Practical Ways to Make Energy Savings for Care Homes
For care homes, managing operating costs is a constant challenge. With 24/7 operations and the critical need to maintain a warm, comfortable environment for residents, energy bills often become one of the largest overheads after staffing. High energy consumption from constant heating, laundry, and medical equipment can place significant pressure on your budget.
However, high energy use doesn’t have to mean high energy costs. Strategic energy management can lead to substantial savings, freeing up funds that can be reinvested into resident care and facility improvements. At Business Utility Hub, we specialise in helping care providers navigate the complex energy market to reduce energy costs effectively.
This guide provides practical, actionable points on making energy savings for care homes, focused on smart procurement and efficient management - the fastest ways to make a tangible impact on your bottom line.
Secure the best contract by comparing energy suppliers
One of the most effective energy saving tips for reducing your energy bills is to ensure you’re on the right business energy contract. If you let your contract expire without arranging a new one, your supplier will place you on "out-of-contract" or "deemed" rates. These default tariffs can be up to 70% more expensive than a negotiated contract, leading to a sudden and significant increase in your energy costs.
Reviewing your energy contract well before it ends is crucial. We recommend starting the process 6 to 12 months before your renewal date. This gives you ample time to analyse your energy usage, compare quotes from multiple energy suppliers, and lock in the best rates at a favourable time.
As specialists in the care sector, we monitor the market daily. Our team analyses your consumption patterns to find the most suitable and cost-effective energy tariffs for your specific needs, ensuring you avoid expensive default rates and secure budget certainty for the future.
Are you paying the correct tax on your energy bills?
A significant cost-saving opportunity that many care homes miss relates to tax. Most businesses in the UK pay a standard 20% VAT rate on their energy bills, but due to your residential function, your care facility likely qualifies for a reduction.
- Reduced VAT rate: if at least 60% of your energy is used for residential purposes, you are eligible for a reduced VAT rate of just 5% on your entire business electricity and gas bills.
- Climate Change Levy (CCL) exemption: qualifying for the 5% VAT rate also means you are exempt from the Climate Change Levy (CCL), an additional environmental tax applied to every unit of energy you use.
If you’re currently paying 20% VAT, you are overpaying. The good news is that you can claim back these overpayments for the past four years, often resulting in a substantial rebate. Our team can manage this process for you, handling the paperwork and liaising with energy companies to ensure you benefit from these energy savings.
Understand your energy consumption
To secure the best energy contract, you need to understand how and when your care home uses energy. Most care homes have smart meters that provide half-hourly consumption data. This information is invaluable when negotiating with energy suppliers, as it allows them to provide a much more accurate and competitive quote.
Without this data, suppliers have to estimate your usage patterns, which often leads to higher prices to cover their risk. By providing a detailed breakdown of your energy consumption, you demonstrate that you are a predictable customer, which helps you secure better prices.
An energy assessment can highlight areas of energy waste and identify patterns. For example, you might discover that heating in communal areas is running at full power overnight or that laundry equipment is operating inefficiently. Understanding how your care home uses energy is the first step toward being able to significantly reduce energy consumption and save money on your energy bills.
Quick wins for energy efficiency
While smart procurement is key, these simple yet effective energy efficiency improvements can also lower your overall consumption, leading to further cost savings.
- Heating: lowering your thermostat by just 1°C can reduce fuel consumption considerably without impacting the comfort of elderly residents.
- Lighting: upgrading to LED lights is a simple but highly effective way to reduce lighting costs. LEDs use up to 90% less energy than traditional bulbs. Installing motion sensors in staff rooms, storerooms and corridors ensures lights are only on when needed. Utilising natural light where possible can also reduce electricity costs and improve the well-being of residents.
- Appliances: when replacing laundry and kitchen equipment, opt for energy-efficient appliances. Modern commercial washing machines and dishwashers use significantly less electricity and hot water, contributing to lower energy bills over their lifespan.
- Insulation: preventing heat loss is essential. Effective loft insulation and cavity wall insulation are vital for any energy-efficient care home, making rooms feel warmer and reducing the workload on your heating system.
By implementing these energy efficient practices you can improve energy efficiency and reduce care home energy costs.
How Business Utility Hub can help
Managing energy procurement while running a busy care facility can be overwhelming. That’s where Business Utility Hub comes in. BUH provides a clear, expert service that takes the pressure off your team, helps you control costs and identifies where you could save energy without affecting resident comfort.
Our dedicated account managers understand the pressures care homes face, from high heating demand to rising electricity bills. We analyse the market daily, compare offers from a wide range of business energy suppliers and give you straightforward advice with no hidden fees.
If it makes sense to switch energy suppliers, we’ll manage the full process for you. That includes reviewing your current energy contract, explaining your options clearly and handling the switch from start to finish.
We also help with the more complex parts of energy management, including contract terms, VAT considerations and tax relief. You can focus on providing excellent care for your residents, while we help you manage your gas and electricity costs with confidence.
Frequently Asked Questions about energy savings for care homes
Do care homes get help with energy bills?
Yes, care homes can get help in several ways. The most direct financial relief comes from qualifying for the reduced 5% VAT rate and CCL exemption on energy bills. Additionally, government schemes like the Boiler Upgrade Scheme (BUS) may offer grants to help offset the cost of energy efficiency improvements, such as installing new heating systems.
How much energy does a care home use?
Energy consumption in care homes is high due to 24/7 heating, hot water, laundry and medical equipment needs. A typical 20-bed nursing home can use around 395,000 kWh of energy per year, which is comparable to the consumption of 18 average UK households. This highlights why energy efficiency and smart procurement are so critical for the care sector.
Take control of your care home energy costs today
Reducing energy costs is one of the most practical ways to improve your care home’s financial health. By securing the right energy contract and ensuring you’re on the correct tax rate, you can unlock significant savings.
Contact our team today for a free, no-obligation review of your current energy costs.
- Call us: 0800 781 2700
- Email us: savings@businessutilityhub.co.uk
