How Can Businesses Shield Themselves From High Energy Bills?

Energy prices have always been subject to fluctuations caused by geopolitical events, but the past few years have been particularly volatile.

Between 2013 and 2020, gas and electricity bills were relatively stable, but the landscape changed dramatically in March 2021 when the Suez Canal was blocked for six days by the container ship, Ever Given. This incident delayed oil and gas shipments, causing prices to rise as markets scrambled to compensate for the supply gap. The volatility escalated in 2022 with the onset of the war in Ukraine, which injected further uncertainty into global energy markets. The conflict severely disrupted the supply of natural gas and oil from the region, particularly as economic sanctions were levied against Russia. This disruption forced countries to seek alternative energy sources, driving global energy prices significantly higher. Compounding these issues, ongoing Houthi attacks on shipping and oil facilities have intermittently disrupted supplies, exacerbating the volatility of energy costs and adding to the market’s unpredictability.

To protect consumers from astronomical prices, the UK’s energy regulator Ofgem operates an energy price cap that limits how much households have to pay for gas and electricity. However, this protection does not extend to businesses, leaving them vulnerable to the full impact of a volatile energy market. As a result, companies faced rising operational costs, which not only ate into their profits but also forced many to pass these increased expenses onto consumers in the form of higher prices for goods and services.

How Can Businesses Shield Themselves From High Energy Bills?

Whilst events on the world stage may be beyond your control, as a business owner or facilities manager there is one highly effective solution available to shield your company from high energy bills: Solar power.

Commercial Solar Power Provides Protection

Solar energy offers robust protection against price volatility by enhancing energy independence and security. This shields businesses from the unpredictable fluctuations of global energy markets, thereby stabilising operational costs and making future expenditure more predictable.

Once a commercial solar energy system is installed, the ongoing costs associated with generating electricity are minimal and remain consistent, unaffected by geopolitical tensions or market fluctuations that typically impact fossil fuel prices. Most systems are designed to last for over 20 years and only require occasional maintenance, ensuring that companies can enjoy stable and low-cost energy for decades.

Enhanced Energy Independence

By generating their own power and pairing solar panels with a commercial battery storage solution, businesses can significantly reduce their reliance on external energy suppliers and the national grid. This autonomy not only ensures a more stable and reliable energy supply but also fortifies companies against energy shortages and crises, which often lead to skyrocketing prices. Such self-sufficiency allows businesses to maintain smooth operations during times when external supplies may be overly expensive, providing a crucial competitive edge.

Reduction in Energy Costs

Solar power provides businesses with a direct way to reduce their electricity bills. After the initial investment in solar technology, the ongoing costs of generating electricity are quite low, primarily involving maintenance and occasional component replacements. These costs are minimal compared to traditional energy expenses, representing substantial savings, especially for companies with large premises or extensive energy needs. Over time, the reduction in electricity bills can fully offset the initial cost of installation, making solar energy a financially sound investment in the long term.

Competitive Edge

Companies that integrate solar panels often secure a competitive edge by significantly reducing their operational costs. Lower energy expenses lead to substantial cost savings, which businesses can use to fortify their market position against economic fluctuations or to offer more competitive pricing to consumers. This strategic pricing advantage not only makes products and services more appealing but also aligns with growing consumer preference for sustainability, enhancing customer loyalty and potentially boosting sales. By showcasing a commitment to renewable energy, companies not only cut costs but also attract environmentally conscious consumers, further solidifying their market presence.