There are so many costs to consider when you run a company, and it’s easy for things to spiral out of control.
From your business energy bills through to your employees’ wages, keeping the books balanced can be a thankless task. This is especially true, it seems, if you rent your offices.
Commercial property rents are rising
According to recent reports, prime UK commercial property rents went up by 1.4% in the first quarter of 2016, as businesses continued to grow in confidence despite so much uncertainty surrounding the nation’s involvement in the EU.
For many companies, renting is the only option, and the fact that landlords are hiking their rates will obviously put greater pressure on their finances.
It’s imperative, therefore, that business owners are constantly looking for new ways to streamline their outgoings. The problem? A lot of these people mistakenly believe that because they don’t own their property outright, they are powerless to make changes that help to reduce costs.
Love Energy Savings is here to dispel this myth.
1 in 4 commercial renters say they "have no influence on energy-efficiency improvements"
A new study conducted by the British Chambers of Commerce and British Gas showed that many UK companies want more assistance in keeping their business electricity and gas bills down.
36% of the 2,100 firms (of varying sizes) that took part in the survey said that the most important thing the government can do to help businesses is to provide grants towards the cost of installing energy-efficiency measures.
Interestingly, the same report revealed that 27% of enterprises that rent their premises felt they had no say on the energy-efficiency measures deployed throughout their building.
This is a worryingly high percentage.
Gab Barbaro, Managing Director of British Gas Business, summed things up nicely by saying:
“It’s clear from this research that businesses in rented and leased premises need more help from their commercial landlords, and new regulations to tackle the least energy-efficient premises can’t come soon enough.”
Laws are already in place to tackle inefficiency in buildings
As Mr Barbaro rightly stated, more needs to be done to make commercial properties more efficient.
Thankfully, things seem to be moving in the right direction already.
Laws have been passed that will prevent property owners from renting out buildings that fail to achieve a minimum ‘E’ energy-efficiency rating as of 2018. That’s the good news. The bad news is that almost one in five commercial properties currently fall into the ‘F’ and ‘G’ categories, according to a study by Cushman & Wakefield.
This means there’s plenty of work to be done before this law takes effect in two years’ time. Business owners will suffer the consequences in the meantime, as those who rent inefficient properties will inevitably be using more energy than they would in an A to E-rated building.
Renters CAN take steps to lower their energy bills
If you’re not keen on the idea of waiting two years before the owner of your building falls in line with the government’s energy-efficiency legislation, there are steps you can take to lower your energy consumption (and your bills).
First things first, Mr Barbaro has advised business owners to reach out to their landlord and business energy supplier. After all, if you don’t ask, you don’t get!
“I’d urge all businesses to seek help from their supplier or landlord, and start with the basics. For example, by applying for a smart meter, businesses could much more accurately work out what’s driving their energy use and make considered decisions about how to reduce it.”
This certainly is a solid starting point and Love Energy Savings has put together an extensive guide to smart meters, which gives you all the information that you need.
Next, you should look for smaller changes that can help to lower the overall consumption of gas and electricity in your office. While you probably won’t be able to install expensive motion-sensing lighting systems or introduce a more efficient air-conditioning unit, you’ll be surprised at how much money can be saved by making subtle alterations.
- Incredibly, reports have suggested that we're now using more paper than we were five years ago. Reassess your company's policies on printing and try to migrate to more eco-friendly digital solutions.
- Turn your computers off! It seems obvious, but how many businesses check that they've turned everything off at the end of the day? As a renter, this is definitely something you can control.
- Set a consistent temperature - generally, the more you mess with your thermostate throughout the day, the more it will cost you. If you are in a serviced building, it might be the case that the property manager will control the temperature in your office. Make sure you communicate with them and maintain a consistent temperature throughout the day. Also, check that your heating is not used when your office is closed. It's up to you to check!
- Don't dismiss flexible working - if your employees are working from home, think of the amount of energy you could be saving in your office.
- Make the most of free expert help - it's always worth keeping an eye out for funds and incentives such as this one from Carbon Trust. While the bulk of these will mainly benefit businesses that own their premises, you can still make use of the expert energy-saving programmes that they offer.
Many of the tips in our guide on how to conduct a simple energy audit will also help renters to save cash.
Is it possible to switch energy supplier in a rented building?
This is where a lot of business renters (and domestic renters for that matter) really come unstuck.
Just because you don’t own the property outright, it doesn’t necessarily mean that you can’t find the cheapest business energy tariff for yourself.
*Note of caution* - everybody’s circumstances are different and it might be the case that the owner of your building has already factored energy costs into your overall bill. Similarly, your landlord may have an agreement in place with a certain supplier and will therefore be reluctant for you to switch.
When you first sign your lease agreement, make sure you ask about energy bills!
Phil Foster, Managing Director at Love Energy Savings, clarified the situation:
“If the tenant is responsible for the meter they can dictate the supplier, however, in a serviced office environment the landlord agrees the contracts and recharges the cost to the tenants.
“The landlord would be responsible for any unoccupied space and therefore it would be in everybody’s interest for them to obtain the best possible rates. As a rule, the agreed lease says who's doing what with energy.
“There is generally a sub clause that states the landlord will make the best effort to secure a fair deal for their tenant.”
If you do have full autonomy over your energy supply, don’t assume that you’ll receive the best deal automatically. Chances are the energy company that supplied the previous tenant will just roll the deal over, and it’s highly unlikely that this will be the best tariff for you.
Phil added that it’s high time that business tenants took greater control of their finances.
“With commercial property rents rising again, it’s crucial that businesses find ways to trim their outgoings. It’s frustrating that many renters seem to be spending money unnecessarily, simply because they’re not aware of the terms of their tenancy agreement,” he continued.
“Communication is key. Talk to your landlord, building manager and energy supplier at the earliest opportunity, and make sure you’re not getting a raw deal. Ask them if you can make energy-efficiency changes, and if they say no, find out why.
“Thankfully, laws are in place to make buildings more energy efficient. Also, large commercial property management companies are increasingly being judged on their environmental impact. They need to do their bit and so it’s likely that they’ll be receptive to any eco-friendly measures that you suggest.”
If you require any further advice on how to cut your energy bills in a rented property, our friendly team of experts will be more than happy to help. You can contact us here.