Electricity is one of the biggest factors affecting business costs, particularly when it comes to overall energy expenses. In 1979, electricity may have only represented 38% of energy usage for businesses, but that number rose to 55% in 2003 and continues to increase today. The fact is that electricity is now one of the biggest utility expenses for businesses, making it important to take steps to reduce these costs. This is how an electricity audit can help your business.
Many factors contribute to electricity prices across the U.S. today, considering it takes a lot to produce this resource. If electricity prices increase, so will your utility bills. If you want to gain a deeper understanding of what goes into electricity costs, the following are some of the key factors to keep in mind.
1. The Season
The cost of electricity fluctuates every minute, but the season also plays a huge part in these costs. A majority of consumers pay electricity bills based on electricity’s seasonal cost, which tends to be at its highest during the summer months. One of the main reasons for this is the increased need for sufficient air conditioning to stay cool. With increased demand comes increased production, which leads to more resources consumed and higher costs.
2. The Type of Customer
Both residential and commercial consumers tend to pay more for electricity than industrial customers, which is due to the fact that distributing electricity costs more for the former. The main reason it costs less to supply electricity to industrial customers is that they use this resource at one time at greater voltages, preventing the need for stepping down. As a result, industrial customers tend to pay an amount that’s more in line with wholesale prices.
3. Power Plant Expenses
To produce electricity, power plants are needed. The costs of building, maintaining, and operating power plants all contribute to the costs of electricity for customers. Without these plants located in proximity to facilities, customers of all types would be unable to obtain the power they need as conveniently.
4. The Costs of Transmission and Distribution
In addition to power plants, the systems used to transmit and distribute electricity to customers also require construction, maintenance, and continuous operation to deliver electricity. All of these elements further contribute to the cost of electricity.
5. Fuel Costs
Fuels are needed to generate and distribute electricity using the equipment in power plants. Like the cost of electricity, the price of fuel may vary depending on the market and the type of energy source used, which can then impact electricity prices. Generally, natural gas tends to cost more than coal fuel.
6. Local Regulations
Regulations may contribute to higher or lower costs, depending on the area. Depending on the state, regulated and unregulated prices could impact costs, along with utility and service commissions.
7. Renewable Energy
Sustainable energy solutions are extremely popular among local suppliers in certain deregulated states. Renewable energy could therefore affect the price of electricity depending on the energy source, the amount of energy available to customers, and the amount actually used.
Certain weather conditions could also increase the cost of electricity. However, they could also work to reduce them. Harsh weather conditions, for example, can lead customers to demand a greater amount of electrical power, while mild snow and rain may facilitate more efficient hydropower generation that reduces costs.
9. Minimum Usage Charges
A majority of suppliers have a certain minimum usage level that they’ll charge customers for, which means that they’ll be charged a minimum amount regardless of the amount of energy they use. Factors influencing these charges and the total amount impact the amount that customers need to pay.
In areas with deregulated markets, customers will have more direct influence over electrical costs. The more competitive the market is, the more varied prices will be.
Based on all of the factors unique to each location, geography can greatly impact the overall cost of electricity. Regulations, seasonal weather conditions, fuel and power plant costs, and the costs of distribution all vary from location to location.
If you’re concerned about any of these factors influencing your electricity costs and your business’s usage, you may benefit from an electricity audit. For a reliable electrical audit that can accurately identify any inefficiencies and other issues, contact the experts at Util Auditors.
How an Electricity Audit Can Help Manage Electricity Costs
A thorough electricity audit can help determine if there are any potential discrepancies or opportunities for refunds in your electrical bills. In addition, a periodic electricity audit entails a complete evaluation of your business’s electrical use. This can give you the chance to reduce electrical expenses and benefit from more efficient operations overall.
To help illustrate the potential advantages of an electrical audit, the following are some specific benefits that you can experience.
1. Identify Potential Issues With Equipment and Billing
With the help of an electrical audit, you can find out if there are any problems with your equipment that might negatively impact your electrical systems. For example, an audit may find certain problems with equipment that result in unnecessarily increased usage of electricity that contributes to higher costs. Audits could also uncover certain safety hazards, such as exposed wiring that could cause electrical fires.
Some potential issues that could contribute to wasted electricity and higher costs include:
- Inefficient lighting
- Outdated electrical equipment
- Poor weatherization measures for windows and doors
- Leaving certain equipment on for long periods of time
Additionally, billing errors can contribute to significantly higher electrical costs. Even a single line could be detrimental and cost you much more than you actually owe. An electricity audit can identify these errors and obtain refunds that help further reduce energy expenses.
2. Get Recommendations for More Energy-Efficient Solutions
Professionals can also use an electrical audit to help determine ways to increase overall efficiency. Business owners might otherwise remain unaware of certain solutions that could help reduce energy use and costs without negatively affecting operations. For instance, auditors may discover that your facilities use outdated lighting systems that don’t use energy-efficient LED bulbs. Poor insulation and HVAC systems could also cost your business a substantial amount of money in wasted electricity.
3. Exhibit Sustainability
If your business undergoes an electrical audit along with other energy audits, you’ll be able to prove to customers and employees that your business values sustainable solutions. As you implement more energy-efficient solutions, environmentally conscious staff will be happier working for you. Also, customers will be more inclined to do business with you if you show that you’re sustainable.
4. Create a More Comfortable Work Environment
By uncovering certain inefficiencies that add more to your electrical bill, you can also take steps to develop a more comfortable workplace for you and your staff with more efficient systems. If an electrical audit finds that insufficient insulation is affecting your HVAC systems and consuming more electricity, for example, steps taken to improve these systems could lead to a more comfortable workspace. More comfortable employees are also frequently more productive, which can increase revenue.
5. Maximize the Longevity of Equipment
If you’re working with outdated equipment, an electricity audit could make recommendations for replacements. Newer and more energy-efficient electrical systems and equipment can last longer due to increased operational efficiency. High-performing equipment won’t need to consume as much electricity or work as hard. That makes it less prone to wear and tear and potential breakdowns. This, in turn, leads to even more cost savings.
6. Increased Property Value
With the implementation of newer and more efficient equipment comes increased property values. For example, updated lighting, electrical equipment, HVAC systems, and other solutions could add to the value of the property. This will make the property much more appealing to potential buyers should you decide to sell your facilities at any point.
Get Routine Audits to Control Electricity Costs and Maintain Efficiency
All of these advantages make regular electrical audits important to help optimize your company’s energy efficiency. A professional electrical auditor will be able to figure out what’s costing your business more than it should, whether it’s inefficient equipment and systems or billing errors.
However, to get the best results from your electrical audits, you need to work with experienced experts who can give your business the attention it needs. The right company will be able to perform consistent audits that identify issues before they become even more serious while helping maintain operational efficiency.
At Util Auditors, we offer reliable electrical auditing services that can help determine what’s costing you more than you should have to pay. We offer unparalleled knowledge, technology, and methodology that enable us to conduct a thorough analysis of your services and invoices. Subsequently, we can accurately identify any inefficiencies, anomalies, and errors that might be costing you. Based on our findings, we can advise you on the right solutions. We also provide in-depth reports that you can download throughout the audit process.
With the help of Util Auditors, you’ll be able to benefit from dependable auditing services that facilitate cost savings and growth. Contact us to learn more about our electricity audit services and start your free review.