Running your own business isn’t cheap. Along with rent, payroll, and supplies, there’s one more cost that can be surprisingly high: utility bills.
A carbon footprint calculator from the state of California provides an estimate. It says a retail store with just 7 employees and 9,700 square feet of space can expect to spend over $10,000 per year on electric bills. And that doesn’t even count the cost of natural gas or heating oil.
All that energy use has a cost for the environment, too. According to the California calculator, this retail store would produce 76 tons of CO2 emissions yearly from its electricity use alone.
Fortunately, there are ways to cut these costs. With just a few simple changes, you can reduce your small business’s electric bill and its carbon footprint too.
To figure out how to save energy at the office, first you need to know exactly how you’re using it. An energy audit can answer this question.
A professional energy auditor scopes out your workplace from top to bottom to assess your energy use. They check the insulation levels, search for air leaks, and examine the HVAC system, lighting, and other equipment. Then they present a report on your power use and a list of actionable tips for saving energy.
The cost of an energy audit depends on the size of your facility. EnergyLink, one company that performs commercial energy audits, says the cost ranges from $0.20 to $0.55 per square foot. That’s between $400 and $1,100 for a 2,000-square-foot building.
However, EnergyLink also says the cost of the audit shouldn’t exceed 10% of your business’s annual energy bill. If the auditor finds you enough energy savings to cut your bill by 10%, the audit will pay for itself within a year.
There are also ways to get an energy audit for less. Some utilities offer free or discounted audits. In addition, some state programs provide low-cost energy audits to small businesses, especially in rural areas. For instance, in North Carolina, rural small businesses with annual energy bills of $10,000 or more can get an audit for just $325.
Many utilities charge more for electricity during “peak demand” hours: the time when overall energy use is highest. In the summertime, peak hours tend to fall during the afternoon and early evening. Those are the hottest parts of the day when air conditioners are working hardest. In the winter, there are often two peaks, one in the morning and one in the evening. That’s when the demand for heating is greatest.
To reduce your business’s energy bill, find out what your utility’s peak periods are. Then try to move some of your energy use away from peak hours. Some strategies to try:
Offices and other workplaces use a lot of light. According to the U.S. Energy Information Administration (EIA), about 11% of all business energy use is for lighting. For a business that spends $10,000 on electricity, that adds up to $1,100 per year.
The easiest way to cut this cost is to use more energy-efficient lighting. One common form of lighting for stores and offices is fluorescent tubes. These are more efficient than old incandescent bulbs, but today there’s an even better option: LEDs.
Compared to fluorescent light tubes, LED tubes use about half as much energy and last more than twice as long. They’re also less likely to break. And the light they produce is better, with no flickering and no warm-up time.
LED light tubes cost a bit more up front—between $7 and $15 each. However, their lower energy use more than makes up for the cost. A calculator from Regency Lighting shows how much your business could save by making the switch.
Whichever kind of lights you use, make sure to turn them off when they’re not in use. That should go without saying, but in many workplaces, lights stay on all day in bathrooms, break rooms, or conference rooms—even when no one is using them.
When considering lighting options for your small business, don’t overlook natural light. On a sunny day, you can turn off some or even all of your electric lights and rely on free, clean sunlight.
However, sunlight also heats up the building. That’s a plus in the wintertime, but a downside in the summer. The added cooling costs from the extra heat could outweigh the savings on lighting.
To get the best of both worlds, block out direct sunlight in summertime and open the blinds in winter. But always close them back up again in the evening to reduce heat loss overnight.
Office equipment can also be a big energy hog. Commercial printers use 300 to 500 watts while printing and 30 to 50 watts in standby mode. Desktop computers use between 60 and 300 watts, while laptops use 20 to 100 watts. And don’t forget the appliances in the break room. A refrigerator uses 100 to 400 watts, a microwave uses 500 to 1,800 while heating, and a coffee maker uses 1,000 to 1,500 for each pot of joe.
One way to reduce power use from office equipment is to turn it off when it’s not in use. Shut down computers and monitors at the end of each workday. During the day, set them to go into sleep mode while they’re idle. Make sure to power down printers, copiers, and appliances as well (except for the fridge).
When it’s time to buy or lease new office equipment, look for energy-efficient models. Computers, monitors, printers, copiers, and appliances bearing the ENERGY STAR label all use significantly less energy. And consider replacing power-hungry desktop computers with more efficient laptops.
Sometimes, shutting off your gadgets doesn’t shut off their energy use. Many devices continue to drain a small trickle of current when they’re plugged in but not turned on. Computers, printers, chargers, microwaves, and coffee makers are all common culprits. This hidden power use is called phantom energy or vampire energy.
To reduce phantom power loads, shut down these devices at the source. If you don’t want to unplug them every night, plug them into power strips. Then you can power down several devices fully just by flipping a switch.
To still save more energy, use current-sensing advanced power strips. These can sense when a specific device plugged into them, such as a computer, has gone into sleep mode. They respond by automatically shutting down any attached peripherals, such as monitors and printers. When the computer powers back up, so do the peripherals.
The lion’s share of a business’s energy use goes to heating and cooling. According to the EIA, heating accounts for about 25% of total energy use in commercial buildings. On top of that, cooling makes up about 15% of a business’s electricity use.
The good news is that there’s a lot of potential here for savings. To reduce your heating and cooling bill:
Letting employees work from home is a good deal for everyone. You don’t have to pay for energy when no one’s in the office, and your employees don’t have to pay for commuting costs. Plus, multiple studies show workers are more productive working from home.
However, most employees don’t want to work at home full-time. They prefer to spend about half their time at home and half at the office.
If your workers prefer a hybrid schedule, see if it’s possible to have them all in the office on the same days each week. That way, you can leave the facility shut down completely on work-from-home days. Heating, cooling, and lights can all stay off.
You can’t make these energy-saving strategies work on your own. Your employees need to be on board, too. Let them know about your energy-saving plans and what they can do to help.
You’ll have most success with this if you educate employees about the benefits of energy savings, rather than just issuing new rules. Let them know how about how energy costs affect your business and the environment. Then explain how habits like powering down computers make a difference.
Better still, involve your employees in the planning process. Invite them to share their own energy-saving ideas in staff meetings or through a suggestion box. Consider offering some sort of prize or bonus for the best ideas.
Many cities and states offer programs to help small businesses save energy. Some programs provide grants to help you buy upgrades like solar panels or electric vehicles for your business. Others give you a credit on your taxes for energy-saving investments.
For instance, New Jersey’s School and Small Business Energy Efficiency Stimulus Program provides grants to small businesses to repair, upgrade, or replace inefficient plumbing fixtures and HVAC systems. (Only small businesses owned by women and minorities are eligible for funding.)
FreshBooks, a business software provider, offers a guide to tax credits for small businesses, including energy efficiency tax credits. To find other programs in your area, do an Internet search on “small business energy assistance” with the name of your city or state.
Community solar allows you to enjoy the benefits of solar power without installing rooftop panels. Local solar farms pump clean energy into the grid; residents and businesses can subscribe to a farm and get credited for a share of the power it produces. These credits, enabled by government incentives, are received as a discount on your own electricity costs—like a reward for helping the environment.
Most of these tips help you cut your workplace energy use. However, you can’t cut it to zero. What you can do is save on every kilowatt-hour your business uses by signing up for a community solar project.
Community solar works like this:
Perch will help match your business to a local solar farm in your area—you’ll support the operations of that farm so that it can generate and contribute as much clean, solar energy to the overall grid.
You aren’t directly receiving electricity from the solar power you’re supporting, but thanks to government incentives, you’ll get credits toward your own business’ utility bill. Essentially, you’re being rewarded with discounts on your own electricity because you’re enabling solar generation and development in your state. It’s a win, win, for everyone.
To be clear, with a community solar subscription, you don’t own any portion of the farm or its panels yourself. But you receive a share of the credits it generates based on its clean energy production.
Community solar has huge benefits for residents, business owners, cities and towns, and for combatting climate change. This clean energy solution is available to any eligible person or business, costs nothing up front, and lowers your utility bills. It also supports local economies, promotes energy independence, and strengthens the power grid.
By helping enable clean solar energy production, your business can be part of the solution to climate change.
The more of these small steps you take, the bigger the difference you can see in your business’s utility bill. And while you’re enjoying the savings, you can feel good about making your business greener, too.