Understanding your business energy bill when they come through is key to making savings, Ever thought that your business energy bills are too confusing? Many people find it hard to read or understand with all the different dates, information and abbreviations.
And a kilowatt? How much energy is that?
Is that enough to power a kettle or a whole office? This is the sort of information that would be handy to know.
As a business owner, it’s likely you just get the bill, take a brief look and pay it without much thought.
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 taking a look through your bill to understand it and 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 – save money and increase profit.
Billing Period – as simple as it sounds, this is the period of time you have 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 what’s called an MPRN or MPAN number, which the supplier uses to identify your business address. This is normally matched with an MSN (meter serial number) shown on your meter.
Some suppliers have a daily rate, or a ‘standing charge’ that 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 are classed as a ‘micro business’ you can reduce their VAT to 5% if using less than 33kWh of electricity or 145kWh of gas each day? That could be enough to power your office and use your PC or laptop with some careful planning! If of course you are vat registered then at least it will 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 that will be more cost-effective.
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, this charge is included in the amount of energy you use, which can sometimes work out 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, which 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, though it will 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? There’s some handy tips provided here.
A survey or tailored guidance from a business energy consultant can make advise on all aspects of business energy use and how to find the best type of deal for you.
Carbon Change Levy
This tax is shown on your bill as a separate charge, which is paid to help cut down on greenhouse gas emissions. The idea of this is to encourage businesses to invest in more environmentally friendly resources.
Suppliers can offer what’s called a ‘green’ tariff to support eco-friendly projects by making a contribution to them on your business’ behalf.
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? Some suppliers have introduced government incentives for those that use either low carbon or renewable technologies in their business.
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 to see where you can save money on your business energy.
Looking to save money on your business energy use? Concise Energy can help save you money from their partnering suppliers. The team will work with you to create a tailored plan based on the right amount of energy your business needs.