If you are a business owner, you know how much of your annual operating budget goes toward your energy costs.
Running a business of any size requires overhead costs, and the necessity of keeping your lights on and HVAC running is an ever-present reality – especially if you are a business that welcomes customers through your doors.
According to EnergyStar, small businesses will spend over $60 billion in energy costs in a single year. For some business owners, the energy plan and rates they pay to keep the business running can seem like an uncontrollable cost run by a mysterious company behind the scene… and better left that way.
In reality, you have more control over your energy plan than you may think! With a little time, effort, and research, you can put pen to paper and negotiate with your energy provider to create and customise a plan that is perfect for your business needs. As the energy sector has become increasingly deregulated, consumers have more control than ever in picking the best energy plan for their needs.
The result? A more efficient energy plan that keeps your team – and your budget – happy. Let’s take a look at some of the most important aspects of choosing the right energy plan for your business.
4 Considerations when choosing an energy plan for your business
Here are some of the most important aspects to consider when your actual energy efficiency plan is not working and when it comes to choosing the best energy plan for your business needs:
1. Do I need a fixed or variable rate?
In today’s energy market, many providers will offer businesses fixed and variable rates on their energy plans:
- Fixed-Rate: A fixed-rate is set at the start of the energy plan contract to ensure that the costs for energy remain relatively the same over time. This option is great for small businesses who want to “set it and forget it” when it comes to budgeting and paying for their energy costs.
- Variable-Rate: A variable-rate operates around the unpredictable changes in the energy market. As the markets swing during various seasons of utility availability, the rate will change with it. While this may cost a business more during high-use times, the savings are also available when usage and rates go down.
You can learn more about the various options without the bias of a company by researching the sites of public utility companies, which will often offer great FAQs and more regarding the differences between fixed-rate and variable-rate plans over time.
2. Should I consider a Green Energy Plan?
An increasingly popular option for many business owners is a renewable or “green energy” plan. As green energy has become more available, many energy companies are offering customers the option to choose between their more common energy plans and ones that are powered with renewable energy sources such as wind, solar, hydroelectric, and more.
So what is the benefit of choosing a green energy plan? While you may pay a slightly higher premium, over time you will begin to see savings as you draw upon the power of a much more cost-efficient option. However, for businesses, the true value is found in being viewed by customers and the community as eco-friendly and forward-thinking. As your reputation for being a company who is working to help protect the planet grows, you will begin to reap the benefits of brand loyalty based on your green initiatives.
In order to learn more about what green energy plans entail, and the way your business can switch or start a new plan, check comparison sites like Simply Switch (UK) or reach out to an experienced expert like the team at EnergyBot (US). By working with a team that has experience helping businesses make the switch to renewable energy, you can find out if this option is best for your company.
3. How long should my contract last?
Another great question to ask before choosing a plan should be in regards to the length of the contract for a particular energy plan. Depending on the energy needs of your business, you can often choose a length that best suits your situation. Remember the concept of fixed-rate vs. variable-rate? If you find a fixed-rate cost on an energy plan that you are happy with, you may want to consider locking in that rate for a longer contract in order to save money over the long-haul. (Just note that you will be unable to lower your rate if prices fall during your contract period!)
For those looking for a short-term option, many energy providers will offer discounted rates on shorter contracts. This option may be tempting if you are a small business who is needing to be flexible with your location and operating seasons. Just remember to take note of the time of year you begin your contract so that you can cash in on savings outside of peak usage times.
4. What if my business operates at unique hours?
For businesses that operate on schedules that aren’t common, many energy companies offer time-of-use plans, which are specific rates that are set depending on the time of day that your business operates.
If you operate with a lean toward the nocturnal, you may want to consider asking your energy provider if they offer time-of-use plans that offer discounts for your situation.
Make the informed energy choice
You may not notice it each week, but when you look back over the fiscal year, the amount you pay for your energy usage will make a sizeable difference in your budget. Imagine how much more you could accomplish if you knew you were saving money on your energy plan – moving those valuable budget euros /pounds /dollars to parts of the organisation that help you grow. By asking a few pointed questions such as those listed above, you can ensure that your business has the best energy plan for your needs.
A great way to also know what you are spending on energy on a monthly basis, is the use of an EMS – Energy Management Software. This kind of tool, such as DEXMA Energy Intelligence, allows you to detect inefficiencies, analyse, monitor, improve and optimise your consumption, to save energy costs and become more sustainable.
Editor’s Note: This original guest article was published here with kind permission from the author, Michelle Custodio from EnergyBot an innovative energy broker transforming the energy procurement process for businesses.
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