Tackling Energy Costs
Social Enterprise Scotland conducted a survey in 2022, and the findings from the respondents identified that their energy costs had drastically increased, ranging from 10% to 400%. Energy costs add up to the burden to social enterprises, on top of inconsistent funding and a cost of living crisis. Minimising the costs of expenditure is very crucial for social enterprises to build financial resilience.
This learning resource is prepared from the presentations of Utility Aid and Business Energy Scotland on the Rural SEN meeting conducted on 22nd January 2025 and covers some practical tips to reduce energy costs and guidance on available support for organisations.
Reviewing your current bills for errors and estimates
Energy bill discrepancy is very common in the UK. Around 20% of supplier bills are incorrect, resulting in organisations overpaying for the energy. Reviewing the bills will ensure that you are not overcharged for your usage. If reviewing bills is a challenging task for you, there are organisations like Utility Aid, who can do it on behalf of you. Here are some things to look out for when you are reviewing the bills.
- Estimated readings
Suppliers are only legally required to read your meter at least once every two years. If you do not have a smart meter installed or your smart meter is not working properly, your bills might be based on estimated readings. In most cases, suppliers mostly overestimate rather than underestimate. Sending the correct meter readings at the start and end of every month to your supplier will make sure that you are only billed for the right usage.
- VAT and CCL Charges
Charities in the UK may be eligible for a VAT reduction of 15% from 20%. Check your invoice to see how much VAT you are being charged. If you are eligible for a lower VAT rate, it is important that you let your supplier know about this. Generally, they will give you a VAT declaration form to fill out and send back. Keep in mind that suppliers have different processes; some may only adjust invoices for the past year and then direct you to contact HMRC for further assistance.
If you are in doubt, get in touch with Utility Aid to see if you are eligible for a VAT reduction as a charity.
Metering charges
- Check whether you are on the right meter profile
Every organisation consumes energy differently. Energy profile refers to the category of energy consumption that your business falls into. There are nine profile classes in the UK. Check whether you are assigned to the right profile class based on your actual usage.
- MOP Contracts
Half-hourly meters are a type of meters that are commonly seen in community buildings. Such types of meters will have MOP (Meter Operator) contracts as well as energy contracts. These are handled by energy industry organisations to install and maintain the electricity meter supplies and communications back to the central grid. If you have a half-hourly meter, your supplier will automatically put you with a meter operator, and you could also be charged for things that are not relevant to your organisation. For example, if your building was used for a care facility before, and you are now using it for an entirely different purpose, chances are you are using the same meter now for different usage and different reasonings.
Here’s how you check whether you have a half hourly meter or not.
Keep an eye out for Utility Aid’s clinic sessions for free online advice on how to make changes to meter profiles that will help you reduce the costs.
The next free specialist support clinic for charities by Utility Aid will be on 30th April 2025. Use the link below to book your free one to one session.
Free Specialist Support Clinic for Charities Tickets, Wed 30 Apr 2025 at 09:30 | Eventbrite
Reducing energy usage on site
The best way to cut energy consumption is to create a culture of energy efficiency. This is a collective effort and make sure that everyone within your organisation is on board. Hold discussions with the whole organisation to brainstorm ideas and think about nominating an energy champion. Continue talking about the financial and environmental changes you are making.
There are several ways that you can reduce energy consumption on the site. Some of them are simple but can make a big difference to the energy costs.
- Automated Meter Reading (AMR)
An AMR lets you review your consumption in both operational and non-operational times. Identifying the usage patterns will allow you to make informed decisions on reducing consumption and saving energy costs.
- Check your Tariff
Pick your energy firm wisely. Make sure that you are getting value for money and if your tariff has dual rates, it may be sensible to carry out certain tasks at off-peak times.
- Controlling the Temperature
Heating, ventilation, and air conditioning can account for 60% of energy costs. Have discussions in your organisations to find out what is the reasonable temperature and make sure that this is being monitored. The Energy Saving Trust recommends heating between 18 to 21 degrees celsius during winter. A 1% thermostat adjustment can reduce energy costs by up to 8%.
- Unplug Devices
Many electronic devices continue to use energy even when turned off. This is called phantom energy, and it is a massive contributor to most organisation’s wasting energy on their premises. Simply unplugging the devices after use can surely help you to save some energy.
Unplug chargers, appliances, and electronics when not in use, or use smart power strips to cut off power completely. Or try having all computer peripherals (printers, monitors etc.) connected to power strips so one flip of a switch cuts all power.
- Use Energy-Efficient Appliances
When it’s time to replace appliances, choose energy efficient models with high energy star ratings. These appliances consume less energy, saving you money in the long run.
- Switching to LED Bulbs
If you can switch to LED bulbs, they use significantly less energy than traditional incandescent bulbs and last much longer, making them a cost effective choice.
- Proper Insulation
Insulate your building properly to maintain a comfortable temperature. Good insulation keeps your building warm in winter and cool in summer, reducing the need for excessive heating or cooling.
- Seal Leaks
Seal gaps and cracks in doors, windows, and walls. This prevents draughts, keeping your building’s temperature stable without overworking your heating or cooling system.
- Use Natural Light
Make the most of natural daylight during the day. Open curtains and blinds to allow sunlight in, reducing the need for artificial lighting.
- Regular HVAC Maintenance
Service your heating, ventilation, and air conditioning (HVAC) system regularly. Clean or replace filters as recommended to ensure they operate efficiently.
- Monitor Water Usage
Fix leaky taps and consider installing water saving devices in your toilets, like low flow flush mechanisms.
- Make Tea Responsibly
Only boil the water you need for your tea break refreshments.
Support Available for Social Enterprises
Most often, social enterprises may find it difficult to identify opportunities to reduce energy costs. Also, most measures require some kind of investment as well. Business Energy Scotland is an organisation funded by the Scottish Government to offer free, impartial support and funding to help small and medium-sized businesses save energy, reduce carbon, and cut costs. They assist organisations across Scotland in identifying and implementing energy-saving projects. Complete the support request form by clicking the link below to access free support from Business Energy Scotland.
Get support · Business Energy Scotland
Scottish Government SME Loan Scheme
Small-medium enterprises can avail themselves of loans from £1000-£100,000 towards energy efficiency and renewable measures. These are interest-free and unsecured, and there is no set-up fee, with a repayment period of eight years. If you are a SME trading for over 12 months, you may be eligible for this loan scheme. Additionally, a £30,000 cashback grant is also available for eligible measures.
Reach out to Business Energy Scotland to avail free support to find out if you are eligible for the grant by using the link below. Or call their friendly hub on 0808 808 2268.
Get support · Business Energy Scotland
Other Funding
Business energy efficiency and renewable heat grants are also available, which range up to 20-40% of the project cost for small and medium-sized enterprises (SMEs), with some programs offering maximum grant amounts in the range of £20,000 per business.
Other funding options may also be available through local authorities, local wind farms, and Local Energy Scotland (Find the funding information here: https://funding.scot/).