How To Reduce Energy Costs For Small & Large Businesses
The United States Small Business Administration estimates that 40% of business expenses can be attributed to energy costs. As a business owner, you are concerned with your P&L and finding ways to reduce costs is a constant pursuit. Energy and utility costs are an expense item that can be reduced if you can implement some of these simple tips. Educating your employees on energy saving techniques, implementing the latest technologies, and making use of free services offered by your utility company are sure-fire ways to reduce your consumption of electricity, lower your costs and increase your bottom line.
1. Pay Attention To Your Equipment
2. Educate Your Employees
3. Pay Less For Electricity
4. Take a Peek at Your Peak Demand
5. Take Advantage of Free Energy Audits
6. Consider A Hybrid Energy Contract
In order to reduce energy cost for large businesses, certain customers are able to take advantage of on-peak and off-peak commodity pricing. Since the price of natural gas and electricity largely follows supply and demand economics, rates are typically less expensive during off peak periods. Larger users of energy can reduce business energy costs by locking in one price for on-peak periods, and getting a lower price for off-peak periods. Some large users even elect to float their power or gas rates on the index market during these off-peak hours, rather than pay a premium for a fixed-rate product.
7. In 2023, Use Utility Bill Auditing As A Strategy To Reduce Energy Costs
Utility bill auditors offer something very unique in the marketplace. A utility bill audit consists of a deep dive into your historical and current utility invoices to identify errors, make corrections, and even find refunds. Some utility bill audits can result in substantial business energy savings that can be implemented on a permanent basis. For example, in many deregulated energy states, retail energy suppliers will forget to ask for a tax exemption certificate from a tax exempt entity. If you have been paying sales taxes to your new supplier for some time, and your business is exempt from the tax, you are entitled to a refund.
8. See If You Qualify For A Cheaper Distribution Rate Schedule
Another way to lower energy costs at your business is to pay less for electricity or natural gas delivery. If you understand the anatomy of an electric bill, then you know there is a difference between energy supply and energy delivery costs. What most commercial customers don’t know, however, is that the local utility company offers many different delivery cost schedules. In some cases, if your energy usage meets certain requirements, you can qualify for a less expensive rate schedule from the utility. And, switching rate schedules is as simple as contacting the utility and requesting to switch. Hiring an energy broker to do this on your behalf might be a better option since they understand the terminology and requirements needed to get your new rate plan implemented.
9. Consider Alternative Fuels
Another great energy cost reduction tip is to look at your business operation and consider alternative fuels, when applicable. For example, if you are using electricity to heat water and you have the option to switch to natural gas, it could be a more economical solution. In some utility territories, natural gas is not available due to pipeline restrictions; however, many utility companies are willing to foot the bill to run new gas lines to businesses in order to add new customers. If natural gas is not available at your business, contact your local gas utility company to see if they have any plans to bring gas to your area or programs where they will offer to build gas lines at no cost to you.
10. Hire An Energy Broker In 2023 To Watch The Market
Lately, energy markets have been extremely volatile, and finding a favorable rate for your business has been challenging. Energy brokers understand the driving forces behind energy prices, what makes them go up, and what makes them go down. As a commercial customer, you have the opportunity to lock in a future price for energy when market conditions are favorable. An energy broker can watch the energy futures market on your behalf and notify you when prices are trending downward.