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Getting Help if Your Hospitality Business Can't Afford its Energy Bills

Lauren Valensky
4 Sep 2022

Even without the addition of a cost of living crisis, the hospitality industry can be a tough one to keep afloat. And with a whole host of overheads to consider, it's no wonder energy bills can seem like an almost insurmountable expense for some customer-focused companies.

However, even if you find yourself in a position where you can't afford to pay your energy bills, it's not lights out for your business - in fact, there are many great options available to you. So whether it’s help with cash flow, or a longer-term payment plan you need, we've compiled a comprehensive list of options you can access for support, so you can start to get your business back on track.

How are business energy bills calculated?

Before we get started, it's worth noting that your business' energy bills are likely to be made up of two charges - a daily standing charge, which is a fixed fee for having an active account with your supplier, and a variable unit rate charge, which fluctuates depending on how much energy you use.

While fixed fees can vary depending on your supplier and tariff, the unit rate you're charged is likely to be based on the wholesale cost of gas and electricity, which can also fluctuate. This means that, even if you don't use any more energy than normal in a given month, your bill could still go up or down depending on changes in the market.

Looking for your business's light-bulb moment?

How to reduce your business's energy bills

 Of course, the best way to reduce your business energy bills is by using less energy in the first place. And while this might seem like an obvious solution, it's often easier said than done - especially when you're juggling running a business and ensuring full customer satisfaction. So to help, we've compiled a list of some simple, yet effective ideas to get you started:

Educate staff on the importance of energy efficiency

Reminding staff to switch off appliance is one thing, but if your employees understand how their actions can affect your business's energy consumption, it's proven they're more likely to be conscious of their choices and make permanent changes that could save you money in the long run. So by doing this, you not only reduce your energy bills, but you'll also help to instil a genuine culture of sustainability within your business - a desirable attribute for many consumers. 

Monitor and reduce water usage

Since water heating is one of the largest contributors to your business costs and carbon footprint, by monitoring your water usage and reducing your consumption, you could see a significant decrease in your business' energy bills.

Whether it's only running dishwashers and machines when they're full, not washing towels and bedding until they're dirty, or installing water-efficient appliances, there are a number of ways to reduce your water usage - and your energy bills as a result.

Introduce energy-saving policies

Energy-saving policies are a great way to ensure that both your staff and customers are on board with your energy-saving initiatives and understand the importance of saving energy for your business and its costs. This makes it easier to actually monitor your business's energy usage while reducing it and your bills simultaneously.

Popular policies include encouraging customers to reuse towels and bedding during their stay and setting a minimum temperature for heating and air conditioning systems overnight or during periods of low occupancy.

Encourage your customers to recycle

Hospitality businesses are known for producing a lot of food waste - but did you know that this can also lead to high energy bills? Providing recycling bins and other environmentally friendly incentives like discounts for customers who bring their own reusable cups, doesn't just reduce your and your customers' waste production but the amount of energy needed to dispose of it and as such, the associated costs.

Invest in energy-efficient appliances and equipment

Not only will investing in energy-efficient items and appliances reduce your business's overall energy use and bills as a result, but many of them also come with government incentives, like the Energy Technology List (ETL), which can also reduce the upfront cost. 

Items on the list include LED lighting, solar thermal systems and low-temperature heat pumps.

Getting help with your business' bills

If you’re still struggling to maintain your business overheads even after reducing your energy consumption organically, there are still some alternative avenues you can explore for help.

Contact your energy supplier

Most energy suppliers will offer some form of emergency support for customers who are struggling to make ends meet - so be sure to ask about this too. They may be able to offer you a range of options, such as:

  • A payment plan: This could involve spreading the cost of your outstanding bill over a number of weeks or months.
  • A reduced tariff: If you're on a standard variable rate tariff, your supplier may be able to offer you a cheaper deal. This is particularly common if you're in debt to them.
  • A referral to a debt charity: If you're struggling to repay what you owe, your supplier may refer you to a debt charity like the Business Debtline from the Money Advice Trust, for free and impartial advice.

Government grants and funding

You could track down the most appropriate funding options for your company with the government's Business Finance Finder tool online, but we thought we’d make it even easier for you. Here’s a list of some of the best grants available. 

  • The Carbon Trust: The Carbon Trust offers interest-free loans of up to £5 million. Examples include the Green Business Fund, which offers both loans and grants to small and medium-sized businesses - including up to £5,000 towards the cost of energy efficiency improvements. 
  • Renewable Heat Incentive (RHI): The RHI is a government scheme that provides financial incentives to encourage the uptake of renewable heating technologies, like solar thermal, heat pumps and biomass boilers.
  • Department for Business, Energy & Industrial Strategy:  Formerly known as The Department of Energy and Climate Change (DECC), the DBEIS provides a range of funding opportunities for businesses, including the Energy Efficiency Fund, which offers grants of up to £500,000 to help cover the cost of energy efficiency improvements, and thus the cost of energy bills.

If you don't see something suitable here, you can search through all available using the Use the GOV.UK business finance and support finder.

Charitable trusts and foundations

There are also a number of charitable trusts and foundations that offer financial assistance to small businesses - many of which have an environmental focus and high upper limit on the amount they're willing to lend. Some great options include:

  •  The Shell Foundation: is a charity that focuses on helping social enterprises - businesses with a social or environmental mission - to scale up and become more sustainable. One of the ways they do this is by offering grants, which have previously been used to help businesses cover the cost of energy improvements and bills.
  • The Prince's Trust: have a dedicated Enterprise Fellowship scheme that provides funding and mentoring support to 18-30-year-olds with business ideas - including help with covering the cost of energy bills.

Save your energy for your business, with a powerful POS system  

Financial management is a huge part of running a business, but it doesn’t have to be stressful or complicated. Let your point of sale (POS) system handle things like reviewing sales, bookkeeping, and accounting tasks:

  • Receive, create and send invoices using simple templates and a built-in VAT calculator.
  • View detailed reports on profit margin, cash flow, and other expenses.
  • Integrate with the business automation apps that are right for your business.

If you're feeling charged about bettering your business, we'd love to hear from you!

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