Your Guide to Business Energy Efficiency

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    Guide Author

    James Longley

    Managing Director

    min read
    Last Updated April 5, 2023

    Energy efficiency is essential for businesses, like yours. With a sound and well-implemented plan, you can cut your and gas bills – in some cases significantly so.

    It can also bring positive environmental impacts, boosting your organisation’s reputation as an eco-friendly company committed to acting against climate change.

    Focusing on making your business more energy efficient can help you qualify for a variety of low carbon incentive schemes, which can help your company to save even more on its overheads.

    But what is energy efficiency? How is it calculated? What can your business do to reduce energy consumption within the workplace? And which levies and schemes does your organisation need to be aware of? Read on to learn more in our business energy efficiency guide.

    How to calculate energy efficiency

    To determine whether the devices and equipment your business uses are energy efficient, you’ll need to use a formula to calculate efficiency. It’s really simple and will allow you to identify the proportion of useful energy consumed in relation to the total energy supplied for the device to function.

    The only figures you’ll need to get started are an Energy Output and an Energy Input

    Take your Energy Output and divide it by your Energy Input. Then multiply it by 100 to get the total as a percentage.

    Example:

    You have a typical filament bulb that requires 100 joules (J) of energy to function. That’s its energy input .

    The bulb only has an energy output of 10 J – the light energy. The remainder of the energy is wasted as heat energy.

    You’d then do the sum 10 (energy output) ÷ 100 (energy input) to get 0.10, then multiply this by 100 to get a percentage – 10%, this would be your energy efficiency rate.

    It’s worth noting that some of the ‘wasted energy’ could be harnessed as a by-product. However, if it can’t be captured, it’s not going to provide any benefit. An energy audit can help you identify these opportunities.

    What is the difference between energy efficiency and energy conservation?

    Energy efficiency and energy conservation are closely related. Both can help businesses and households reduce gas and electricity bills. However, there are big differences between them.

    Energy efficiency generally relates to the technical performance of buildings, devices and equipment in relation to energy consumption. Energy conservation simply covers the measures taken to reduce the levels of energy consumption.

    Lighting is a great way to illustrate the differences.

    If, for example, your business replaces an old, inefficient fluorescent lighting system with new LED lights, the new lighting would still continue to perform the same function as your old system – effectively lighting the space. The big difference would be that it’d require less energy to perform this function – this is energy efficiency.

    If, for example, you and your staff simply adjusted your behaviours to cut down on unnecessary energy consumption by switching said lights off when you weren’t occupying a particular space, this would be energy conservation.

    Conservation-based business energy savings can be made by monitoring and controlling the use of heating, ventilation and air conducting (HVAC) systems, encouraging staff to switch off equipment when it’s not needed or by generally encouraging sustainability within the business.

    It’s largely a process of educating and gently reminding staff to be conscious of energy waste through training, signage or by appointing someone to champion and push energy conservation within the business.

    How to reduce energy consumption at work

    When it comes to creating your business energy efficiency plan, there are lots of different approaches you can take. Many of them will depend on the type of organisation you run, as well as its size and sector. However, we’ve picked out just four of the most common ones that could help your company cut its electricity and gas bills, as well as its carbon footprint, back.

    1. Install LEDs and motion sensor lighting – Did you know that, according to the Carbon Trust, 25% of a business’s electricity usage, on average, goes towards lighting? You can replace traditional halogen bulbs and fluorescent tube lighting, which are already being phased out in the UK, with LED bulbs. They use around 80% less energy to produce the same amount of light.

    You could also build on this by implementing motion sensor systems throughout your workplace. These systems are extremely effective in ensuring lighting is only switched in occupied spaces, to reduce the amount of electricity wastage.

    2. Install energy efficient equipment – Technology moves fast. You’d be surprised at just how outdated equipment and devices can become when it comes to energy efficiency – from PCs and printers in offices to conveyor belts and manufacturing machinery down on the factory floor.

    If your equipment is more than five years old, it’s likely there’s a more energy-efficient model now available. Just be sure to check the energy efficiency rating when upgrading old electronics – look for ‘A’ or above.

    3. Install a smart thermostat – With a smart thermostat, you’ll have programmable control over your HVAC systems – a way to reduce energy wastage at your fingertips. The system effectively allows you to monitor the temperature within your premises, and change it when the conditions warrant it.

    Some smart thermostats can identify faults within your HVAC system too – reducing any operational inefficiencies caused by faulty infrastructure.

    4. Install an energy management system (EMS) – EMS can have a revolutionary impact – they highlight the areas of your business or specific pieces of equipment that are wasting energy.

    EMS come in a variety of forms, but even the most basic systems can automatically send energy consumption data to a central computer, or app, flag anything unusual and diagnose problems instantly. This makes business energy efficiency much easier to achieve.

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    What business energy efficiency schemes and levies do I need to know about?

    The UK government has introduced several schemes and levies to encourage businesses in the UK to reduce their carbon footprints – with organisations doing more on the sustainability front enjoying greater benefits.

    Arguably the most significant of these schemes and levies are the Climate Change (CCL) and Energy Savings Opportunity Scheme (ESOS).

    Climate Change Levy (CCL)

    The CCL was first introduced in 2001 and is an environmental tax charged to businesses based on the energy they consume. It applies to businesses in almost all industries. Charities engaged in non-commercial activities, however, are exempt. The rate an organisation is charged depends on how much of the energy consumed is generated through fossil fuels, and how much is generated by the business itself.

    You can learn about the CCL in greater detail in our guide, Climate Change Levy (CCL) Explained .

    Energy Savings Opportunity Scheme (ESOS)

    The Energy Savings Opportunity Scheme (ESOS) is a mandatory energy assessment scheme that all large enterprises in the UK have to complete. It’s designed to ensure large businesses do enough to become more energy efficient and reduce their carbon footprint. Businesses are required to assess their energy consumption every four years and present new ways they can save energy.

    We’re now into Phase 3, with businesses required to comply if, on 31 December 2022, they had:

    • more than 250 members of staff, or…
    • a turnover of more than £44m and an annual sheet of more than £38m…
    • are an overseas organisation with more than 250 employees in the UK
    • are a company part of a larger organisation that falls into any of the criteria above

    The Phase 3 compliance date is 5 December 2023. Organisations that don’t comply with ESOS can face financial penalties.

    Looking to reduce the amount you spend on your business’ energy bills? Compare commercial electricity and gas rates today and find out whether you could save hundreds of pounds in just a couple of minutes.

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    ? What does this mean?
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