Business Energy Deals for Restaurants

Keeping a restaurant or bar running can use a lot of power, and saving on your energy tariff can allow you to put money into other parts of your business to help it grow.

As the coronavirus pandemic has squeezed the profits of the hospitality sector across the country, it is now more important than ever to make sure that you are on the right business energy deal for your needs.

Calculating gas and electricity costs for your bar or restaurant

There are several factors which determine the amount you’ll pay to power your restaurant.  To calculate the cost of energy per unit for your restaurant, suppliers will look at:

• Where your business is located
  • Energy costs vary across the country, and so your business’ location will impact the price you pay for your power.
• The credit rating for your business
  • If you have a good rating, your business will be seen as low-risk, and you will be able to access better rates.
• How large your business is, and how much energy you use a year.
  • The more energy your business uses a year, the cheaper the rate of energy per unit you will be able to access.

There will be other costs which will be factored into your business energy deal:

• The amount of energy used
  • This will be based on your gas meter and your electricity meter reading.
• Tax
  • Your energy bill will include VAT, sales tax, as well as the Climate Change Levy (CCL). The cost of paying the CCL is designed deter businesses from using too much energy, in a bid to keep their costs down.

How much energy does a typical restaurant use?

Energy consumption in a restaurant environment is always going to be high.  On top of food costs, your profit margin will be affected by the high amounts of gas needed to power the burners in the kitchen, as well as the energy needed for heating, air conditioning and lighting in the dining room.

The amount of energy your restaurant uses will differ hugely depending on its size.  A small restaurant can use around 15,000 to 20,000 kWh a year, but a large business can use three times as much.

What type of business energy tariff is best for bars and restaurants?

Unlike at home, where you can get a joint deal for your gas and electricity from a single energy supplier, businesses can only get separate tariffs for each energy type.  This means shopping for business gas deals and business electricity deals independently from each other.

It is also more difficult to compare energy deals from different providers, as each business will have to be assessed individually, meaning that you will have to contact as many providers as possible for quotes.  You can however run an online price comparison for your area to see who might be likely to offer you a cheaper energy contract.

How to cut down your business energy bills in a restaurant

On top of switching from your current supplier, there are several ways you can help your business cut its energy bills.

In particular, making your restaurant or bar more energy efficient is a great way to help cut operating costs. By making simple changes such as installing double-glazed windows, or upgrading your appliances to more up-to-date technology with higher energy ratings, you can save in the long run, as well as reduce your carbon footprint.

There are also simple behavioural changes to train your staff to make, such as turning the thermostat down by an extra degree or two, which can save you hundreds of pounds over the course of a year, while being barely noticeable for customers.  Making sure lights are switched off at closing time can also cut your electricity bill.