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In an energy-intensive industry like manufacturing, energy bills represent one of the largest overhead costs for many businesses and with ongoing market volatility and geopolitical pressures, prices have become volatile and difficult to predict.
For manufacturers with tight budgets, rising energy costs present a pressing challenge, and managing and optimising energy use has never been more important in keeping energy costs down.
In this guide, we explore the key factors behind rising energy prices and share practical tips to help manufacturing businesses save money on their energy bills whilst taking back control of their costs.
In recent years, the energy market has seen no end of volatility, with energy crises and geopolitical issues causing disruption and making high energy costs the ‘new normal’.
This uncertainty makes budgeting and forecasting far more challenging. Without predictable energy pricing, manufacturers struggle to accurately plan operating costs, which can impact financial stability and long-term decision-making.
With many energy-intensive processes, manufacturers have been hit particularly hard by rising energy costs, which put pressure on margins, particularly for businesses that cannot easily pass on costs to customers.
The effects don’t stop at the factory floor. Rising manufacturing energy costs can have a ripple effect on entire supply chains, as increased costs at one stage of manufacturing can cascade through the supply chain, raising prices across industries.
Over time, high manufacturing energy costs can affect competitiveness. UK manufacturers, in particular, may find it harder to compete with overseas businesses operating in regions with lower energy costs. When more funds are spent covering essential operating expenses, this leaves less available for investment in new technologies and long-term growth.
When developing a strategy for saving money on manufacturing energy bills, it is important to take a holistic approach, looking at all aspects of both your energy use and your approach to energy management and procurement.
The best way to save money on your manufacturing business energy bills is to take a deep dive into exactly how, where, and when your energy is being used.
A structured business energy audit is one of the most effective ways to build a clear picture of your energy use.
Not only can this inform your energy saving initiatives, but it can also make data collection and compliance much easier when it comes to mandatory reporting. By analysing consumption across equipment, processes, and operating hours, you can identify inefficiencies, uncover areas of waste, and prioritise the changes that will have the greatest impact.
Another helpful way to stay on top of your energy is to appoint a dedicated person or team to be responsible for your energy and sustainability.
This makes it easier to consistently measure performance, evaluate the impact of improvements, and ensure energy and sustainability remain an ongoing priority rather than a one-off exercise.
Manufacturing businesses typically operate in large buildings with extended operating hours which naturally leads to high energy use. One of the most effective ways to reduce manufacturing energy costs is by improving the efficiency of the building itself.
Simple upgrades can make a noticeable difference. Switching to LED lighting reduces electricity consumption and maintenance costs, and incorporating motion sensors ensures energy isn’t wasted in low-traffic areas. Improving insulation helps retain heat in winter and keeps spaces cooler in summer, cutting down on heating and cooling demands.
Other practical improvements include sealing refrigeration units to prevent energy loss, installing automatic loading bay doors that close when not in use, and using smart controls to better manage heating systems.
Specialist machinery is one of the biggest drivers of manufacturing energy costs, especially when equipment is running continuously or operating inefficiently. Optimising and improving how your equipment performs can lead to substantial energy and cost savings.
Preventative maintenance is a key starting point. Well-maintained machines run more efficiently, use less energy, and are less likely to suffer unexpected faults and costly downtime. It’s also important to ensure equipment is correctly sized for its role, as oversized machines often consume more power than necessary for the task they perform.
Compressed air systems are another common source of wasted energy. Regular leak detection and pressure optimisation can significantly reduce unnecessary consumption. Additionally, incorporating variable speed and load controls allows motors, pumps, and fans to adjust their output based on real-time demand, rather than operating at full capacity at all times.
Energy prices fluctuate throughout the day, meaning when you operate can be just as important as how you operate. A practical way to reduce manufacturing energy costs is by shifting your production schedules so they coincide with off-peak energy periods, when demand on the grid is lower and electricity rates are typically cheaper.
By shifting energy-intensive processes to these off-peak times, you can take advantage of lower tariffs without having to reduce your output. Although it may not be possible for many manufacturing businesses to completely shift their operations to off-peak times, some activities such as charging electrical equipment or running high-load machinery overnight or during quieter demand periods can significantly cut costs.
Many manufacturing processes generate heat as a by-product, and if it’s not captured, that energy dissipates and is lost. Recovering and reusing this heat is an effective way to reduce manufacturing energy costs and improve efficiency.
Waste heat recovery systems can capture heat from equipment such as ovens, compressors, and furnaces, and redirect it for practical uses like space and water heating.
By integrating heat recovery into your facility, you can lower energy consumption, reduce your reliance on external heating sources, and make better use of the energy you are already generating.
Investing in onsite renewable energy is a practical and cost-effective strategy for manufacturers looking to reduce long-term energy expenses. Businesses with high energy consumption and large premises are particularly well positioned to benefit from onsite generation, such as solar panels or wind systems. With substantial roof space often available, manufacturers can generate a significant portion of their own electricity, reducing reliance on volatile grid energy.
Renewable generation technology, such as solar panels, often have relatively short payback periods for high-usage manufacturing operations. Once installed, solar PV systems typically have a lifespan of around 25 years, meaning once paid off, you will be able to generate electricity for free.
Investing in renewables is also a great way to mitigate the risk of rising energy costs that are impacting manufacturing businesses, as you can improve financial independence and protect your business against rising and volatile energy costs.
Technology and infrastructure upgrades can only go so far without the support of the people using them every day. Engaging employees in energy-saving efforts is a simple but effective way to reduce manufacturing energy costs and waste across your manufacturing site.
You should start by training staff to recognise common sources of energy waste and to follow best practices in their daily routines. This includes things like shutting down idle equipment, reporting faults promptly, and operating machinery as efficiently as possible. These actions may seem minor, but when followed consistently across an entire workforce, they can make a real difference.
It is also important to encourage accountability, appointing an individual or team to be responsible for monitoring energy usage and ensuring best practices are followed.
A key step in saving money on your manufacturing energy costs is choosing the right energy plan or procurement strategy. The structure of your contract can greatly impact both short-term energy costs and long-term financial stability.
It’s worth regularly reviewing the market and shopping around for more competitive tariffs rather than automatically renewing your existing agreements. Fixed-rate contracts, for example, can help manage costs more predictably by protecting your business from price volatility, whereas flexible contracts may be better suited to businesses with in-house energy buying expertise.
Energy markets are complex and prone to volatility, so working with an experienced energy consultant can help you identify the most cost-effective approach and negotiate more favourable terms for your manufacturing energy costs.
Energy saving for manufacturing is about more than just cutting costs, it can also protect your business from unexpected volatility, boost your brand image and help you stay compliant with tightening sustainability and reporting requirements.
According to the Carbon Trust, many manufacturers can cut energy costs by 10–20% through low or no-cost measures alone. For energy-intensive sites, this can translate into tens or even hundreds of thousands of pounds saved each year.
With national net zero targets getting closer, sustainability is becoming a greater priority for many regulatory bodies, putting pressure on businesses. By improving energy efficiency, manufacturers can meet current requirements and prepare for future legislation changes.
Energy prices often fluctuate, driven by geopolitical volatility, creating uncertainty for manufacturers. By using less energy overall, businesses reduce their reliance on market energy, making them less vulnerable to sudden price increases.
Demonstrating a clear commitment to energy efficiency and sustainability can increase your appeal to large buyers and supply chain partners who prioritise low-carbon suppliers.
Energy efficiency often goes hand in hand with better equipment performance and maintenance. Efficient systems are typically more reliable, reducing the risk of costly breakdowns and improving overall productivity across your operations.
At Consultus Sustainability, we specialise in working with manufacturing businesses to help them cut energy costs, increase sustainability and stay compliant with regulations in a competitive market.
Business energy audits are the perfect place to start saving money on manufacturing business energy bills. Our experts will help you build a clear picture of your energy use across all your sites and operations, helping to spot any areas where you could improve efficiency, creating a tailored set of recommendations for your business. An energy audit is also often the first step in compliance reporting, giving you the data and insights needed to meet regulatory requirements.
Many manufacturing businesses are obligated to comply with energy and carbon reporting requirements. At Consultus Sustainability, we can help businesses to stay on top of their SECR, ESOS and Scope 3 reporting, ensuring accurate data collection that supports both regulatory obligations and sustainability goals.
We can also use the findings from your energy audits and carbon reporting to build a bespoke Net Zero Pathway for your business. This includes a range of recommendations to optimise your operations, resulting in significant cost savings.
To find out more about how we can support your manufacturing business, explore our services or get in touch with our team today.
