- Category:
Small Business Energy Savings - Published:
December 17, 2024
Tips for Small Business Energy Budgeting and Forecasting for 2025
The end of the year is the ideal time for small business energy budgeting. Your current year is wrapping up, providing you with patterns to analyze, trends that may affect the coming year and areas that need improvement. If your fiscal cycle follows the calendar year, you will also have a full year of data to work with. The idea is to make fact-based, reasonable plans to optimize your energy use.
Why create an energy budget for your business
Budgeting small business energy costs will help you optimize your electricity usage, control costs and contribute to reaching your goals for a sustainable business. By planning ahead, you can save up to 30% on your energy bill.
To achieve this goal, you will need to make no-cost adjustments, low cost changes, invest wisely and optimize operations and maintenance. At the same time, you can also improve the functionality and comfort of your workplace and possibly make it more attractive, too.
Small business electricity budgeting tips
Small business electricity budgeting is useful. Thankfully, it’s not at all difficult or time-consuming if you follow these tips.
1. Analyze past energy consumption and identify areas of potential savings
The first step in small business electricity budgeting is to understand how much energy your business uses, month-to-month. Doing this work also gives you a foundation for understanding current patterns. It establishes a necessary benchmark for measuring future improvements.
As part of this process, consider conducting a small business energy audit. This work not only establishes your baseline energy use, it also helps you to uncover areas where making improvements will get you the greatest results. You can do simple things like closing air leaks or changing employee habits to be more mindful of shutting off lights and equipment. Other changes require money and effort, like upgrading outdated appliances and machinery, replacing them with more energy-efficient models.
Before making any such changes, this step of analyzing where you use the most energy and where you can save the most energy is vital.
2. Consider factors that affect your electricity use
The next step in small business electricity forecasting is to consider what drives energy use in your business.
Your operations and equipment in various facilities for workers—including break room appliances, heating, lighting and air conditioning—are the things that typically use the most electricity. The number of people working in your facility, its size and capacity and hours of operation will also affect your power usage. Surging demand for your products and services may lead to higher energy usage. Consider seasonal factors, like exceptionally cold winters and hot summers, or busy periods, that drive up usage.
Next, consider ways to be more efficient. We’ve already mentioned replacing inefficient equipment and changing employee habits. You might also schedule energy-intensive operations during off-peak hours, and close off drafts. Knowing what is driving energy usage will help you identify ways to cut down energy usage.
Beyond usage factors, take a look at what you are paying for energy. When you understand small business energy pricing, you will be better able to secure the best energy price for your business. Now is the time to consider fixed vs. variable energy rates. Choosing a fixed-rate plan offers stable and clear pricing, making budgeting small business energy costs much easier.
3. Allocate funds for future energy-efficiency projects
While some energy efficiency changes are quick and low in cost, others require investment. If you’re replacing windows to stop heat and air conditioning losses or are replacing equipment with high-efficiency models, you will be spending serious money.
Your small business energy budget should include funds allocated to making these updates and replacements, along with an estimate on the return on the investment (ROI) you expect in terms of money saved, waste ended and carbon footprint reduced.
4. Set realistic goals for the new year
In addition to establishing a benchmark and putting in place a plan of action and targeted investments, your small business electricity budgeting should include specific and measurable goals. Examples of realistic goals might be:
- Reducing overall energy use by at least 10% by turning off equipment and lights when not in use, switching to LED lights and maintaining appliances and business equipment in peak condition.
- Optimizing HVAC systems to reduce the cost of heating and cooling your facilities by 15%. In addition to new equipment, use programmable smart thermostats, seal doors and windows, insulate and clean ducts and change filters often.
- Involve employees in energy saving with training sessions, incentives and encouragement to contribute their own ideas, aiming for 100% employee involvement.
- Cut energy usage by 30% by investing in smart energy monitoring and control systems.
- Trim spending by 10-20%, by opting for time-of-use pricing and then moving energy-intensive operations to nights and weekends when power is in less demand, and thus is cheaper.
These goals may be too ambitious, or not ambitious enough, depending on your industry and organization. Start with smaller goals and benchmark progress, increasing your goal numbers as you see what you are able to achieve.
Continuously track and monitor your energy budget throughout the year
Budgeting small business energy costs is the first part of an ongoing process of tracking progress and continuous improvement.
Set up energy tracking tools on site, partner with your energy provider and capture statistics to measure how much you’re able to save. Ongoing monitoring also uncovers areas where you can make improvements as the year progresses. Review and revise your small business energy budgeting plan frequently over the year.
With thoughtful energy forecasting and plans to optimize usage, you will be able to meet or exceed your energy-saving goals this year.
