The rising energy costs are one of the main challenges businesses face today. While inflation is a major reason, it is not the only contributing factor to high energy bills at an organization. There are several factors at play that impact the expenses a business has to incur for energy consumption, some of which may be under your control while others are driven by external factors. If you are concerned about the high energy bills at your business, read this article to learn five reasons why it may be happening.
Increase in gas prices
Technological advancements and an increase in population have driven up energy consumption as the demand continues to grow. The ever-increasing energy demand has strained the supply chain and caused a considerable increase in the price of energy sources.
Take natural gas, for instance. Almost one-third of the domestic electricity production is from natural gas. Since the price of natural gas has increased manifold in the past few years, it has directly impacted the energy bills that commercial and residential facilities incur. Higher energy costs not only impact your expenses but also impact other elements of the business as well. As the supplier passes the cost increase on to the business, it affects the overall profitability in the long run.
Increase in tariffs
When the electricity and gas contracts for a business come to an end, it is automatically rolled over to an expensive tariff, referred to as the rollover rate. This results in an instant hike in your energy bills and may cause a strain on your overall operational expenses budget.
To avoid this, you can ask your current supplier to offer you a discounted deal. Alternatively, you can compare electric company or shop around for gas and electricity suppliers to find a better rate when your current contract ends. In this regard, you can engage the services of energy brokers who can help create an energy plan for your electricity and gas needs and get you the best possible rates for gas and electricity supply.
Changes in the weather
Depending on where you are based, weather changes may impact the energy consumption in your organization. In the past few years, extreme weather conditions like storms and heat waves have directly impacted the demand and supply of energy, disrupting supply in some instances and driving up demand in others.
In the instance of a temperature spike, you may experience a considerable increase in electricity consumption, leading to an increase in energy expenses. Similarly, if you are based in an area where the energy infrastructure has been damaged due to a weather calamity, you may be charged for repair expenses.
Inefficient energy utilization
You may not think much of it, but if the equipment in your office is not utilized efficiently, it can affect the electricity bills. Your employees may leave equipment like the computers, microwave, printers, and photocopiers on standby or dormant mode instead of turning them off when the equipment is not in use, for instance, at night or over the weekend.
So if this is a general practice in your company, it may be time to bring a change and ask everyone not to let the machines run when not in use. Also, ensure to turn unnecessary lights off. These may look like small efforts, but the effects will be far-reaching.
Moreover, if the kitchen appliances or the IT equipment are old or outdated, they may consume more energy, which will also affect your bills. Hence, it is important to ensure regular maintenance and cleaning of the equipment and upgrade if required.
Poor insulation in the facility
If you have poor insulation in your business facility, it will automatically drive up energy consumption. If the existing insulation is inadequate, it may lead to cold air leaking in and warm air leaking out of the building. When the weather is cold, poor insulation may lead to a considerable amount of energy being lost through the floors, walls, windows, ceiling, or doors, resulting in more energy consumption.
A regular energy audit can help identify the loopholes in the existing insulation so you can devise measures to upgrade the insulation in your business facility and seal any gaps or cracks in the windows and doors.
Electricity and gas expenses are the most major expenditures that businesses incur, and if you are running a business, you may be concerned about the escalating energy bills. While factors like inflation and rising energy source prices are beyond your control, you can take a few measures to optimize your energy utilization and lower your costs in the process. In this regard, switching to low-cost energy suppliers and vying for efficient energy consumption are viable options that can help you bring down the energy bills at your business.