Is your business burdened with high energy bills? Utility costs are a major business expense that often goes overlooked. Fortunately, there are many energy cost saving strategies and practical ways reduce energy costs for Australian businesses. In this post, we take a look at five ways to reduce energy costs in your business. Some of these tips are time sensitive so you will need to act fast.
Energy cost saving strategies
1) Take advantage of Instant tax write-offs to purchase energy efficient equipment to reduce energy costs
You may want to consider taking advantage of generous instant asset write-off provisions by the ATO, to purchase any single asset under $150,000 between 12 March 2020 and 30 June 2020.
Businesses with turnover up to $500 million (previously capped up to $50 million) can purchase assets up to a value of $150,000 and claim them this year until 30 June 2020. So for a limited time, the vast majority of businesses in Australia (including larger companies) can get a considerable and instant tax deduction on assets bought between now and the end of the financial year. Assets purchased prior to 12 March (i.e. 11 April 2019 to 11 March 2020) will qualify for an instant asset tax write-off of $30,000.
To claim for either threshold, you just need to make the purchase and use the asset for your business in the same year that you claim the deduction before 30 June.
What’s more is that businesses can purchase multiple assets under these amounts, they should all qualify – even if the cumulative cost exceeds $150,000/$30,000. The cost of the asset includes both the amount you paid for it and any additional amount spent on transporting the asset, improving it or installing it for use.
So what does this mean and how can you reduce energy costs in your business?
Now is the perfect time to think about upgrading to more energy efficient appliances and equipment – the catch though, is that you will have need to have purchased, installed and used the asset(s) before 30 June 2020. Your business would not only get a nice tax break but also benefit from lower energy costs in your business in the long run.
2) Upgrade to more Energy Efficient Appliances to reduce energy costs in your business
Whitegoods and electrical appliances can consume quite a lot of electricity, particularly in an office/commercial building environment. The federal government requires appliances to be given an energy rating from 1 to 6 stars. Appliances with a six (6) star energy rating is a lot more energy efficient and can help cut down energy bills in the long run. Visit www.energyrating.gov.au for information on how the energy rating labeling scheme works and to compare various models. With the first tip in mind, you can upgrade all appliances and equipment, benefit from reduced energy costs in your business and get a handy tax deduction as well.
3) Upgrade to LED lighting and smart sensors
This is one small step but when done across an entire commercial building the savings are massive. LED lighting is by far the most energy efficient and smart lighting solution for your business. The benefits rage from a reduction on carbon emissions, electricity cost savings and lowering operational temperatures and overall room temperature which in turn reduces the load on air-conditioning systems.
Did you know? LED lights not only consume up to 75% less energy, they can last 50 times longer than older lighting technologies.
Are the lights on all the time in your building, even when no one is there?
More efficient lighting combined with smart sensors and controls can be programmed to turn on/off only when rooms and common areas are occupied, reducing energy costs in your business even further. Talk to a trusted energy services company (ESCO) that specialises in LED lighting upgrades, sensors and controls to develop a solution for your business.
4) Clean and Change the filters on your HVAC equipment regularly
Making sure to have your Heating Ventilation and Air Conditioning systems / units inspected by a licensed professional to perform preventative maintenance and cleaned every three to five years is vital to keep your HVAC system running smoothly and while saving energy cost. Aside from regular inspections, it’s important to have your HVAC system assessed to determine if it’s optimised for energy efficiency.
5) Get an Energy Assessment or Energy Audit done
When was the last time your business had an energy audit done, if at all? As individuals we get health checks done every six to twelve months. And for some businesses, they undergo financial audits every year. But what of energy audits and how can it save your business money? Energy Audits or Assessments are done by trained and accredited professionals that essentially conduct an investigation and analysis of your organisation’s energy load profile, energy consumption trends and identifies areas where energy savings can be achieved through installing or upgrading to more efficient equipment and technologies. The audit will verify where the energy is being used, and wasted, and estimates costs and return on investment of implementing energy efficiency upgrades to reduce energy costs in your business.
Short on cash or capital to invest in these energy cost saving strategies? Take advantage of government grants and programs
There’s millions of dollars in funding from various state and federal government grants and programs available to businesses to implement energy efficiency upgrades, energy monitoring systems and energy audits.
Our FREE Grants Assistance Support Package can help you apply for any grants that your business may be eligible for. Applying for grants takes effort and skill to maximise success. Ecosave has previous success in securing over $1 million in funding for Australian businesses.
Click to find out more and to claim your free support package today