Knowing how much energy your business uses is important for several reasons, but it is crucial for budgeting.
In a commercial energy contract, a supplier will charge your business for each kWh of electricity or gas your company uses. So, your bills will correspondingly increase if your business energy consumption exceeds expectations.
In this article, we’ll look at the simple steps you can take to calculate your business energy usage. But let’s first start with the basics of measuring energy usage.
How do you measure energy usage?
Electricity and gas supplies both provide your business with a source of energy which is used in activities such as heating water with a boiler or powering desktop computers.
The quantity used to measure energy is “joules”. The scientific definition of a single joule is the energy required to heat one gram of water by one degree Celsius.
Regarding energy usage, the term “watt” is used. A “watt” simply means one joule of energy being used each second.
So, for example, a kettle labelled 2,000 watts uses 2,000 joules of energy each second the kettle is heating water.
Because watts work in individual seconds and in tiny increments of energy, this measure isn’t particularly useful when measuring the energy consumption of an entire business. So, instead, in business utilities, the unit “kWh” is used.
A kilowatt hour (“kWh”) is the equivalent energy of 1,000 watts of energy being used for an entire hour.
A kWh equals 3,600,000 joules of energy (1,000 joules in a second x 60 seconds x 60 minutes)
How much energy is a kWh?
3.6 million joules of energy is quite an abstract concept. So here’s an idea of the ways a single kWh of energy can be used:
One kWh of business electricity:
- A single cycle on a typical dishwasher
- Leaving a commercial printer on standby over a weekend
One kWh of business gas:
- Using a gas grill for half an hour
- A single large radiator heating for an hour
How to calculate your business energy usage?
There are two different ways to calculate your business energy usage, and in this article, we’ll explore both:
- Using your electricity or gas meter to measure energy usage.
- Doing a bottom-up calculation based on the devices that use energy.
Let’s start with the first and the easiest.
Calculating your business energy usage with your meter
Most commercial properties will have electricity and gas meters. The purpose of these meters is to measure the energy consumed by your property, so your business energy supplier knows how much to bill you.
The dial on the front of your meter measures, in kWh, the amount of energy passing through the meter.
To measure your business energy usage over a period of time, you’ll need to take two separate meter readings. Here’s how to measure your energy consumption over a month:
- Take a meter reading on the first of the month
- Take a meter reading on the last day of the month
- Subtract the first meter reading from the first
Here’s a worked example, if you take a reading of 004323 and then a month later of 004454, then your business has consumed 131kWh of energy.
Here’s our full guide to business energy meters for more information.
An easier way to measure energy usage with a meter is to use a business energy monitor that automatically takes readings and presents energy consumption data in an easy-to-understand format.
Calculating business energy usage: Considering each device
The energy that your company consumes will be the total energy used by each device.
It’s possible (although perhaps not practical) to consider all devices within your commercial property that use electricity or gas. Each device will have its own individual consumption when they are working.
To calculate the energy consumption of a particular device, you take the power rating of the device multiplied by the number of hours it’s used for.
Let’s take a straightforward case of calculating the energy consumption of a small one-person office in a winter month:
- A desktop computer is used throughout the day with a power rating of 200W(0.2kW). The energy consumed by the computer is 0.2kW x 8 hours x 20 working days = 32 kWh.
- The kettle is used three times a day to make tea. Assuming it’s a 2kW kettle that takes a minute to boil, it’s 3 mugs x 20 working days x 2 kW/60 minutes = 2 kWh.
- The lights in the office are on a timer, so they are only used during the day. The lights are an array of four highly efficient LEDs that use just 10 Watts each. So the energy used by the lights is 0.01 KW x 4 lights x 8 hours x 20 working days = 6 kWh.
- The boiler heats a single radiator during office hours using 0.8kW of gas. So assuming it’s on all day, it’ll use: 0.8kW x 8 hours x 20 working days = 128 kWh.
So in total, this office consumes 128 kWh of gas and 40 kWh of electricity each month.
What is the average business energy usage?
The business energy consumption of every commercial property is different depending on the following:
- What your business does.
- The number of people that work for your company.
- The efficiency of your devices.
- The insulation of your property.
However, here’s a helpful guide to typical annual energy consumption:
A typical home:
- Electricity: 2,900 kWh each year
- Gas: 12,000 kWh each year
A typical small business:
- Electricity: 10,000 to 50,000 kWh each year
- Gas: 10,000 to 50,000 kWh each year
How to reduce business energy usage?
Reducing unnecessary business energy usage directly reduces your business electricity and gas bills. For tips to lowering energy consumption, take a look at our guide to energy saving tips.
How much does a kWh of business energy cost?
It depends on the type of fuel you’re using for your business. A kWh of gas is typically 80% cheaper than a kWh of electricity.
The price of a unit of energy also depends on the current state of the wholesale energy markets. To get the current rates offered by business energy suppliers use the AquaSwitch business energy comparison tool.