How to Cut Your Business Energy Costs

Where business energy costs come from

A business pays for each unit it buys, plus standing charges, network and policy costs, and the Climate Change Levy. There is no price cap for business contracts. Smaller users pay more per unit (DESNZ):

The biggest uses differ by business: lighting and heating in offices and shops; refrigeration in food businesses; compressed air, motors and process equipment in factories. Know yours before you spend money. A year of half-hourly data shows when you use power, and business electricity prices explains the rest of the bill.

Use less: the quick wins

From the Carbon Trust's SME guides (net zero guide, energy management guide):

• Routines cost nothing. Start-up and shut-down procedures, and switching equipment off when not needed. The Carbon Trust says bottom-line savings can often be achieved with no capital expenditure.
• LED lighting. Upgrading from conventional lighting to LED luminaires could cut lighting costs by up to 80%, with controls that switch or dim lights automatically saving more.
• Heating controls. Time and temperature controls set for how the building is really used. Weather compensation and optimum start controls can pay back in months.
• Boilers and pipework. A regularly serviced boiler can save as much as 10% on annual heating costs; insulate boilers, tanks, pipes and valves.
• Compressed air and refrigeration. Fix leaks, cut pressure, and keep condensers clean: often large savings where these run all day.

These come first because they are cheap, and because a site that uses less needs a smaller solar system to cover the same share of its demand.

Shift use into the day

Once you have solar, the most valuable electricity is the electricity you use as the panels make it, because it replaces power you would have bought. Exported power earns only what an export tariff pays. So look at what can move into the middle of the day:

• Charging. Forklifts, tools and vehicles charged late morning to mid afternoon instead of overnight.
• Hot water and laundry. Electric water heating, washing and drying run while the sun is up.
• Batch processes. Compressors, pumps and other flexible loads scheduled for daylight.
• Cooling. Pre-cooling stores and chillers at midday where the process allows.

Where a load can't move, a battery can carry midday output into the evening; whether it pays depends on the gap. See commercial battery storage.

Generate your own with solar

Every kWh of solar you use on site is a kWh you don't buy, at the price you pay, which for the smallest business users averaged about 38.4p in April to June 2026 (DESNZ). And HMRC says that where you are an auto-generator there is no requirement to account for the Climate Change Levy on self supplies of renewable source electricity (Excise Notice CCL1/3; see the Climate Change Levy).

Solar suits businesses that use most of their power in daylight hours, through the working week, all year. It suits them less if most use is at night. How to judge yours: how much solar your business needs and commercial solar payback.

Energy audits: what they cover and where to get one

An energy audit looks at the whole site: where energy goes, what could be cut, and what each measure costs and saves. Large undertakings must have one under ESOS. For smaller businesses:

A solar site survey is not an energy audit. It looks at one measure in depth: your roof or land, your daytime use and the right size of system. We say so because the cheap wins above should come first. Grants and loans by nation: solar panel grants for businesses.