Financial Data
Updated 30 Mar 2020


How to reduce business electricity costs

Decrease your businesses costs by innovatively reducing your energy consumption.


Nicole Crampton, 04 November 2015  Share  0 comments  Print


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Businesses have been faced with the challenges of ongoing power outages and escalating electricity prices. NERSA approved a 47% electricity hike between April 2013 and March 2018 for businesses over a five year period. The fluctuating fuel price will also impact your business’s total energy bill if you’re relying on generators.

The electricity supply in South Africa is estimated to remain under pressure for at least the next five years: Increasing energy supply constraints, which will pose a real threat to the sustainability of your business.

To remain competitive in the current environment businesses must look for innovative solutions to overcome these challenges. Simple and cost-effective strategies can reduce your electricity, saving your business money as well as helping to retain electricity when load shedding occurs.

Related: How this farmer reduced his electricity usage by 20%

The faster you can reduce your electricity, find an alternative electricity supply and possibly even add energy to the grid the faster your business can start saving on its energy bill. With these improvements your business can be more efficient, have minimal downtimes and save more on your electricity bill every month.

Content in this guide

Energy hogs

Energy -holding

According to the Energy Efficiency Opportunities in South Africa Commercial Sector report conducted by Eskom, the main culprits of high energy use in the commercial sector are the following:

Heating, Ventilation and Air Conditioning (HVAC) is represents 26% of energy consumption within the commercial sector. Lighting 18%, Motors 14% and Geysers 8% contribute a significant amount to your businesses electricity consumption as well.

Along with machinery there are also other factors that cause high electricity usage. During colder months heating systems are activated, which generates more electricity. During the warmer months the cooling system is used, which also generates more electricity. Artificial lighting is used throughout most business buildings and can contribute significantly to your energy bill.

Appliances that require chargers like laptops and cellphones will continue to use electricity if left plugged in. Appliances like printers and geysers will continue to draw charges long after you’ve gone home for the evening. Faulty wiring and badly maintained machines can increase electrical use as well as be potentially dangerous.

Energy saving habits

Many energy saving habits can be accomplished on a daily basis by staff, customers and partners’ behaviour and habits. Here are examples of how you can decrease your energy consumptions with various practises and behaviours:

Adjust behaviour

Ensure your employees, shareholders and visitors are aware of your businesses campaign to lower energy consumption whether for both or either financial or environmental reasons. Educate your staff about how to keep electricity costs down and how to optimise your system so that less electricity is used.

Everyone who is aware of your businesses aim to save energy tend to go above and beyond to help your business save energy. Staff will use appliances more sparingly and switch off those that aren’t being used. People will come up with new and innovative ideas to improve your businesses energy conservation.

Operational measures

Well-maintained equipment and machinery will run more efficiently compared with dirty or worn equipment. For example, if your HVAC unit has a clogged filter this can cause efficiency problems, which means the unit will have to work twice as hard to achieve the same effect using twice as much energy and this can lead to the breakdown of the whole system as well as an unhealthy indoor environment if it isn’t correctly maintained.

Technology and systems

Newer technology has been designed to be energy efficient and if your machinery needs to be updated this can be a viable option for you. By evaluating your systems you can find ways to make them more efficient or cut out areas that are obsolete, which will reduce your energy consumption.

Related: Time for South Africa to ramp up the pace of greater energy efficiency

Practical energy saver tips

Energy -saving

Saving energy can be easy in a business, but staff, customers and visitors need to be educated on solutions. Here are seven easy practical ways for your business to save electricity on a daily basis:

1. Geysers

 By using cold water from the tap you don’t engage the geyser every time. When you use the hot water, cold water replaces the hot water inside the geyser and then the geyser starts to heat up the water to around 65ºC. If you hadn’t used the hot water the geyser would have simply had to warm the water when it eventually cooled down to a pre-set temperature.

As an example, instead of the geyser having to warm up the water from 10 ºC it would only have to warm it up from 45ºC to 65ºC which uses a lot less electricity. Older electrical geysers or incorrectly sized boilers are less efficient and ultimately big wasters of energy. You should convert to heat pumps or use solar water heating or a combination of both to conserve energy.

2. Lighting

Always remember to switch of the lights when leaving the office or if you’re worried about security you can install motion sensor lights that will light up when sensing any movement after a designated time.

By changing all your light bulbs to energy efficient bulbs, LED bulbs or CFL bulbs you can significantly reduce your energy consumption. Implementing the T-5 systems as well as daylight harvesting can also help with your energy consumption. Electronic control gear can save you more energy compared with mechanical control gear.

TAL, a leader in tile and construction adhesives found that by replacing their ceilings with transparent material they needed far less electrical light as they had more natural light. This helped them save a significant amount of their energy consumption.

3. Appliances and technology

When using the kettle only fill it with as much water you need. This will avoid the kettle having to use more electricity to warm up water you aren’t even going to use.

When you go home at the end of the day, switch your desktop or laptop off. If they’re left in standby mode they still use electricity and this is just wasteful since no one is even using it. If laptops are left plugged in and charging throughout the night, the charger will continue to draw electricity even after the laptop has reached full charge.

Before leaving at the end of the night and especially on the weekends turn off non-essential appliances like printers and fax machines at the wall plug. Sleep mode is like stand-by mode and still uses electricity even when the appliance isn’t being used.

4. HVAC systems

HVAC system’s use the most energy, by setting yours to average temperatures such as 23ºC in summer and 18ºC in winter the system won’t have to expend as much energy to reach those temperatures.

Alternatively you can even shift to an evaporative AC this has a higher efficiency rate and an efficient compressor. You can also just upgrade your system as majority of new technology are designed to be more energy efficient and work more efficiently.

Adjust your blinds and curtains so that your offices are warmed by the sun, reducing the amount of heating the rooms require. You can also block direct sunlight to help keep your building cooler, which can postpone switching on the air-conditioners.

By keeping the windows in your building closed while running the air conditioning will make it more effective and reduce the amount of energy the air conditioning will have to use to keep the temperature stable.

Switch off your HVAC unit 30 minutes before leaving the office. This will reduce energy consumption and the office will gradually warm up or cool down and not affect the efficiency of your staff.

Properly maintain your HVAC systems to ensure all of its components are intact and working efficiently. This includes motors, pumps, fans, compressors, ducting and filters.

You can use air-conditioner fans to draw in and circulate cool air into your building from outside if the temperature permits. The best time to do this is during the early morning hours. On the other hand, if it is a warm day you can also set your air-conditioner to circulate cool air instead of drawing warm air from outside.

Related: Save energy for business energy-efficiency savings tax incentives

Construction standards

Construction -standards

This is an easy and cost-effective way to help conserve energy and reduce costs. Processes for compliance have been introduced to national and voluntary buildings, measurements and reporting standards such as:

  • Building codes SANS 204, 10400XA
  • M & V standards 50001 and 50010
  • Energy management plan

If you’re remodelling your building or building from scratch this might be a viable option for you.

The ESCo Model

This programme helps businesses and consumers to reduce their electricity consumption. It is designed to advise you on which items to retrofit and replace with energy efficient technology solutions.

This is aimed at reducing demand during peak times which are 7am to 10am and 5pm to 9pm. This programme gives users an incentive to shift electricity usage from the evening peak period to off-peak periods.

The payment structure of this incentive is designed to reimburse verified savings and payments based on evening peak demand reduction achieved over three months. 30% of the contract’s value will be reimbursed as a performance payment at the end of the first 3 months. If savings aren’t achieved in the second three months, Eskom can request re-imbursement. The balance of the contract value will be reimbursed based on verified savings per three months over the remains of the sustainability term. 

Department of Energy tax incentive

This allowance for energy efficiency savings will offer tax incentives for energy efficiency improvements. This will be based on the improvements outlined in the Regulations for businesses and based on measured and verified energy savings. You will need to register your business with the South Africa National Energy Development Institute as well as SARS.

This savings tax incentive will be based on existing baseline energy efficiencies being achieved by participating businesses. This tax incentive is equivalent to 45c per kWh of savings when verified according to the verification process.

Energy efficiency and electricity consumption

Wind -turbines -generating -energy

Many businesses have started focusing on internally finding solutions to solve the problems of machine downtime and load shedding.  It’s advised that businesses need to take control of their own electricity supplies.

Find your peak consumption period by analysing your consumption patterns. You are paying a premium based on daily, month and yearly peak times. You’re paying more per kWh during the peak periods in the month and during the year. Identify how you can better manage your consumption during these peak times and attempt to shift your businesses energy peaks to periods of the day that will cost you less.

Generators

Businesses have had to buy generators to cover load shedding but these generally sit idle until a load shedding event occurs. Once you’ve identified your peak consumption periods, use your generator during those times as a cost-saving strategy.

Related: Considerations for buying a generator

Energy efficiency audits

There are many initiatives that offer service to help businesses reduce their energy costs. Different businesses and different sized businesses require different types of support to optimise its energy consumption.

There are some customised services specific to different sized businesses, such as:

  • Small businesses can offer: Help-desk services, workshops and publications
  • Medium businesses can offer: Four day energy surveys and follow-up services
  • Large businesses can offer: 60% subsidised energy-reduction consultancies that run over an eight month period

The faster your business can implement energy efficiency strategies the more successful it will become. The implementation of energy efficiency measures can improve the productivity, competitiveness and innovativeness of your business as well as gives you access to improved financials, financial subsidies and tax incentives.

Energy consumption is a very hot topic at the moment and it has been found that customers are willing to pay more to support a business that is environmentally friendly compared to one that isn’t. Going green is not only a socially responsible strategic move but its also cost effective and will save your business a significant amount. 

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About the author


Nicole Crampton


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