Everyone loves a warm, cosy pub, so it comes as no surprise that utility costs are one if the biggest outlays in the sector.
The current energy market could mean these costs force thousands of UK pubs to close their doors prior to the introduction of the Business Energy Relief Scheme. The Morning Advisor conducted a survey which found seven in ten pubs say they may be forced to close if there is no government intervention.
Despite this, there is still confusion over issues surrounding energy for pubs. Who is responsible to managing the energy – brewery or landlord? Are there specific tariffs available for pubs? What should you do if your pub has a low credit rating?
In this piece we’ll answer them all whilst offering advice on your energy strategy and identifying areas where you can reduce consumption.
Is there any regulation I should be aware of?
Minimum Energy Efficiency Standards (MEES) came into force in 2018, meaning that landlords can no longer let a property if their energy performance rating is an ‘F’ or a ‘G’. The aim of the regulation is to improve energy efficiency standards.
If you aren’t sure whether your pub is up to date with all the relevant regulations, feel free to contact one of our consultants.
Is the cost of improving energy efficiency worth the investment?
Although there can often be an outlay involved when installing energy efficiency measures, the long-term return of investment far outweighs the initial cost, especially in the current market. With energy prices rising significantly worldwide, of of the only ways we can control energy expenditure is by reducing overall consumption.
It is important to understand how and when energy is being used in the pub, in order to identify measures to improve efficiency. If you don’t already, we would highly recommend installing monitoring and targeting software to gain visibility into the pub’s consumption.
Energy wastage is an issue for many pubs. For example, identifying spikes in energy use outside of opening hours, indicates issues in your current setup. Once identified you can put measures in place to rectify the problem and ensure the pub is operating at maximum efficiency going forward.
The pub is only small, will any efficiency changes make a difference?
Of course they will! Regardless of the size of your pub, a reduction in energy usage will make an impact. Through improvements to things such as lighting, insulation and heating systems, you will see a noticeable difference to your bottom line.
Not only would you achieve cost savings as a result of improving energy efficiency, but you would also be contributing towards improving your environmental impact.
We have a low credit rating, does this matter?
Because of the industry you operate in, you are already on the back pedal with regards to your credit rating. Some industries are considered to carry more of a financial risk than others, with pubs falling under that criteria.
Energy suppliers must determine whether you are going to be a reliable customer and pay your bills on time. If not, proceedings involving recovery of money owed could occur, costing the supplier time and resource.
Therefore, if the pub is found to have a poor credit rating, options with regards to suppliers and contracts can be limited.
What type of contract is best for a pub with low credit?
If you are having issues with credit, there are low-credit specific tariffs offered by some suppliers whilst others will offer you a regular contract with additional criteria involved.
Often if you fall within the low-credit category, you will be charged a premium by your supplier. Sometimes, you’ll be asked to pay a deposit before they agree to supply your energy, and with low credit, you must agree to pay by direct debit. This is deemed to be necessary to cover the level of risk you carry.
If you intend on making changes to improve your credit rating in the short term, it’s important that you do not commit to a long-term contract while your rating is considered low. The maximum term you should agree to should be one year. That way, you can take steps to improving your rating and look to procure a more cost-effective contract.
If you have concerns or questions about your business energy, get in touch today.