Header image credit: Joshua Rodriguez
It’s the issue that raises many eyebrows and can no longer be skirted around. Rising energy bills in Australia are a major concern for all, with a 2017 report by AI Group finding that businesses could pay up to $8.7 billion a year for power in the near future.
And the ones that’ll feel the bulk of the brunt? Small businesses. Particularly the ones in high-consumption industries like hospitality, have been said to be “casualties of a failed system”, with many at risk of laying off employees or closing down if prices don’t come down. Sounds scary? We think so too.
The latest data from the Australian Tax Office shows restaurants are already operating on very lean profit margins (8–15 per cent on average). Evolving consumer expectations also add the stress of keeping up with regularly changing trends and maintaining a stellar online reputation on top of everything else.
In the face of so many challenges, taking the necessary steps to reduce your energy bill will not only significantly lessen the financial burden you face running your hospitality business (by thousands of dollars potentially), it’ll also genuinely make the world a better place.
1 . Dive deep into your energy bill, and not just once
It isn’t enough to just make a mental note to turn off any appliances you see unnecessarily running, or reminding your staff to be more conscious about their energy use everyday.
Research has shown that only 50 per cent of Australian business owners regularly review their energy bills. Instead of glossing over the bill and zeroing in on the large number at the end of the page, paying attention to your statement (at least over a number of months) lets you see:
- if rates have increased or decreased (if you’re on an energy plan with a variable rate, your provider can freely change what it charges you at any time, as long as they notify you).
- if you’re being charged on a daily, monthly or quarterly basis, or in tariff blocks.
- whether you’re using more or less energy on average than in the past. If you’re seeing a bigger bill without any increase in patronage, this could indicate a problem somewhere.
- if you had to pay any additional fees, such as for a late payment.
If you’re being charged different rates for different time periods, your bill will also reveal when your establishment is using the most energy. This will come in handy when you do an energy audit or if you’re planning on shopping around for a better deal.
2 . Measure how much energy you’re wasting so you know where to start reducing
Energy audits are not new in the hospitality industry, and it’s not as hard as it sounds. For smaller establishments, it simply means measuring all the ways your business consumes energy so you can identify problem areas and see where you can start reducing most effectively.
According to research by the Australian government, there are a number of ways to measure energy use in your venue:
- Electricity monitor displays are a relatively cheap way of monitoring your energy usage in different spots around your venue. These need to be installed by an electrician however, and cost around $70–$130 each. Putting one in a high traffic area can encourage staff to be more aware of their energy use.
- Plug-in appliance monitors are extremely simple to use (as the name suggests, you plug your appliance into the monitor and then connect it to a power point) and lets you compare how much it costs to run old appliances compared to energy-efficient ones. The downside is of course needing one for every appliance you use, but they are pretty cheap and can be found for around $20–$35 online or at major hardware stores.
- Smart meters record your electricity consumption at various intervals (say 30 minutes) and sends the data back to your provider who charges you accordingly. According to Energy Networks Australia, accumulation meters (the old ones that you have to manually read to know what you’ve used) are currently installed in approximately 70 per cent of Australia homes and businesses. These meters do not permit time varying tariffs (schemes that reward you for using less energy at peak times). If you can get an upgrade from your energy provider, you’ll be able to get very detailed online reports and even obtain real-time information about your energy use if you link your smart meter to a wireless display. (Tip: If you’re in New South Wales and request to move on to a time-of-use tariff, you can get a smart meter installed.)
You might be surprised at what you can discover doing an energy audit. Issues like staff members leaving the freezer doors open during service (thus wasting more energy) is the sort of thing that will come up during an energy audit, and the quicker you address them the better.
An audit will also highlight if any hardware changes need to be made, for example, to replace faulty seals on fridge doors. If your fridge door has a damaged gasket and doesn’t shut properly, your running costs could increase by 25 to 50 per cent.
3 . Go green and take advantage of government funding while you’re at it
A 2017 international report by Unilever revealed that 33 per cent of consumers worldwide will choose to buy from brands they believe are doing social or environmental good. This is great news if you’re consciously trying to reduce energy use as a part of your brand’s effort to go green. Just don’t forget to shout about it.
Even better, the Australian Government offers funding and energy schemes which can help existing businesses adopt greener ways of operating. This includes getting access to a team of energy specialists and funding to fast track your business and start saving faster than if you were to go it alone.
4 . Make energy savings everyone’s responsibility
In order for your energy saving plan to work, it needs to involve and matter to everyone on your team.
Aiden Jenkins, co-founder and managing director of Australia-based Infinite Energy says creating a ‘Green Team’, reviewing company policies and incentivising staff for their efforts in cutting down costs can go a long way in meeting your energy-saving objectives.
Having a strong training program in place also helps, but for maximum efficiency, it should be tailored to your staff. Do they prefer videos they can watch? Or checklists around the venue to help tick off what needs to be shut down at the end of the day?
Before you roll out any new ideas or invest in energy-saving technology in your business, make sure your employees:
- know and understand what’s expected of them, they must be briefed on new changes that’ll happen around the restaurant.
- are able to openly communicate their needs to you. It’s become essential for many people to be able to charge their phones while at work for example, consider how much is a reasonable amount of energy to be used for personal consumption at work and discuss this with your staff.
- are quickly and adequately trained to use any new energy-saving technology or devices, else they might not use them.
- understand what’s in it for them, whether it’s through a monetary benefit or another form of recognition for their efforts.
5 . Don’t forget the little stuff
So we’ve talked about some of the bigger things you can do to reduce your energy consumption, but every kilowatt saved counts, so don’t forget to do the little things as well.
Here’s a quick list to help you start:
- Aim to work out a schedule in your restaurant that lets you reduce the idle time your appliances run for. Turn off unused oven sections if you can, and preheat your ovens closer to your opening time. Shutting a combi-oven off or reducing its idle time by one hour can save you about $400 each year.
- Don’t just replace your lighting with LED bulbs, get creative with mood lighting and dimmers to create an ambience for occasions like Valentine’s Day, a win for both your customers and your establishment.
- People tend to leave the lights on in areas such as closets or bathrooms during the hustle and bustle of a service. Use occupancy sensors in these areas to automatically turn the lights off when no one’s there for a while. These can be easily installed and retail for about $30–50.
- Adding a strip curtain to a walk-in fridge can reduce up to 90 per cent of air loss that occurs when doors are opened or left ajar, thereby saving energy.
Australian hospitality businesses are facing a real and serious challenge from rising energy costs, a situation that in all likelihood may not see change for a while. But there are very practical ways you can reduce the long term cost of sustaining your operations.
Just keep in mind that taking steps to cut down on your usage now will mean you can start saving earlier, and do the earth that much more good while you’re at it.
Contact us or read on for more ideas on how you can reduce costs, and run a more efficient hospitality business.