Posted on: 14 October 2014
For many small business owners energy efficiency is way down the list of priorities.
However, what many small business owners are missing is the positive impact that simple, and inexpensive, energy saving products and strategies can make.
Recently we spoke to Andrew Seaman, SME Business Manager of Mark Group, the UK’s leading energy saving experts, to find out about two cost effective energy saving products that could save up to 70% of your energy bills Andrew also shared his top tips for small businesses to become more energy efficient right now.
Making your business more energy efficient
The best way to achieve this is to invest in a solar energy system or energy efficient lighting, or both.
A solar energy system is the installation of photovoltaic (PV) panels to generate electricity for your business. The panels require little maintenance, they can last for decades and they don’t produce any greenhouse gases.
Energy efficient lighting uses high quality luminaires and automatically reacts to its surroundings to improve working conditions and reduce the cost of your energy. The technology also has a longer lifespan than traditional lighting methods.
The financial benefits of installing energy saving products
There’s a common misconception that energy saving products serve only two purposes: to reduce energy bills and reduce carbon emissions. Both of these are true, but for a small business solar energy systems and energy efficient lighting can do much more than that.
Andrew Seaman explains: “Whilst the overall incentive is reduced costs over the longer term, and therefore increased profits, it’s worth considering the improvements energy saving products can make to a business’s cash flow as well. It can also reduce its vulnerability to energy bill hikes. Overall energy saving investments are much lower risk and higher reward than many people think, largely because of the quick payback periods.”
Eligible businesses also have access to government incentives such as the Enhanced Capital Allowance scheme (ECA). This gives businesses enhanced tax relief on investments in energy saving equipment that meet the criteria. It allows 100% of the investment to be written off against taxable profit in the year that the investment is made.
“There are also several funding options available that can be tailored to suit a business’s operations and accounts,” adds Andrew. “These could mean that you are cash positive from day one.”
How energy saving products improve the operational side of your small business
You may be surprised to hear that any discussions about how you can improve the overall operational efficiency of your small business should include considerations about your lighting. Particularly if you run a warehouse or factory.
“Energy efficient lighting has a longer lifecycle than traditional lighting systems, thus reducing your lighting maintenance costs,” explains Andrew. “In addition, lighting control systems mean that the right amount of light is provided where and when it’s needed, so the electrical demand of your operations goes down.”
As a result, not only do your heating, ventilation and air conditioning costs go down (because the lights run cooler), but you free up electrical capacity too. Along with the noticeable improvements in lighting conditions that the whole business will feel, you can begin to see how energy efficient lighting can make a significant difference to your small business operationally.
What other advantages are there?
By reducing your carbon emissions, energy saving products can reduce the costs you have to pay for Carbon Tax, the Climate Change Levy or any CRC payments. This also gives your business an opportunity to comply with ISO 14001 (environmental management), which could give you a competitive advantage.
“There are also health and safety benefits,” adds Andrew, “which can make your small business more appealing to potential employees and help keep your existing members of staff. For example, complying with the European standard for the lighting of workspaces (EN12464) means that the lit environment is appropriate for the tasks being carrying out.”
Finally, installing energy saving products can provide useful publicity surrounding your company’s green credentials. It demonstrates innovation and a forward thinking approach to keeping carbon emissions and energy costs down.
How much could I save by installing energy saving intelligent lighting?
If you are a warehouse or you are in in distribution or production, Mark Group could reduce your energy bill by 70%.
“In simple terms this means that by installing an intelligent, optimised lighting solution you can expect to reduce your energy costs, attributed to lighting, by over two thirds, with a payback of under three years,” clarifies Andrew. “Obviously these are just guidelines - a technical site survey and optimized lighting design would be needed to produce a bespoke solution.”
Funding options for a business with limited capital
There are a number of financing methods to consider when looking into energy saving technologies. As well as traditional leasing or HP packages from traditional finance partners, other payment plan options are available. For example, Siemens Energy Efficiency Financing provides a cost effective way for businesses across the UK to acquire energy-efficient equipment.
“The Government’s Enhanced Capital Allowance (ECA) scheme means that if a business spent £1,000 on a new intelligent lighting solution listed on the Energy Technology List then it could claim an Enhanced Capital Allowance, giving a one-off 100% tax relief of £230.”
The Feed-in Tariff is another Government scheme that will not only help lower your annual fuel bills, it could also result in you getting money from your energy supplier. “The Feed-In Tariff means that you’ll be paid for any electricity you generate (even if you use it yourself) and for the surplus electricity that gets exported to the grid,” says Andrew.
“Mark Group is also working with Low Carbon Workspaces who offer funding for energy saving measures,” says Andrew. “Grants of up to £5,000 are available through this scheme depending on the project size and location.”
What energy saving tips could you start practicing today?
- Switch off all lights and electrical appliances at the mains rather than leaving them on standby mode
- Go for a walk and you'll spot machinery that is left on when not being used and other areas of energy wastage.
- It's no good fighting a lone battle - you'll need everyone on board if savings are to be made. Consider appointing an energy champion to find new ways of reducing energy use. They should report any waste that they notice and contribute ideas for improving the way things are done.
- Take regular meter readings and compare consumption over a number of months (as long as you remember to take into account factors like cold snaps). As the Carbon Trust notes, if your business manufactures something tangible try to measure energy use per product item. This will allow you to spot patterns and identify areas where savings could be made. Alternatively use a smart meter:
- Smart meters communicate directly with your energy supplier to give more accurate bills, no one has to come into your building to read the meter- let you see how much energy you are actually using and better manage your energy use. More information of smart meters can be found at https://www.gov.uk/smart-meters-how-they-work
- Intelligent lighting controls – this includes light level sensors, presence detection and motion sensors or consider dimmable controls
- Ditch screen savers – more efficient to switch to power down settings or install software that shuts comps down after certain time frame
- Install programmable thermostats – they automatically adjust temp settings based on time of day and day of week.
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