10 July 2017: Operational costs such as electricity, has a major impact on the profitability and growth of a business. Cala van der Westhuizen, Head of Marketing and Sales at Energy Partners Home Solutions, a division of Energy Partners, and part of the PSG group of companies, says that this is especially true for small and medium sized enterprises (SMEs).
“Electricity is becoming increasingly expensive, which continues to put a lot of financial strain on small businesses, where minimizing operating costs is vital. Unfortunately, South Africa is likely to experience above-inflation hikes in electricity tariffs over the next eight years, which could have a huge effect on the future of the country’s SMEs. Eskom also recently motivated for a near 20% increase in tariffs next year.”
He adds that the impact of this on SMEs is significant, considering that electricity costs account for between 20% and 40% of a company’s expenses.
Van der Westhuizen says however, that smaller operations have advantages which could benefit them significantly. “It is much easier for a small company to manage electricity consumption. SMEs also have the opportunity to implement energy saving measures from the earliest stages of their business, and continue building onto it as they grow,” he says.
Van der Westhuizen explains five things companies can do to become more energy efficient.
Changing company culture
Changing employees’ energy usage habits can be difficult, but Van der Westhuizen points out that it can also yield the quickest results.
“Business owners need to remind their employees that their contribution to the company’s energy saving policies make a difference. Switching off lights, air conditioners and electrical equipment at the end of the day saves money.”
“Many people also do not realise that electronics still use power even when they are turned off. To name one example, ten computers plugged in overnight will leak around R10’s worth of electricity per week and as much as R50 during weekends. This can add up to about R400 at the end of the month,” he says.
A business that keeps regular office hours operates for at least 40 hours a week. Considering that most offices keep their lights on during that time, Van der Westhuizen says that lighting accounts for most of the electricity used in many businesses.
“One of the simplest and most cost-effective ways to minimise your business’ electricity usage, is by replacing regular light bulbs with energy-efficient LED units. They use 90% less electricity than standard light bulbs and because they have a longer lifespan, your business’ lighting will require less frequent maintenance.”
“Using natural light to your advantage is another simple way to save on electricity: open the blinds more often to lighten the workplace, consider installing a skylight or paint the office walls in lighter tones that automatically brighten indoor spaces,” he says.
Working from home
Van der Westhuizen says that introducing work-from-home policies for staff on certain days can give a business an energy break, as well as improve staff morale.
“Incorporating technology such as Skype, email and safe network connections into daily operations can help maintain productivity while also contributing to significant electricity savings in the long run.”
Keeping employees comfortable
A business’ productivity relies on the comfort and happiness of its employees, which is why air conditioners have become a workplace essential in our exceptionally warm summers. “They are very heavy electricity users, which is why it is a good idea to switch on the air conditioner early in the day, on a milder setting that gradually cools down the office as the day gets warmer. This is much more efficient than trying to quickly cool down an area during the hottest time of the day,” Van der Westhuizen says.
“The office kitchen is a great place for saving electricity. Because an SME has fewer staff members, a smaller fridge that uses less electricity might be sufficient, while a hot water urn is a good energy-efficient alternative to a regular kettle. Also, replace the microwave and toaster with newer, more energy-efficient models that might be more expensive to purchase, but will help your business save money on electricity over time.”
Utilising the sun’s energy to power your business will help you significantly reduce its monthly electricity bill, according to Van der Westhuizen. “Depending on the nature of the business, solar energy could help cut a SMEs electricity bill by as much as 30%.”
SARS also offers tax concession for businesses that go solar. A business can deduct the full cost of the installation of a solar energy solution from their business income tax in the first year.
Energy Partners Home Solutions offers customised solar solutions, as well as various financing options for SMEs. “As a registered financial services provider, many of our clients purchase a system that is financed by us and which they can easily pay off out of the operational budgets of their businesses. In certain cases, we can even offer a Performance Lease Agreement, which allows for the installation of the system at a fraction of the cost.”
“SMEs may be the hardest hit when it comes to electricity rising costs, but they also have some of the best opportunities to build the leanest and most efficient operations in their markets,” Van der Westhuizen concludes.
About Energy Partners Home Solutions
Energy Partners Home Solutions (EPHS) offer clients holistic and innovative home energy solution guaranteed to realise significant savings on a household’s energy bills. In 2016, the organisation launched its ground breaking new product, the ICON Home Energy Hub. The first solar inverter and battery combination developed specifically for the South African residential market.
The ICON forms part of a full home energy solution, including Solar PV, Batteries, Heat Pumps and LED lights. By combining these technologies, Energy Partners (EPHS) is able to provide significantly better savings and financial returns than other solutions: a family sized home could save up to 70% of their electricity bill and earn more than 16% return on their investment – twice what a standard PV-only solution would provide. For more information visit: www.poweryourself.co.za
About Energy Partners
Founded in 2008, Energy Partners is a leading energy solutions provider in South Africa that provides clients with innovative solutions (including fully outsourced supply contracts – e.g. steam generation) to suit their needs. Energy Partners has built a high quality team of talented individuals and robust processes which offer end-to-end solutions and integrate the different components of energy optimisation to deliver optimum results – including capital solutions that put clients in a positive cash flow positions from day one. Industries in which Energy Partners specialise include: food retail, retail, healthcare, hospitality, food processing and logistics. For more information visit www.energypartners.co.za
PSG Group is an investment holding company consisting of underlying investments that operate across industries which include financial services, banking, private equity, agriculture and education. PSG Group has a market capitalisation in excess of R40bn, with our largest investment being a 30,7% interest in Capitec.
Additional group companies include Energy Partners, Impak, Curro and Capitec.