Business Energy

What are the benefits of business energy audits?

8 Aug 2022

With the cost of energy at an all-time high and an accelerating drive to net zero, it's never been more crucial for businesses to understand their energy consumption. One of the best ways to map your business' energy consumption is by conducting an energy audit. Let's take a look at how the process works and its benefits.

What are the benefits of business energy audits?

Research by the think tank Green Alliance found that wasted energy across five UK cities cost businesses £60millon in energy bills. 

Organisations employing over 250 people are legally obliged to conduct a business energy audit. Although SMEs are exempt from the requirement, conducting an energy audit can be very beneficial in protecting the environment and the business's bottom line.

How does an energy audit work?

You can get a professional to conduct an energy audit for you, but you can also perform your commercial energy audit. If you're unsure, it might be worth getting a qualified professional up to compliance standards to do it for you.

An audit aims to identify areas where you can become more energy efficient. 

The auditor – whether you or a professional – will collect information on how much energy your business uses, considering factors such as lighting, heating, water usage, air conditioning and electrical devices. These insights help to inform energy-saving strategies and measures for your business.

According to Advantage Utilities, a good audit could lead to a significant reduction in energy use and often results in a 10% – 40% reduction in costs.

What are the benefits of an energy audit?

1. Lower energy consumption

As well as providing you with potential money-saving strategies by identifying energy wastage, energy audits help you work towards a greener business model. Saving energy is one of the most effective ways to reduce your carbon footprint. 

Your audit will identify areas where you can conserve energy. 

For example, your energy audit might reveal that your air conditioning and heating systems are running in tandem in part of your building, leading to wastage. Or a piece of machinery might not be running efficiently and could do with replacing, maintaining or upgrading

2. Reduction in energy costs

When wholesale energy prices are skyrocketing, conserving energy could help you drive down your business energy expenses. 

You might be able to save money on your bills by updating your technology or investing in better insulation, for instance. Even small things like using energy-saving light bulbs or upgrading your air conditioning system could make a difference. 

You may also want to explore building energy management systems. 

A building energy management system (BEMS) allows you to monitor and control energy-related building services across one or multiple sites, such as heating, lighting, ventilation, and air conditioning (HVAC) systems. 

3. Lower carbon emissions

The UK Government plans to decarbonise all sectors of the UK economy to reach net zero by 2050. Today's customers are aware of this and expect brands to take the initiative in protecting the environment. 

A study by SmartestEnergy revealed that 4 out of 5 people describe themselves as likely to choose a brand with a positive approach to environmental sustainability. Reducing energy consumption is a crucial step towards achieving net zero status. 

4. Compliance with regulations

Again, carbon reporting schemes like the Energy Savings Opportunity Scheme (ESOS) and Streamlined Energy and Carbon Reporting Scheme (SECR) are mandatory for larger businesses. 

However, most businesses carry out reporting in some shape or form. Taking steps to decarbonise now could save you money and help you prepare for future government legislation.

5. Mitigating business risks

Taking control of your energy spend and consumption can also help you mitigate business risks in times of uncertainty, such as the one we find ourselves in today. 

Your energy audit demonstrates your commitment to transparency, compliance and building a positive brand reputation. This could help you secure funding from investors too. Increasingly, investors are factoring climate-related risks into their decision-making. The greener your business practices are, the more "future proof" you are in the eyes of investors and other stakeholders. 

Is it time to switch energy suppliers?

There are so many steps businesses can take to become more energy efficient – from using LED light bulbs and installing motion sensor lighting to upgrading insulation and maintaining or upgrading inefficient equipment. 

You could also reduce your carbon footprint by switching to an eco-friendly tariff with a green energy supplier. Switching to different energy suppliers could save you money too. You might not be on the best deal available if you've never switched energy suppliers – or haven't done so for a few years. You may have rolled onto a more costly tariff. 

You can use Funding Options to compare business energy suppliers and access great deals from various business energy providers. Your dedicated account manager to help you switch, so you can focus on running your business. 

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Stuart Lawson

Chief Commercial Officer

Stuart is Chief Commercial Officer at Funding Options where he plays a key role in driving the growth of the business and its relationships with more than 120 partners. A finance industry veteran, he has a strong background in alternative finance, corporate and commercial banking, as well as global transaction banking.

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