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Published On: Tue, Feb 3rd, 2015

When Business and Government Collide: Taming Your Energy Bills and Tariffs

For those that are unaware, the Climate Change Levy is a tax that businesses pay on the conventional energy that they use. Renewable energy does not attract the tax. The government hopes that with the tax making energy use more expensive, businesses will work harder to become more energy efficient. When businesses trim their energy use, the resultant lowering in carbon emissions could help the environment.

The way CCL is charged

The government imposes the CCL on most business gas and electricity use as an add-on surcharge on every unit consumed. Different rates apply on these fuels.

An electric danger sign may mean "costs ahead" photo/public domain

An electric danger sign may mean “costs ahead”
photo/public domain

Business electricity: Not all business electricity use attracts the CCL. The levy only applies to usage exceeding 33 kWh’s each day (the average daily usage rate for businesses in Britain). Past this point, usage attracts an additional 0.554p for each kilowatt hour used.

Business gas: The average UK business uses 145 kWh’s of gas each day. Businesses that consume more pay the CCL at 0.193p for each additional kWh.

A few businesses are exempt

The law exempts several industries and areas of activity from the need to pay CCL on their energy use. Most educational institutions, for instance, are exempt. So are non-profit organizations, holiday accommodations, community heating systems and hospices. Some passenger transportation businesses such as ferry operators are exempt, as well.

photo Ulfbastel

photo Ulfbastel

Metering, Monitoring and Targeting (MM&T)

While using energy comparison services (such as http://www.ukpower.co.uk/business-gas) can help lower energy bills for businesses, it’s important to not lose sight of the fact that the main aim of the energy CCL is to encourage businesses to trim energy waste and become more efficient.

Energy efficiency comes about through analyzing usage patterns, and identifying areas of potential improvement. The government recommends a system to make this possible — the Metering, Monitoring and Targeting system or MM&T. It involves identifying areas that could potentially be wasteful, organizing surveys to identify specific inefficiencies, and then improving performance by effecting change. The Carbon Trust website has detailed guidance on the processes that need to be followed.

Energy efficiency takes deep change

It takes thorough planning to effect a corporate social responsibility plan for energy efficiency. To begin, businesses need an energy policy that informs every decision made throughout the company. People need to be placed in charge of bringing energy efficiency changes, and the accounting and investment departments need to be informed of the need to invest for better efficiency. Employees will need to be trained in the principles of efficient energy use as well.

Guest Author :

Gabriel Myers is a small business consultant. She enjoys finding innovative ways business owners can save money and sharing her insights online.

photo Stefan Krause, Germany

photo Stefan Krause, Germany

 

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