With energy companies permitted to chase unpaid bills again, businesses won’t be able to rely on coronavirus-related payment holidays forever. This means that cost-saving through energy price analysis will be high on the agenda for small businesses looking to reopen after lockdown.
In a letter sent to their suppliers, Ofgem explained that although many customers are still struggling to pay their bills, it would be impossible to halt debt collection indefinitely. Small businesses will need to find other ways to keep costs down as they adjust to the challenge of operating under social distancing measures.
Small businesses overpay on their energy by up to £1k a year
The unprecedented nature of this crisis means there has never been a more important time for SMEs to look for ways to save on business energy cost where they can. This is especially important when considering that small businesses are estimated to pay an average of £289 more than necessary for electricity every year. Some statistics even suggest that this figure can be as high as £1,100 a year, or 50 percent of their annual bill.
Complicated tariffs and pricey exit clauses
Often, the cause of these high energy prices is due to energy suppliers locking businesses into unfair and expensive deals. It is no secret that many businesses are tricked into overpaying on their energy bills because of suppliers that overwhelm them with hundreds of tariffs and insist on pricey exit clauses. This unfair reality has prevented many small businesses from switching to the best deal and some contracts can go so far as to block a move to a new supplier.
If a business energy customer does not explicitly notify the supplier of their intention to leave at the end of a fixed deal, they are often rolled over onto a new contract which can be more than twice as expensive as the cheapest deal. Added to this is the fact that suppliers can bombard businesses with hundreds of different deals and it is not always clear how these options are different, making it difficult to ascertain if they really are choosing the best deal.
How to save money on your energy bill
Smarter Technologies has shared this advice for businesses looking to save on their bills and reduce their carbon emissions as they begin to reopen:
- Switch supplier. Switching to a cheaper energy supplier can be the fastest and easiest way to save money. Just make sure to read the T&C’s.
- Choose renewable energy. By opting for renewable energy sources, you will not only reduce your carbon footprint but your energy consumption could end up much cheaper in the long term.
- Manage your energy usage carefully. With technology such as smart meters, you can monitor and manage your energy consumption to discover if you are using too much and where you can potentially cut down.
- Switch to smart lights. By swapping your existing bulbs for integrated LEDs with smart tags you can set specific times and automatically shut down certain areas if a vacancy is detected.
- Monitor the temperature of your building. With modern thermostats you can monitor and manage the temperature of your chosen environment using sensors that provide you with complete remote control to maintain your buildings ecosystem in real-time, cutting a building’s energy costs considerably.
These five tips will help businesses cut down on their spending and assist them in recovering from the financial losses the pandemic may have caused.