Across the board, FDs are frantically searching for new, innovative ways to curb their energy spend without having an adverse impact on overall productivity. In many cases, you need to spend money in order to save money in the long term, so FDs must constantly think about maximising ROI.
With the global energy market clouded by uncertainty, it’s understandable that business owners are becoming increasingly concerned about their power bills.
A recent study conducted by Siemens showed that 89 per cent of UK manufacturers now discuss energy management at boardroom level, while 79 per cent of respondents suggested that keeping a close eye on power consumption and costs is now a "business-critical function". Around 67 per cent now have a senior director in charge of energy management and this is an area in which FDs in particular are becoming more involved.
It’s not just manufacturing company owners that are losing sleep over their energy expenditure - far from it. Across the board, FDs are frantically searching for new, innovative ways to curb their energy spend without having an adverse impact on overall productivity. In many cases, you need to spend money in order to save money in the long term, so FDs must constantly think about maximising ROI.
Are retrofits worthwhile?
You only have to look at the number of commercial and residential properties that now sport solar panels to see that people are taking a more proactive approach towards reducing their carbon footprint and lowering their bills. In a nutshell, FDs who are serious about slashing their energy bills will need to consider retrofitting their premises in some way.
Obviously, it’s hard to judge the initial cost of installing solar panels, as businesses will have different power requirements depending on their size and the nature of their industry. To give us some context, the Energy Saving Trust suggests that an average 4kWp solar PV system costs between £6,000 and £7,400 to install (this is a typical domestic installation and many businesses will require a much larger system). This will save the property around £750 a year in reduced energy costs, while at the same time saving the equivalent of 1.8 tonnes of carbon dioxide.
Judging by these figures, it will be a long time before businesses see any return on their initial investment. However, in an article published by Sky News in March 2014, consumer group Which? warned that energy bills could rise by as much as £600 per year by 2020, so any household or business that has fitted solar panels will obviously recoup their initial investment ahead of their initial expectations.
Smart technology is being rolled out across the UK and any FD worth their salt will already be fully on board with this.
There are some astounding innovations coming to market, with esteemed technology giants such as Google entering the smart energy sector. While there are plenty of cheap or even free smart meters available to businesses, a lot of FDs are opting to pay for more advanced systems that give them a clearer idea of where they can reduce their energy consumption.
Get your employees on board
While the aforementioned measures can carry sizeable upfront costs, there are plenty of things that businesses can do to reduce their energy outgoings that don’t break the bank.
To become more eco-friendly, it’s vital that all of your staff are on board. Hold regular meetings to ensure workers know they are partially responsible for the company’s overall energy consumption and simple behavioural changes such as not printing off emails unnecessarily or switching lights off when they are not in use can make a huge difference to your finances over the course of a year.
You might also consider introducing flexible working. More UK employees are working remotely and this can work in companies’ favour, as they are saving money on overheads. You might need to cover certain costs such as employees’ phone bills, so it’s up to the FD to decide whether this is a financially viable system.
Again, it’s all about assessing ROI.