacturing companies are common. A small leak could cost your business over £700 per year if not repaired.
3. Research alternative technologies
If you’re spending £1,000’s on lighting costs, it’s worth investigating whether you are using the best technology available.
Technology has advanced considerably in the last few years with newer technologies offering significant savings on running costs.
LED lighting for example consumes far less electricity and the lights themselves last 25 times as long.
4. Create an energy efficiency action plan
Knowing what you should be doing is one thing, but it is implementing change that will get results.
Make someone in your organisation responsible for energy and draw up your energy action plan.
Some of your improvements may be behavioural changes, such as switching the lights off when you leave a room or turning off all monitors at the end of the working day.
Perhaps you can change production schedules to operate your highest energy using processes when energy tariffs are cheapest?
Others may require greater research and analysis of the potential savings, capital costs and payback periods, for example the capital investment of upgrading your current lighting to LED.
Decide on what improvements you want to commit to, who’s going to be responsible for them and when you want to implement them by.
Continuously measure and monitor the results so that you can quantify and improve on your energy targets.
By becoming an iiE member you will benefit from our accreditation process taking you from setting baselines and implementing processes to influencing change.
