Are You Paying Too Much for Your Restaurant Utilities?

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restaurant utility cost

Running a successful restaurant involves planning, outstanding service, and of course, exceptional cuisine. However, amidst the myriad of challenges that restaurateurs face, utility costs continue to be a significant concern.This article delves into the average gas and electricity bills for restaurants in Ireland, shedding light on the factors driving these expenses and providing insights into managing business energy for restaurants.

How To Manage Your Business Energy Costs for Restaurants?

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Whether you're the proud owner of an Italian pizzeria, a traditional Chinese restaurant, or a beloved greasy spoon, one thing remains constant: the substantial impact of gas and electricity bills on your monthly outgoings.

As a restaurant owner, the energy consumed for lighting, heating, and cooking constitutes a significant portion of your operational costs.Since there are no ready-made solutions available for business energy, each contract is customized to suit the specific needs of your restaurant. As a result, rates can differ between different businesses.

When determining your rates, business energy suppliers typically take into account factors such as your business type (sole trader, partnership, or limited company) and the industry in which you operate.

Wholesale Costs and Fixed-Rate Contracts The price you pay for energy in your restaurant is influenced by wholesale costs, which can fluctuate based on market conditions. Opting for a fixed-rate contract ensures a consistent unit rate throughout your agreement, providing stability in the face of rising energy prices.

The Components of Your Restaurant Utility Bill
electricity bill with money

It is crucial to have a clear understanding of your energy expenses and the underlying factors influencing them. This knowledge enables you to determine if switching energy suppliers or altering your gas and electricity usage can lead to cost savings.

By comprehending your restaurant's energy bill, you gain insight into your energy consumption and associated costs. If you have a smart meter, it can provide valuable information on the timing and locations of energy usage, helping you identify opportunities to reduce consumption.

When analyzing your utility bill, it's essential to consider the following components:

  1. Standing Charge

    This is a fixed daily fee that you are charged for electricity and business gas supply to your restaurant. It covers the cost of maintaining the energy infrastructure and ensuring it is available for your use.

  2. Unit Rate

    The unit rate is the price your energy provider charges you for each unit of energy you consume, typically measured in kilowatt-hours (kWh). It is essential to monitor your energy usage to manage this cost effectively.

  3. VAT

    Value Added Tax (VAT) is a mandatory tax levied on most goods and services, including energy consumption. The standard VAT rate in Ireland is usually set at 9%.

  4. Operating costs

    This charge covers the costs of running your account.

  • Average Business Electricity Rate For a Restaurant
  • Unit rate (per kWh):14.87c
  • Standing charge (daily):25.46c
  • Approximate Cost per year:€3,067

What Are the Factors Affecting Business Energy Costs in Ireland?

The cost of business energy for restaurants varies based on several factors:

  • Location

    The region where your restaurant is situated can impact energy prices due to variances in supply and distribution costs.

  • Restaurant Size

    The size of your establishment influences your energy consumption. Larger restaurants typically require more energy to power their operations, resulting in higher bills.

  • Energy Supplier

    Different energy suppliers offer varying tariffs and pricing structures. It's beneficial to compare business electricity rates and choose a supplier that suits your restaurant's needs.

  • Energy Usage

    The most crucial factor affecting your energy costs is the amount of energy your restaurant consumes. The more energy-intensive your operations are, the higher your bills will be.

Understanding the average energy usage for various restaurant sizes can provide valuable insights into managing utility costs. The table below outlines the average energy consumption for different types of restaurants in Ireland.

Restaurant Business Sizes and Consumption
Type of Restaurant Average Annual Electricity Usage Average Electricity Cost Per Year Average Annual Gas Usage Average Gas Cost Per Year
Small business 15,000 and 25,000 kWh €2,367 – €3,660 15,000 to 30,000 kWh €820 – €1,458
Medium business 30,000 kWh and 50,000 kWh €3,774 – €7,234 30,000 to 65,000 kWh €1,458 – €2,239
Large Business more than 50,000 kWh €16,202 (based on annual usage of 55,000 kWh) more than 65,000 kWh €5,967 (based on annual usage of 65,000 kWh)

Which Are the Biggest Energy Consumers in Restaurants?

Running a restaurant involves a multitude of energy-consuming activities, but certain aspects of your operations tend to be the biggest contributors to your energy usage. Understanding these energy-intensive culprits can help you identify areas where you can focus your efforts on optimizing energy efficiency. Here are the top contenders for the most energy-consuming elements in a restaurant:

  1. Commercial Kitchen Equipment

    The heart of any restaurant, the kitchen, is typically the most energy-intensive area. Commercial-grade ovens, grills, fryers, and ranges consume significant amounts of energy, especially during peak operating hours.

  2. Refrigeration and Cooling Systems

    Refrigerators, freezers, walk-in coolers, and ice machines are crucial for food storage and preservation. However, they consume substantial energy to maintain optimal temperature levels, especially in busy establishments where frequent door openings occur.

  3. Lighting

    Restaurants require ample lighting to create a warm and inviting atmosphere. However, inefficient lighting systems or leaving unnecessary lights on can lead to substantial energy waste. Consider switching to energy-efficient lighting options, such as LED bulbs, to reduce energy consumption.

  4. Heating, Ventilation, and Air Conditioning (HVAC)

    Keeping your restaurant comfortable for customers and staff requires effective HVAC systems. However, heating and cooling equipment, as well as ventilation fans, can be energy-intensive, particularly in extreme weather conditions.

  5. Water Heating

    Restaurants heavily rely on hot water for cooking, dishwashing, and sanitation purposes. High-volume water heaters can consume significant energy, so optimizing water heating efficiency and implementing water-saving practices are essential.

  6. Computers and Electronics

    Point-of-sale (POS) systems, office computers, and other electronic devices contribute to energy consumption in restaurant operations. Ensuring efficient power management settings and turning off devices when not in use can help reduce energy waste.

These energy-intensive elements are often necessary for smooth restaurant operations, but there are ways to mitigate their energy consumption. Implementing energy-saving equipment, proper maintenance routines, staff training on energy-saving practices, and adopting smart energy management systems can significantly reduce energy usage and lower utility costs.

By identifying the key energy consumers in your restaurant and taking proactive measures to optimize efficiency, you can make significant strides towards reducing your environmental carbon footprint and achieving long-term cost savings.

Night-time economy The fee for obtaining a Special Exemption Order, allowing bars and nightclubs to extend their opening hours, will be reduced from €110 to €55.

How Much Energy Is Used In a Restaurant?

To provide you with an understanding of the factors that can significantly affect your business energy bills, let's delve into the typical electricity and gas consumption patterns of an average restaurant.

Here's a breakdown of how an average restaurant uses electricity:

Reason for use % of total usage
Refrigeration 43%
Cooking 14%
Miscellaneous 14%
Ventilation 12%
Cooling 11%
Lighting 6%

Below-mentioned is the breakdown of how an average restaurant uses gas:

Reason for use % of total usage
Cooking 67%
Water heating 18%
Heating 15%

How To Reduce Your Business Energy Usage?

By effectively managing and enhancing the energy efficiency of your business operations, you can decrease overall energy consumption. Various approaches can be implemented, including:

  1. Conducting an energy audit
  2. Utilizing energy-efficient lighting
  3. Employing energy-efficient computers
  4. Promoting environmentally-friendly practices among your staff
  5. Installing energy generation technology

While the impact of energy efficiency measures may vary based on your specific business type and the actions you undertake, even implementing small changes can have a significant positive effect.

How To Improve Restaurant Energy Efficiency and Reduce Energy Bills?
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If you're looking to enhance the energy efficiency of your restaurant while reducing energy costs, implementing effective strategies is key. By taking proactive measures and making smart choices, you can optimize energy usage, lower utility bills, and contribute to a more sustainable and environmentally friendly operation.

Ensuring optimal energy efficiency in both your kitchen and dining area is crucial. To achieve this goal, here are the recommended steps to follow:

  1. Upgrade to energy-efficient equipment

    Replace outdated appliances, such as refrigerators, ovens, and dishwashers, with energy-efficient models that bear the EU energy label.

  2. Optimize Lighting

    Switch to energy-efficient LED lighting throughout your restaurant. Install motion sensors or timers to ensure lights are only active when needed.

  3. Control HVAC Systems

    Regularly maintain and service heating, ventilation, and air conditioning (HVAC) systems to ensure they operate efficiently. Use programmable thermostats to regulate temperature settings based on occupancy and operational hours.

  4. Efficient Water Usage

    Implement water-saving measures, such as installing low-flow faucets, aerators, and water-efficient dishwashers. Train staff to minimize water wastage during cleaning processes.

  5. Smart Scheduling

    Adjust operating hours to align with peak customer traffic and reduce energy consumption during low-demand periods. Consider utilizing natural light during daytime hours.

  6. Proper Insulation

    Insulate doors, windows, walls, and ceilings to prevent heat loss during winter and minimize heat gain in summer, improving overall energy efficiency.

  7. Staff Training and Awareness

    Educate and involve staff members in energy-saving practices, such as turning off equipment when not in use, reducing standby power, and adopting energy-conscious behaviors.

  8. Energy Monitoring and Management

    Install smart meters and energy monitoring systems to track energy usage patterns and identify areas for improvement. Implement an energy management system to analyze data and make informed decisions.

  9. Renewable energy options

    Explore business renewable energy sources like solar panels or wind turbines to generate on-site electricity and reduce reliance on traditional energy sources.

  10. Energy audits and incentives

    Conduct regular energy audits to identify energy-saving opportunities and apply for available grants or incentives offered by government or utility providers to support energy efficiency initiatives.

What Financial Support Is Invested In Expensive Energy Infrastructure?

There are various measures available to support investments in costly energy infrastructure.

Grants

SEAI grants offers several business grants in Ireland that have assisted organizations in achieving substantial savings. These grants encompass the Energy Efficiency Obligation scheme (EEOS) and the Accelerated Capital Allowance (ACA).

Pay As You Save

Suppliers now provide a "pay as you save" model, offering lighting and energy services where they cover the upfront installation costs of lighting, heating, and microgeneration. Businesses then make payments based on their usage of the services.

Green Loans

Banks and investors offer low-interest "green loans" to support sustainable energy projects.

How Can I Save Money By Switching Energy Suppliers?

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Despite the current high energy prices and energy market volatility, businesses can still achieve savings by switching their energy providers. At Selectra, we collaborate with a reliable network of suppliers to secure competitive rates for your business.

Contact our tech-enabled experts at (01) 913 1771 (Mon - Thurs: 8:30 am - 6 pm and Fri: 9 am - 5:30 pm) for business energy support and to explore the potential savings you can obtain.

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