10 tips to help your small business weather rising electricity bills

Soaring electricity costs can wreak havoc on your small business as all indicators point to 2023 being another year where rising energy costs will result in an immediate liquidity crisis for businesses as rising inflation causes spending to slow down.

“South African small business owners are understandably shocked by the unprecedented tariff increases Nersa has approved. This will lead to inevitable increases in the prices of everything and push inflation well beyond the current 6-7%, already crippling growth and job creation,” says Roger Hislop, manager of energy management systems at CBI Energy.

Most municipalities with distribution licenses will also add a higher mark-up, meaning South Africans can expect their electricity bills to increase by as much as 22% or more in early April, depending on who their local supplier is.

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“These huge cost increases, coupled with continued low energy supply reliability, will not only strengthen the case for installing solar and battery storage, but also make it clear that private generation is only half the solution. Everyone needs automated energy management and load control systems to reduce waste and optimize power availability.”

According to Hislop, the only short-term solution is for companies to use electricity more efficiently, consume less and treat it like the scarce resource it has become. With many small businesses facing a financially challenging 2023, Hislop shares these ten tips to help them take control of their electricity bills:

1. Understand your bills:

Many business owners do not know what they are paying for, such as B. Usage time rates and penalties for notified maximum demand. If you understand these terms, some simple behavioral changes can help you reduce your company’s electricity bill by 20-30%.

2. Check your bills:

Install managed smart meters behind your utility meter to confirm your bill is correct. You can also see what your consumption trend is day-by-day to spot runaway usage before you get a month-end bill shock.

3. Measure, measure, measure:

Put managed smart meters on key distribution panels or large loads to understand where and when your consumption is happening.

4. Energy Design:

Create a simple plan to move around the parts of your business that are energy critical, such as B. IT infrastructure, production machines, computers and communication systems of knowledge workers.

Consider which areas are your first, second, and third priority electricity consumers to help you plan for energy resiliency systems.

5. Plan your loads:

By putting larger loads on an automated schedule, you can easily save 10% on your bill. Air conditioners, geysers, and hydroboilers don’t need to be on at night, and most office lights can be turned off as well.

Simple dumb timers can get the job done, although a better option are centrally managed load controllers that allow you to quickly adapt to changing conditions.

ALSO READ: Here’s how to build a financial buffer for your small business

6. “Only if necessary”:

Don’t leave anything running unless it’s needed. For example, install load controllers on the air conditioners in your meeting rooms. In combination with a room occupancy sensor, this means that you only use electricity when it is necessary.

7. Manage Your Physical Environment:

Check your office design and make it more efficient. For example, use less electric lighting and more natural lighting options like light pipes and train doors to reduce your heating and cooling costs.

8. Implementation of Small-Scale Embedded Generation (SSEG):

In South Africa, SSEG are generally generator sets or solar PV. Generators are a useful emergency solution, but their energy is very expensive per kWh.

The price for solar systems, on the other hand, is falling, although the need to catch up is keeping costs high. Do your research and make sure you are talking to an installer with strong credentials and a solid (referenceable) track record.

9. Apply load management to your SSEG:

By managing your loads with even a simple building energy management system, you can reduce the size of the inverter and batteries you need while ensuring they don’t shut down due to overload.

You can optimize this by “sweating in the sun” with energy – i.e. not wasting sunlight by starting the day with full batteries.

10. Consider the impact of energy security on your business:

Electricity costs fall directly below the bottom line, but reduced productivity, equipment or machine damage, and unreliable business operations have more serious negative effects. You must understand this in order to successfully navigate our energy crisis.

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