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What is business energy efficiency?
Business energy efficiency is the practice of minimising energy use while maintaining the same operational output. It involves adopting technologies, processes, and behaviours that achieve the same result with less power.
In practice, this means lower bills, reduced exposure to rising energy costs, and a more sustainable way of working.
Why energy efficiency matters for businesses
Energy efficiency is no longer just about being environmentally conscious; it’s a direct way for businesses to cut costs, protect against rising energy prices, and stay ahead of tightening regulations.
Below, we explore three of the main reasons energy efficiency matters for businesses of all sizes.
Reduce business energy costs
Lower energy consumption translates directly into cheaper business electricity bills. Even small efficiency improvements can generate significant savings over time.
Environmental responsibilities
Businesses are under increasing pressure to minimise their carbon footprint. In the UK the Energy Saving Opportunity Scheme, requires large companies to identify ways in which energy efficiency can be improved.
Public image
Streamlined Energy and Carbon Reporting (SECR) requires large businesses to disclose their energy use, making improving energy efficiency a key tool for enhancing public reputation.
How to improve energy efficiency in your business
Rising business electricity prices place a significant strain on businesses, but improving energy efficiency is one of the simplest and most effective ways to reduce expenses and operate more responsibly.
There are many approaches available, but the starting point is often the same: identifying quick wins, planning for longer-term changes, and making use of expert support.
Quick wins
Simple steps like switching to LED lighting, adjusting heating schedules, or encouraging staff awareness can deliver immediate savings.
Long-term investments
Upgrading to modern machinery, improving insulation, or installing commercial solar panels helps cut energy use and stabilise future costs.
Expert guidance
A business energy audit and specialist advice highlight hidden inefficiencies, ensuring improvements are targeted and cost-effective.
How to measure energy efficiency in your business
Understanding how your business uses energy is the first step toward making meaningful improvements. By tracking usage and setting clear benchmarks, you can measure progress, spot inefficiencies, and monitor the impact of changes over time.
Smart meters
Smart meters and half-hourly meters provide real-time data on energy use, helping businesses track consumption patterns and monitor the results of efficiency measures.
Energy monitoring software
Business energy monitoring software uses automatic meter reading data to provide instant insights and visualisations for your business energy consumption.
Key performance indicators (KPIs)
Setting KPIs, such as energy use per unit of output or per square metre, makes it easier to track energy efficiency as your business evolves.
Long term business energy efficiency solutions
Optimising energy use often requires more than quick fixes; it takes planning, investment, and the right technology. The best business energy suppliers now support their customers in implementing these solutions.
Below are some of the most effective long-term options for improving energy efficiency.
Energy management systems
An Energy Management System (EMS) brings together data from business electricity meters and business gas meters and sensors to track and optimise energy use across your business. For example, an EMS can automatically turn off heating and lighting in unoccupied rooms using motion sensors.
Maximising natural lighting
Making better use of natural light reduces reliance on artificial lighting. Skylights, large windows, reflective surfaces, and open layouts help bring sunlight into workspaces, cutting electricity use while creating a brighter, healthier environment for staff and customers.
Installing a heat pump
Air-source heat pumps offer one of the most efficient ways to heat commercial buildings. When combined with good insulation and a green business energy tariff, they can significantly reduce heating costs and carbon emissions, while also removing the need for a business gas connection.
Improving building insulation
Poor insulation leads to energy loss and higher heating bills. Upgrades such as cavity wall insulation, roof insulation, and double glazing reduce wasted energy, lower business energy consumption, and improve a building’s Energy Performance Certificate (EPC) rating.
Replacement of older equipment
Outdated equipment often consumes far more energy than modern alternatives. Upgrading air-conditioning units, refrigeration, or other heavy-use machinery can cut electricity use by up to 30% while lowering ongoing maintenance costs.
Small business energy efficiency
Improving energy efficiency doesn’t have to mean a major investment. There are plenty of simple, low-cost changes that can help businesses cut commercial electricity and business gas prices straight away.
The ideas below are particularly useful for small business energy customers that may not have the budget for large-scale upgrades but still want to see meaningful savings.
Reduce boiler flow temperature
Setting your boiler flow temperature to around 60°C helps it run more efficiently. Rooms may take slightly longer to heat, but overall gas use and business gas bills will be lower.
Switch to LED lighting
LED bulbs and tubes use up to 80% less energy than halogen or incandescent lighting and last much longer. Upgrading fittings quickly pays for itself through reduced electricity costs.
Install occupancy sensors
Motion sensors in low-traffic areas such as storerooms, bathrooms, and stairwells ensure lights are only on when needed, cutting unnecessary business electricity use.
Adjust thermostat settings
Turning down your workplace thermostat by just one degree reduces heating demand without affecting comfort, as long as it stays within safe workplace temperature guidelines.
Seal air leaks
Draughts around doors, windows, and vents make heating systems work harder. Simple fixes like draught excluders or sealant can keep warm air in and costs down.
Use fans instead of AC
Ceiling or portable fans create a cooling breeze at a fraction of the cost of air conditioning, helping staff stay comfortable during hot weather.
Staff training and awareness
Encouraging employees to switch off lights, unplug unused devices, and use equipment efficiently can make a measurable difference. Visual prompts or short training sessions work well.
Make use of eco mode
Appliances such as dishwashers often include an eco mode that uses less energy and water. The cycle takes longer than a standard wash but usually delivers the same results, making it an easy way to cut consumption.
Financing of energy efficiency for businesses
Several of the business energy solutions proposed in this guide require a significant upfront investment.
Below is a summary of the financing support available to businesses for energy efficiency improvements:
- Local authority grants – Several local councils offer grants to support energy efficiency improvements for small businesses. You can search for available grants in your area using the gov.uk business finance support tool.
- Boiler Upgrade Scheme – The boiler upgrade scheme provides a £7,500 grant for replacing a gas boiler with a heat pump system.
- Green loans – UK banks offer a range of green loans to finance sustainable business activities.