Act now to cut energy costs
Farmers should consider fixing electricity and gas prices now to protect against soaring production costs, according to rural consultant Savills.
Energy prices have already reached record highs, and are likely to continue increasing as demand rises, warns rural surveyor Tom Rattray. ’Wholesale energy prices have jumped by 30% since December, and all the major suppliers are warning of imminent price hikes.
’People who have not checked their contract recently could find that they are paying significantly more than expected. However, there are still plenty of deals to be had, if you shop around. Variable rates may look the cheapest right now, but with further price rises on the cards, farmers may prefer to minimise risk and opt for a fixed rate contract instead.’
It is not always necessary to switch supplier to lock into a better deal, he adds. ’Some people may be locked into existing contracts ’ but most suppliers will let you change tariff without incurring a fee, as long as you stick with them. At Savills we have extensive experience of dealing with energy suppliers ’ we can assist in finding the best deal for your farm, negotiate on your behalf, and secure greater flexibility within the contract structure. In some cases we have been able to cut energy costs by 22%, with suppliers paying any fees so our clients are not out of pocket.’
There are additional ways to reduce costs, whatever contract you negotiate ’ for example, using off-peak electricity where possible, and installing energy-saving light bulbs and timers. ’These are quick and easy wins, but can add up to significant savings.’ If heating or other equipment is getting out of date, farmers should consider replacing it with a more efficient version. ’The biggest savings can often be made on dairy units and farms with cold stores; with these high energy prices investing now may result in a rapid pay-back.’
The higher prices also make renewable energy options increasingly attractive, says Mr Rattray. ’Many of our clients are considering installing solar panels, small wind turbines, or biomass boilers. With the feed-in tariff and renewable heat incentive, these projects look extremely appealing; and as energy costs increase they will be an obvious move for many landowners.’
