Restaurant Utilities Cost 2019: You’re Paying Too Much

restaurant plugged into a green energy source

You want to run a successful restaurant and get the financial independence you’ve always dreamed of. Your restaurant’s name will be on everyone’s lips when they’re thinking about where to eat out. The average restaurant utility cost will affect your menu prices and take a bite out of your net profit. Protect your bottom line by reducing the cost of your restaurant utilities. Find out how in our handy guide to restaurant energy bills.


Restaurant Utilities: What Do They Look Like?

The first step to taking control is to understand the different parts of your utility bill. The main items you need to pay attention to are the: Standing Charge, Unit Rate, Contract End Date and Climate Change Levy. If you understand these key terms then you’re already one step ahead.

How much electricity does a restaurant use per month? This depends on the size of your restaurant. Is a micro, small or medium-sized? You’ll need to know this for the average energy bill a restaurant of your type should be paying.


Should I Perform an Energy Audit?

chefs hat mobile phone and cutlery

Restaurant sales per square foot of commercial space in your town is dictated by many factors. Since electricity and gas bills are of most significance, you should perform an energy audit of your restaurant. Gather electricity bills from the last year and track your usage in a spreadsheet. If you see a spike in your energy bills rather than a constant figure, it’s time to switch supplier.


I’m Paying More Than The Average Restaurant. What Do I Do?

By now, you know what a restaurant your size should be paying in gas and electricity every year. If you discover that you’re paying over the odds, before you do anything drastic, compare rates from different energy suppliers. Selectra can run a full comparison for you and find a deal that’s right for your restaurant. Their team of business energy experts will take you through the comparison process.

Flame and light bulb

Don’t Make a Meal Of Your Energy Bills!

Call Selectra for a comparison of energy suppliers best suited to your restaurant.


What Should I Look For In My Restaurant’s Energy Supplier?

There are a number of factors you should consider when comparing suppliers. We’ve listed some of the most important ones that have helped hundreds of restaurants across the UK save money on their bills and increase their profits.

1. Plunge Pricing To Get Paid

smartphone with price plunging message from octopus energy
Source: Octopus Energy

Did you know that whenever more electricity is generated than consumed, energy prices fall? If prices drop below certain levels, energy suppliers are paid to take energy off the grid. The ideal energy supplier for your restaurant should offer you Plunge Pricing that lets you take full advantage of such wholesale price drops.

That way you get paid for the electricity you use. Your ideal supplier will send you SMS alerts whenever prices drop below zero. That way you can take action, quickly.

Over the last 12 months, unit prices dropped below 2p / kWh 31 times and below 0p / kWh 4 times.

2. Price Cap Protection Against Spikes

When there’s an excess of energy used rather than generated, wholesale prices will rise. These price spikes in energy could last up to an hour, but a good electricity supplier should protect you from them. Ask if your new supplier can guarantee a Price Cap that will ensure you don’t pay any more than, say, 35p / kWh for your restaurant’s electricity.

Remember that you need security and stability when managing your business. Removing any unknown variables that impact your costs will help you budget for the more important things, like food supplies.

3. Unlock Cheap Off-Peak Rates

Your new energy supplier should be a pioneer of new technologies which will reduce your final restaurant utility cost. It should offer you a tariff that allows you to connect all your restaurant’s devices to benefit from dynamic energy pricing using your Smart Meter.


Ask Selectra if their suggested supplier allows you to set up rules and triggers. This is crucial to ensure you are using some or all or your appliances when energy prices are at their cheapest. This is otherwise known as “If This, The That” (or IFTT). Below are just some of the IFTT rules and triggers you can set up for your restaurant to lower your bills.

RULE TRIGGER
If... Agile prices drop below 5p/kWh... Then... set my restaurant’s thermostat to come on.
If...the wholesale price of gas drops below my set price... Then...switch from gas cooking to induction cooking.
If... the total energy consumed in my restaurant for the past day/week/month exceeds my set value... Then...set all my restaurant’s device settings on low usage.
  • With IFTT you can:
  • Save 40% on your restaurant’s water heating costs by programming your smart thermostat to heat at the cheapest times of the day.
  • Use smart plugs to run energy-intensive appliances, such as washing machines and dishwashers, at off-peak times, you an average of 25% per year on your washing costs.
  • Set up a visual cue to remind you to switch on appliances when energy prices dip. For example, have a bulb turn green when it's time to put the washing machine on!

4. Control Your Restaurant With Voice

woman talking to amazon alexa device
Source: Mashable.com

What if you could activate and deactivate your restaurant’s appliances with just a verbal command? Your new supplier should give you this option to remain in control of your consumption while you’re busy managing your restaurant. Whether you’re tending to the customers, the stock of food supplies or the cash till, you should stay on top of what appliances are being used and when.

Ask Selectra if their proposed supplier offers you a virtual assistant, such as Amazon Alexa. Harness voice interaction to answer your questions and receive commands while you’re on-the-go.

  • Questions To Ask Your Virtual Assistant
  • When is electricity cheapest today?
  • How much electricity did my restaurant consume yesterday, this week or this month?
  • What consumes most electricity: fryers or grills, induction cookers or gas cookers?
  • Commands To Give To Your Virtual Assistant
  • Turn up the temperature of the freezer by 1 °C and the refrigerator down by 2 °C.
  • Turn the oven off and switch the grill on.
  • Lower the temperature of the deep-fat fryer and increase the temperature of the oven.

7 Golden Tips: Reduce Restaurant Utility Bills

Follow these 7 steps to make your restaurant more energy efficient and drive your utilities down to propel your net turnover upwards.

1. Strategise Your Menu

The cost of ingredients is not the only factor to think about when calculating how much you’ll charge for each menu item. Chat with your head chef and find out what cooking strategies and equipment are used to prepare the dishes on your menu. If they involve using the oven for an extended period, ask Alexa how much energy it costs you to prepare that dish. If another meal involves using the grill or microwave, what cost does Alexa attribute to it?

Include this cost in your calculation and you’ll ensure that you’re charging a fair price that brings you the net profit you want. Go one step further. Together with your head chef, strategize methods for decreasing restaurant utility costs in meal preparation.

2. Ensure Your Fridge Performs At Its Best

Tell your staff to keep fridge doors closed whenever possible and that they check the seals on the fridges are intact. Defrost your fridge at least once every two months. Separate heating equipment from the fridge so that they’re not counteracting each other's energy performance.

Storage Temperature Codes
Temperature code Product temperature Suitable for
L1 Below -15 °C/-18 °C* Ice cream and frozen foods
L2 Below -12 °C/-18 °C* Frozen foods
M0 Between -1 °C & +4 °C Poulty and meat
M1 Between -1 °C & +5 °C Meat and dairy products
M2 Between -1 °C & +7 °C Processed meat and dairy products
H1 Between -1 °C & +10 °C Produce and canned and bottled drinks
H2 Between -1 °C & +10 °C Canned and bottled drinks

*The maximum termperatures shown are those allowed after defrost.

3. Consolidate Deliveries of Inventory

If you’re receiving deliveries of food inventory one day and drinks inventory on another, you’re wasting valuable energy and money. As you restock on each occasion you’ll be leaving the doors of the fridge and cold room open. If you add to this to energy costs while switching on and off the lights to restock, your bills can quickly escalate.

As a solution, instead of receiving your supplies on different days, ask your vendors if they can combine deliveries on the same day. Not only will you kill two birds with one stone, but you'll also be paying less for it.

4. Decrease Heat Usage

Heating can total up to 60% of your restaurant’s energy costs. Simply by reducing the temperature by just 1°C can shave almost 10% off your total energy bill. Your customers won’t even notice the difference! In the kitchen, fit TRVs (thermostatic radiator valves)to improve temperature control. In the bathrooms, install energy-efficient hand dryers that don't use heating elements.

  • BONUS TIPS
  • Optimize your water temperature so you don't use water that's hotter than it needs to be. Mandatory dishwashing temperatures in the foodservice industry are around 60 °C.
  • Get your boiler serviced regularly to make sure it's running as efficiently as possible. A regularly serviced boiler can reduce your annual heating costs by as much as 10%. Find out what a full boiler service includes.

5. Get Bulbs That Last Longer

Lighting typically adds up to around 25% of total restaurant utility costs. If you have any incandescent tungsten bulbs, remember that they only last from 1,000 to 2,000 hours. Constantly replacing them will cost you dearly. Instead, replace them with 60 watts LED bulbs which last from 10,000 to 25,000 hours.

With this simple step, your restaurant can reduce consumption by up to 80%. Good alternatives to LEDs are halogen incandescents and CFLs (compact fluorescent lights). These are worth considering if you feel that they complement your restaurant’s decor better than LEDs.

  • BONUS TIP
  • For areas that are not frequently occupied, such as bathrooms, the stock room or utility room, install occupancy sensors. These will only turn on the lights when someone enters the room and they turn off after a set time has elapsed. This will reduce your restaurant’s energy usage by up to 30%.

6. Switch off appliances that aren’t being used

Beware the “energy vampire devices.” They’re devices that aren’t being used, but which are still sucking energy while on standby mode. You’re wasting money unnecessarily for the energy they’re consuming. See below some of the common energy vampire devices and the wasted energy consumed in your restaurant’s kitchen and reception area:

Restaurant Kitchen Restaurant Reception
  • Microwave (w/clock): 4.9 W
  • Stereo speakers: 5.6 W
  • Furnace: 9.8 W
  • Air Conditioner: 1 W
  • Coffee maker: 2.7 W
  • Gas range: 1.7 W
  • Night light (off): 0.34 W
  • Cable modem: 8.62 W
  • Wireless phone: 4.89 W
  • Answering machine: 7.4 W
  • Cell phone charger: 1 W
  • Computer LCD monitor: 3.5 W
  • Desktop computer (sleeping): 83.3 W
  • Air Conditioner: 1 W
  • BONUS TIP
  • Get yourself and your staff’s voices recognised by Alexa so that each of you can ensure appliances are turned off when not being used. You can save more than 140 W of wasted energy per day, which will bring your bills down considerably.

7. Track Your Restaurant’s Energy Usage

Alexa spot device with message from octopus energy
Source: Octopus Energy

Ask your virtual assistant what your restaurant has consumed and “hack” the energy market’s wholesale prices. When wholesale prices dip, switch your usage to those ideal times while prices are cheap. Regularly track the usage of the biggest energy consumers, namely your fridge or cold room, ovens, grills and cookers.

If you need to replace a poorly-performing device, ensure it carries an energy label that’s clearly visible.

  • An A +++ washing machine can save up to £20 a year compared to a five-year-old model.
  • An A +++ refrigerator can mean a saving of £80 per year for your business.

If you multiply these savings by the length of time that the appliance remains fully functional, the original price you paid for them will be amortized very quickly, so it’s well worth the purchase in the long run!


Summing Up...

By switching to a provider that can put you in control of your restaurant’s energy usage, you’ll reduce your expense and grow your net profit. Going “green” means asking the right questions and getting the data to track your consumption. Make the most of your new supplier’s tools to be more energy efficient every day and you’ll have lots of money to inject into your restaurant business.