What are the best ways for business owners to generate energy savings?

The current shocking state of UK energy prices and the wider global energy crisis have been a common point of pain and consideration for all businesses and individuals recently. Of course, most people want to see action taken by the government to help reduce costs to a more manageable level. However, there are many ways people and, specifically businesses, can make their energy consumption more efficient and ultimately reduce costs. Simon Concar explains what the best ways are for business owners to reduce energy costs in 2023

From implementing simple energy efficiency practices to making more complex operational changes and investing in energy-efficient systems, there are a number of ways for businesses to reduce energy-related expenses, each with its own benefits.

To counteract the impact of the rising cost of energy, there are changes businesses can make now to not only save costs, but also to proactively prepare for the future, and ones that takes into account the severe effect that energy inefficient systems and practices have on our planet.

Evidence shows that businesses can generate significant savings simply by adopting energy efficiency measures and making behavioural changes, and with energy costs currently being one of the most substantial expenses to businesses, implementing the right energy-saving procedures and making the right investments should be a priority.

Solar power

Solar power is becoming increasingly prevalent as a source of energy production, gradually substituting systems that rely on fossil fuels to function, and solar panels have an important role to play.

The upfront cost of installing solar panels is a concern for many, and there’s widespread uncertainty regarding the exact length of time required to generate substantial savings after making an initial investment.

Previously, there was no denying that recouping solar panel investments took some time. However, new evidence suggests that following last year’s price cap rise, owners can now expect solar panels to pay for themselves five years faster, a drastic improvement from previous figures.

The price of solar panels has also dropped by 88% since 2010, becoming a much more affordable solution. Following this trend, solar panels installations have risen by 80% in 2022 alone, becoming more and more popular with business owners and homeowners alike.

And it’s not just solar panels that have proven to be effective in lowering energy costs – solar hot water systems can cause water heating bills to drop by 50-80%, helping owners save money in the long run by allowing them to generate heat without the need for fuel or electricity while also lowering harmful CO2 emissions.

Lighting

Most businesses require a large amount of lighting to run efficiently. Nevertheless, inefficient lighting is still widely in use across the UK.

Research shows that a switch to LED lighting, which makes use of highly energy-efficient technology, could help businesses lower electricity bills to a considerable extent. LEDs last much longer than traditional halogen bulbs, cost less to maintain and are 10 times more efficient, meaning they provide a significant return on investment.

Making simple adjustments such as switching to sensor lights in areas where continuous lighting is not required, installing timer switches to minimise reliance on people, as well as harnessing the power of natural lighting as much as possible represent other low-budget and undemanding yet effective solutions.

Building energy management systems (BEMS)

Typically, around 20% of a business’s annual energy expenditures is wasted through the use of energy inefficient equipment. Often, business owners are not aware of their reliance on inefficient energy systems or practices that are causing them additional expenses, meaning having access to reliable data is key.

BEMS monitor the energy performance of buildings via a single central platform, allowing for full control over lighting and power systems as well as heating, ventilation and air conditioning (HVAC) systems.

Crucially, this type of equipment can formulate records of performance, enabling owners to create reports of their energy expenditure, and therefore utilise real-time personalised data to optimise their energy usage.

From comparing daily profiles and hourly energy use to identifying energy spikes, BEMS can help owners discover trends and pinpoint opportunities to reduce unnecessary usage. Depending on their design, BEMS can save their owners between 13-66% on energy costs.

Heating

The cost of heating has become increasingly more prohibitive in recent months, and many businesses have begun to target this area as a priority in their efforts to reduce costs.

With 35% of heat escaping through window or door gaps and uninsulated walls, improving a building’s insulation is a widely known ‘quick fix’ to prevent heat loss and save costs, though others have started to look at generating extra value in the long term with larger investments.

Heat pumps have become progressively more popular for businesses in recent years due to their ability to heat buildings efficiently while keeping costs down – commercial heat pumps are estimated to save business owners around £3,000 per year, and as these systems’ technology advances, these figures are only likely to increase.

Amongst now ever-present sustainability concerns, heat pumps also provide an efficient alternative to relying on fossil fuels, playing a vital role in reducing carbon emissions.

With demand similarly being fuelled by both a desire to operate sustainability and the need to cut heating costs, electric heating systems are on the rise too, also prompted by the decarbonisation of the electricity grid. Electric space and water heating systems last 50% longer on average when compared to fossil-fuel heat sources, and require no regular maintenance, further bringing cost of ownership down.

Electrical systems optimisation

Aside from introducing obvious health and safety risks, relying on outdated electrical systems can increase the chances of unplanned downtime, reduce performance, cause difficulty diagnosing operational problems, and it may mean more time is required to secure replacement parts.

In some cases, investing in more energy-efficient systems is essential. Energy-intensive systems such as transformers, for instance, can be replaced by energy-saving models that also reduce CO2 emissions, and can help save on costs in the long-term thanks to increased energy efficiency.

It’s not always necessary to invest in new equipment to replace older systems, however – manufacturers are now turning their attention to the benefits of creating a circular economy, with an increased focus on retrofitting and recycling.

When it comes to electrical systems, extending their lifecycle and productivity as a priority can go a long way in keeping costs down, and eliminate the need to replace entire systems.

For instance, around 50% of high-carbon footprint electrical equipment including metal cabinets, steel plates and busbars can be utilised without being replaced for long periods of time, as long as outdated components such as switchgears and circuit breakers are properly maintained and upgraded when necessary.

Retrofitting low-voltage or medium-voltage electrical distribution switchgear, as opposed to installing new equipment, can generate cost savings of between 43 and 65%. These figures offer yet another positive example of how retrofitting can benefit business owners, allowing them to make energy-efficiency improvements without the need for single large investments, solving what represents one of the main challenges for many business owners.

Simon Concar is managing director of adi Electrical, a division of UK engineering firm adi Group.