Understanding your business energy bill is key to making savings. Ever thought that your business energy bills are too confusing? Many people find them hard to read or understand with all the different dates, information and abbreviations.
And a kilowatt? How much energy is that? How far will it one kilowatt go?
Is that enough to power a kettle or a whole office? This is the sort of information that’d be handy to know.
As a business owner, it’s likely you just get the bill, take a look and pay it without much thought. You may not question if it’s accurate.
But, this could be a mistake because your business could be spending more money than it needs to on its energy bills.
If you’re a business owner looking to save money, it would be time well spent looking through your bill to understand it. You might just see where you could be cutting back.
Understanding your energy bill and what each part means is key to this.
We’ve provided a guide to tell you exactly what each part of your energy bill means and how these can help you achieve what every business wants. Yes, that’s right – to save money and increase profit.
Billing Period – as simple as it sounds, this is the period of time you’ve been billed from and to.
Your bill will show any outstanding balance from a previous period and calculate this into what you owe now.
You ‘re likely to have an MPRN or MPAN number. An energy supplier uses this to identify your business address and is usually matched with an MSN (meter serial number) shown on your meter.
Some suppliers have a daily rate, or a ‘standing charge’. This covers some of the supplier cost of supplying energy directly to your business.
On top of this will be the charge per kilowatt of energy used. Supplier rates are different during the day and night.
Did you know that if you’re classed as a ‘micro-business’ you can reduce your VAT to 5% if using less than 33kWh of electricity or 145kWh of gas daily? That could be enough to power your office and use your PC or laptop with some careful planning! If you’re a VAT registered business then at least it’ll help with cashflow!
The amount for each period also varies, depending on whether you have a fixed or variable tariff. The varied fee changes according to the economy rates.
If you’ve had the same tariff for a while or have recently taken over an existing business, checking your bill could help you find a better tariff.
No Standing Charge – look at your energy bills for a ‘no standing charge’. This means you don’t have a set cost charged each day. Instead, the daily rate can often be higher, to make up not paying a standing charge. This way, it can sometimes end up costing more.
How is energy measured?
Electricity is measured in kilowatt-hours. Depending on how many watts an appliance is, will depend on how much electricity it needs to power it. There are 1,000 watts in a kilowatt.
A kilowatt-hour is what a 1000-watt product would use of energy in an hour. Your energy bill will break each of these down for you.
How much energy
According to research, the average usage of kilowatts for a small business is 15-30,000 kWh per year. This averages out to a little over £3000 per year. Of course, this can vary depending on what equipment you use and the amount of office space you have.
To give an idea, using a laptop all day uses between 2-3 kilowatt hours for around 8 hours of usage. This can, of course, vary depending on the make and model.
To give an idea, one kilowatt-hour is enough to power a desktop computer for 4 hours. For a 500-watt lightbulb left on for 4 hours, this will equate to 2-kilowatt hours.
Need to make more sense of your energy usage and contract? Then there’s some handy tips provided here.
A survey or tailored guidance from a business energy consultant can advise on all aspects of business energy use and how to find the best type of deal.
Carbon Change Levy
This tax shows up as a separate charge on your bill. It’s a tax that goes towards helping cut down on greenhouse gas emissions. The idea of this is to encourage businesses to invest in more environmentally friendly resources. This way, it ensures that more businesses can do their part for the environment.
Suppliers offer a ‘green’ tariff to support eco-friendly projects. It can do this by making a contribution to them on your business’ behalf.
It’s either this or your supplier will offer to use renewable sources of energy that matches what your business uses. This is all in a bid to boost more environmentally friendly energy sources.
Want to make use of green technology in your business? So, some suppliers have introduced government incentives for those that use either low carbon or renewable technologies in their business and these are working well.
There is the Renewable Heat Incentive (RHI) for technologies that generate heat.
The Feed-In Tariff (FIT) scheme is eco-friendly electric-generating technology.
Checking the details on your business energy bills and knowing what things mean can help. It’s worth knowing exactly what you’re paying for and seeing where you can save money on your energy.
Looking to save money on your business energy use? Concise Energy can help achieve this from their partnering suppliers. The team will work with you to create a personalised plan based on the amount of energy your business needs.