Taking control of your energy costs - can smart meters reduce your bills?

Are you worried about your energy costs as a small business? This episode looks at the pressing issue of rising energy costs and explores whether smart meters can help you reduce your bills, as well as offering practical tips and guidance for you to reduce those costs in other ways.
Guest: Fflur Lawton, Head of Policy and Public Affairs, Smart Energy GB

Transcript

Sponsor's message: 0:00

This podcast is brought to you in association with Smart Energy GB. Save time, make your business more efficient and take control of your business's energy spend by upgrading to a smart meter. Contact your energy supplier or find out more at www.smartenergygb.org.

Jon Watkins: 0:17

Welcome to this latest edition of the FSB podcast, the go-to podcast for news, tips and important information for small businesses and self employed. This episode will look at the current pressing issue for small businesses of rising energy costs. And we'll explore whether smart meters can help you reduce your energy costs, as well as offering some other practical tips and guidance for you to reduce those costs in other ways. To discuss this topic, I'm pleased to say I'm joined by Fflur Lawton, Head of Policy and Public Affairs at Smart Energy GB, who are supporting the smart meter rollout and Fflur will talk us through the topic, as well as providing some practical guidance for small businesses on wider energy issues. Fflur thank you for joining us.

Fflur Lawton: 1:16

Thank you for having me.

Jon Watkins: 1:17

It's good to have you here. Let's start just by explaining exactly what smart meters are, shall we? Because a lot of people have heard about them, but probably don't quite understand exactly what they are.

Fflur Lawton: 1:29

Yeah, absolutely. So put really simply, smart meters are digital versions of our traditional gas and electricity meters. They're being installed in homes and businesses across Great Britain as part of a massive infrastructure upgrade to our energy system. And that digital bit is really important, because as the smart meters measure your energy, and they do that in near real time, they also automatically send that information, your meter readings, direct to your energy supplier that's done intervals agreed with you. And it's sent via a secure national communications network that has been developed specifically for smart meter rollout. That data is the really critical bit, that's really important information that's being sent. And what that means is that information being sent to your energy supplier, it means that you get an accurate bill. So it's an end to estimated bills, and it's an end to you having to, you know, go and find your meter and do your meter readings and things like that. So that information goes automatically, as well as that smart meters give you access to data on your energy use, and make it visible in a way that we've we've never had before. We know it's really difficult for people to understand actually how much energy they're using and how much that's costing them. And smart meters and that data, give you a visibility, help make you more aware help you to understand how much energy you're using, when you're using it, where you're using it. And that means that you can then make decisions and small changes that can help you become more energy efficient, can help you reduce your energy spend and potentially save money on your energy bills as well. So it's really important as a consumer, I think, to have that visibility as have that understanding of energy.

Jon Watkins: 3:26

And can all businesses get a smart meter?

Fflur Lawton: 3:29

Many businesses can, it does depend sort of on the size of your business, how much energy you use where you're based, the best thing to do is to speak to your energy supplier or your broker about that and make sure that you're eligible and that everything's okay to go. But yeah, the majority of businesses can get them.

Jon Watkins: 3:45

And how does that work? If, for example, you rent your premises. So you know, you're using a building that isn't yours, you're able to bring a smart meter in are you? How does that work?

Fflur Lawton: 3:56

So if you rent your premises, but your name is on the energy bill, then you can ask your supplier to instal a smart metre, or they may contact you directly as well to offer one. What I would say is if you are renting, I would check with your landlord that any changes to your meter are allowed within your rental contract. Again, it does depend on on your contract there. But most landlords are quite happy with that, you know, as long as they understand sort of what you're doing and why you're doing it. There is plenty of information on the smartenergygb website about this. We've even got a template letter that you can send to your landlord as well, that explains what and why and what will happen. On the flip side if your landlord is the one named on the energy bill then they are the ones who would need to request and it's worth having a chat with them to see whether they'd be willing to put smart meters in your building.

Jon Watkins: 4:49

Okay, you touched on this a little bit in your sort of intro piece, but how exactly can smart meters help small businesses take control of their energy use?

Fflur Lawton: 5:01

So it is about that increasing awareness, increasing understanding of how much energy your business is using, you know, it helps you to be a bit more in control of what your costs are, you know, knowing what your costs are going to be as well. So I think that's really important. And understanding that and understanding how you're using stuff can help you to make your business more efficient. So we had a hairdressers local to me, I'm in South Wales, local to me in Cardiff. And they found it really useful to have their smart meter to have that data alongside it to actually understand what they were using. So they found that a lot of their appliances were left on and things like the water boiler, things like that, all of that is adding up, adding costs, particularly right now that we don't need to pay for. So if you can use it to actually identify where you're potentially wasting energy or there is stuff that you can tweak to really help your business, then that's really important right now.

Jon Watkins: 5:59

So they can help businesses save money on their energy costs can they?

Fflur Lawton: 6:04

I mean, it's not a silver bullet, and energy costs are really high, they are likely to stay high for a while, what smart meters can do is support you, you know, as business owners to better understand your energy use, and to make changes where it's possible for you, all businesses are different, we know that. But if you can look at actually how you're using energy and other ways that you could save on that, then that's brilliant. If you get a smart meter and you don't make any changes, then your bill will remain the same. You know, it's not going to do any harm, what you do get, in addition, are accurate bills, and an end to having to send those meter readings to your energy supplier.

Jon Watkins: 6:46

Okay, and does that, you know, actually made a difference to businesses energy use, you've talked a bit about the sort of theory behind this, but are there statistics or insights that tell us just what an impact they might or might

Fflur Lawton: 7:00

So yeah, we've done quite a lot of research not have? around this and asking people sort of, have they changed their behaviours? What, you know, what difference does that make, and our research is showing us that businesses with smart meters, are more likely to actively manage their energy use, and are more likely to have used the information that they're getting from their smart meter in the last six months to actually make changes around their business as well. So whether that's things like reviewing working habits, you know, to reduce the need for energy, or changing lighting, and things like that to be more energy efficient. And other studies we've done as well, showing that sort of over three quarters of small businesses with a smart meter say they're now more conscious about their business energy use, which has led to an estimated monthly saving of about £32, which over a year, you know, is a sizable sum. So there are other possibilities there. As I say the research is showing that people like this information, that they want to be able to use this and it is actually making a difference in what they're doing.

Jon Watkins: 8:01

Okay and are there other other benefits to smart meter use for small businesses, you know, beyond accurate and automated meter reasons, and those those sort of potential cost savings.

Fflur Lawton: 8:10

I mean, from a sustainability point of view, you know, we hear about net zero a lot, we know that we need to be more conscious in terms of how we're using our energy and what we do, and the smart meter rollout, and the sort of flexible energy system that it's supporting our, you know, really important tools in our journey to getting to net zero and sort of research by Delta-ee, an energy consultancy, have shown that without smart meters, meeting our net zero target will be more expensive, it'd be slower, and less well coordinated. Basically, it's the data from smart meters as I keep saying that information is is really important. It shows networks and energy suppliers, you know, when and where we're using our energy, it helps us to better manage peaks and troughs in that energy system, which means that we can look at sort of how we improve balancing supply and demand. And it means that we can integrate more renewable sources of energy into that system. So you know, things like solar, wind energy, which are all quite intermittent, so they're more difficult to control than your traditional fossil fuels. But the data from smart meters really helps us, helps the energy system to do that, and to be able to integrate them. So it means that, you know, we get more local, homegrown, renewable energy into the system. And that, you know, helps us get towards net zero and helps us improve our energy security as well in the long term which I think it's really important right now.

Jon Watkins: 9:41

Yeah, and climate change is a global issue right? But, you know, small businesses can make a difference, right?

Fflur Lawton: 9:48

I mean, absolutely, you know, small businesses, they are the backbone of the UK economy. You know, we know that they represent over sort of 99% I think of all businesses in the UK. So if every small business made a small change, the combined impact of that is absolutely huge and smart meters are a small, they're a simple step for businesses to make in doing this, so it's something that all businesses can do to help them sort of contribute to this journey too.

Jon Watkins: 10:17

Yeah, and I want to broaden this out into some some wider tips and guidance for small businesses, in terms of managing energy use, and particularly in the period we're fast approaching, but just before we do where can businesses is going to find out more about smart meters

Fflur Lawton: 10:34

So if you go to our website at specifically. SmartEnergygb.org, you'll find there is a small business hub on our website, as well. It contains all the information that you need around smart meters for businesses.

Jon Watkins: 10:47

That's great. And look, you know you're here to not just talk about smart meters, but also some of the wider guidance and tactics that small businesses can use this winter, as we're heading into the cold snap and rising energy costs are ongoing. What's your advice for small businesses as

Fflur Lawton: 11:05

I mean, it's it is a really difficult time, we know we approach winter? that we've done again, some research on this. And we found that 92% of small business owners are really concerned about how they'll manage the rising cost of living for the rest of 2022. Loans are looking towards next year as well. And I think that's, you know, that that is a real challenge. It is a real worry for people right now, I don't think there's an easy answer. I think a lot depends on the type of business you have, you know, how much energy do you need to run your business? You know, what are the different things that you can do to really help that business. But there are a range of things that you can do, you know, ranging from small sort of inexpensive things to, you know, greater investments as well, that can help with costs. I mean, for me, one of the key things is understanding your energy use, you know, you can't start to save on your energy spend, unless you know how and Yeah, some really good practical tips and guidance for small where you're using it. Smart metres can help with that, obviously, but you could also get an energy audit done, you could be, you know, go a bit more detailed, and actually have a look at what your business is using, when's it using? What are you wasting? And how can you how can you change that? And they're often there are sort of services provided either sometimes free of charge through energy suppliers, but also through local authorities as well, there are different services, they are available for business. I think one of the we've been out and asked businesses actually, what do they do as well, and one of the, one of the areas that people often come back on is around lighting. And, you know, looking at sort of what sort of lighting you're using in your business, how you're using it. And you know, lighting can be a big expense for businesses, up to about 40% of their energies could actually go on on lighting. So lots of businesses have already switched to LEDs, which is great. But if you haven't, it's really worth, you know, considering that investment, because they use about 75% less energy than the sort of old incandescent bulbs, which is great in itself. But even when you've got LED lights, then switching those off, you know, thinking about actually, when you're using them as simple things as the kinds of things. You know, we all get shouted out, or I shout at various children or whatever, to make sure that they remember to do that it's a very visible thing that that we can all do as well. And that that sort of turning things off, and that getting, you know, turning things off standby, we've heard a lot about it. But I know a lot of people still don't do it. You know, almost all electrical appliances still use energy when they're in standby mode. So if you can turn off things like printers, your monitors your laptops, things like that, you know, you're saying it's only small amounts of money, but it does accumulate. And the more you can do a little things like that, I think is really important. I suppose the last one, and this differs between summer and winter, is climate control as well within your business. So, you know, in the summer, if you're keeping your aircon on all day, it can really add up in your energy bill. And then in the winter, having having the temperature just one degree more than you need can increase your energy spend by about 8%. So all of these things, thinking about actually how you're using your energy, how you how you are keeping warm, absolutely, we all need to do that. But other ways that you can look at different things, whether it's as simple as shutting the doors, getting rid of the draft, things like that, that keep us warm without having to crank the heating up. They all come in useful. So there are I think there are there's lots and lots of information out there. You know, from different organisations that can help with things like this as well. And I think talking to peers and other business owners, I think is you know, sharing that best practice and ideas is a really good move as well. businesses on how to manage their energy use a little bit better. A lot of a lot of them will still be worried Fflur about their energy bills. Do you have further sort of tips and guidance on what they can do if they're if they're still worried about those? Yes, I think there are simple things that you can do, and to make sure that you do them quite quickly as well. So you know, if you get a bill from energy supplier that you're really worried about, and that you don't know whether you can afford it, don't ignore it, you know, your energy supply could be disconnected within sort of 30 days, if you don't make arrangements to deal with that debt. So it's really important to act quickly. Your energy supplier is worth speaking to them, as you know, they may be able to offer you some support or look at different repayment plans, as well, you know, try and think about your budget before you make that call. Because I think it's really important that you're comfortable in knowing sort of what you can afford to pay for, for a small sort of micro business that's sort of 10 or under 10 of employees a render, you can only be billed for energy that you've used in the last 12 months. So you know, if you're being back-billed for longer than that, you need to speak to your supplier again and say, Well, hang on, I'm a small business, you know, I should only be billed for for that year, for the 12 months of energy. I mean, can either, you know, sending in regular meter readings, so you are keeping up with that I think that's really important or getting yourself a smart meter that does that automatically for you as well is really important. So again, that you're getting accurate bills, and that you're not sort of running into debt that way. There is Citizens Advice have a consumer helpline, you know, they can really help you understand your bill and your tariffs as well and give you sort of unbiased information about what what your rights are as well. Or the results of the business deadline. They've got an online web chat and phone line as well, again, is independent advice that you can get from them. So I think the key message is, you know, try and deal with this quickly, don't don't sit on it. It's not worth it to have those have those discussions as early as you can flow that.

Jon Watkins: 16:53

That's really brilliant. Thank you so much for for walking us through that really topical issue of energy bills and how smart meters can help small businesses. I think that will help a lot of our small business owners and members as they look to manage their energy costs not just throughout the winter, but in the longer term. I'd also like to thank our audience for listening to this episode, and to remind you that you can subscribe to the FSB podcasts to receive regular updates and guidance on the big issues affecting small businesses. And do please also remember that you can find a whole host of additional webinars, podcasts and other content at the First Voice website at firstvoice.fsb.org.uk and on the FSB website fsb.org.uk. Many thanks indeed.

Sponsor's message: 17:44

This podcast is brought to you in association with Smart Energy GB. Save time, make your business more efficient and take control of your business's energy spend by upgrading to a smart meter. Contact your energy supplier or find out more at www.smartenergygb.org