Energy Consumption In Restaurants
The first step in operating a restaurant is to figure out how much it costs to run. Energy consumption in restaurants is often the biggest surprise to new restaurateurs. The average outlay for a restaurant is around 70% of its gross sales. Whether it is a steakhouse, a cafe, or a fast-food joint, the cost of ingredients can be staggering. Besides Food Cost and Labour costs, Energy cost is the most important operation cost to audit weekly and monthly.
Being able to precisely anticipate your company’s utility bills is an important aspect of financial planning.
According to recent data, small businesses spend between £2,367 and £3,660 per year on electricity, while medium-sized enterprises spend between £3,774 and £7,234 per year. Small businesses typically pay £820 – £1,458 per year for business gas, while larger firms pay £1,458 – £2,239 per year on average.
Due to the escalating energy spike, most restaurant owners have had enormous increases in energy prices as their fixed term ends.
A study by the Federation of Small Businesses (FSB) shows that between February 2021 and February 2022, a small business in London with a commercial property will see its electricity and gas bills go up from £4,724.73 to £11,589.89 (+145%) and from £1,345.07 to £4,815.36 (+258%), respectively.
The unit cost you are charged by your provider (which is the cost per kWh of energy you use) and the standing charge, which is a daily amount that covers the cost of transporting energy to your business premises and maintaining the national grid, are the two key things to pay attention to when looking at your business energy bills.
How Much Electricity Does A Restaurant Use Per Day?
You’ll need to know what these charges are and how much the energy consumption in your restaurant is to determine your utility expenditures.
An example of the escalation cost of energy consumption in restaurants comes from Mr. David Fox. Manchester Evening News highlighted his dilemma in a recent article. The scary numbers that Mr Fox posted make it clear how the escalating energy prices are having detrimental effects on restaurant businesses across the country.
In a thread titled “Electricity Prices for Small Businesses,” in which he talked about energy consumption in restaurants. Mr. Fox’s restaurant, Tampopo, is an Asian street food restaurant located in Albert Square, Manchester. Mr. Fox said, “At one of my restaurants, the electricity bill is £1,200.” My electricity bill was £16.9k per year, or £325 per week, two years ago. Last year, it was £62k/year, which is £1,200/week.
At £508 a day for a restaurant with 110 seats, he would have to make £850 just in sales to pay for the electricity bill. That doesn’t include the cost of my labour, gas, cleaning, or any other direct costs of his restaurant. He said, “We would have to make £2,180 in sales for the day just to cover the direct costs of being open. (By the way, £436 of that would go right to the government in VAT.)
Often, it is not until a company receives its first bill that it learns how much its energy consumption cost is and as a result, how expensive its future costs will be.
How to calculate a company’s utility costs
In accordance with data published in the International Journal of Low-Carbon Technologies, it’s easy to see how energy consumption and costs for catering businesses may quickly build up when the business is growing.
The average daily electricity use of refrigerators in restaurants was 70 kWh. In comparison, grills used 37 kWh and combination ovens used 35 kWh, according to a study published in the International Journal of Low-Carbon Technologies.
Another research by the FSB shows that one in four small businesses plan to close, shrink, or reorganize if energy relief ends abruptly in April of 2023.
Given these data, it’s simple to understand how energy use and costs for catering enterprises may quickly add up.
How can I save money on my energy bills?
According to the Carbon Trust, even minor efficiency improvements in restaurants can result in energy savings of up to 20%.
How Much Energy Does An Average Restaurant Use Every Year?
Due to the amount of equipment used in the food preparation process, restaurants may use a lot of energy.
Furthermore, a significant portion of energy consumption in restaurants is dedicated to lighting and heating, ensuring a comfortable and enjoyable experience for the customers.
The UK’s catering sector as a whole spends £400 million and uses about 20,000 million kWh annually.
Related articles:
The Inflation Effect On Your Restaurant
How Much Electricity Does A Restaurant Use?
The number and type of appliances a restaurant utilizes will determine how much electricity it consumes.
You must be aware that restaurants use a lot more electricity than small and medium-sized businesses, though. The majority of restaurants use electricity in the following places:
One aspect of running a restaurant is the amount of power it takes to keep the lights on:
- Refrigeration 43%
- Cooking 14%
- Ventilation 12%
- Cooling 11%
- Lighting 6%
- Other 14%
Refrigeration uses about 70 kWh of electricity on a daily average, followed by grills at 37 kWh and ovens at 35 kWh.
However, energy consumption in restaurants will increase as you have more refrigerators, freezers, grills, and ovens.
How much gas a does restaurant use?
Most restaurants use gas mostly for cooking.
Gas is nevertheless used for both central heating and water heating, exactly like in the majority of enterprises.
What gas is used in a restaurant as a percentage of overall gas usage is how the restaurant’s average gas usage is broken down.
- Cooking 67%
- Heating 15%
- Water Heating 8%
How to calculate energy rates for a restaurant?
Your energy costs will depend on a variety of factors:
- The status of your company’s credit
- Your restaurant’s size
- Where is your restaurant located?
- What kind of business you’re in
- The industry you work in
In addition to costs based on how much energy you use, your energy bill pays for a few other things:
Wholesale costs are how much your supplier pays for energy that they then sell to you. Network costs are how much your supplier pays to get the energy to your restaurant.
Taxes: Depending on how much energy you use, you will have to pay either 20% or 5% VAT, as well as CCL (Climate Change Levy). If your restaurant uses more than 33 kWh of electricity and 145 kWh of gas per day, you may have to pay a fee. Operating costs are how much your supplier pays to manage your account.
Environmental costs: how much do suppliers need to pay for government programs to protect the environment
How much does the electricity cost a typical restaurant each year?
As this guide, it is hard to say exactly how much energy a restaurant will use each year because each business is different. Still, to give you an idea of what the average amount is, you can compare a restaurant to a big business.
A large business uses an average of 50,000 kWh of electricity each year. Assuming that the average price per kWh is 14.3p, the annual electricity bill will be £7,234.
What is the hourly electricity consumption of a restaurant?
The highest electricity consumption per square foot was found in the fast food industry, at 73.9 kWh.
On average, fine dining restaurants consume 43.5 kWh per square foot. On average, bars, pubs, and lounges use 26.3 kWh per square foot of space because of their less power-hungry appliances.
How can your restaurant use less energy?
Even though a restaurant will always need a lot of energy to run well, there are several things you can do to make it use less energy.
If you do these things, your energy bills could go down by up to 20%.
Lighting
Change out your old light bulbs for LED bulbs and put them in fluorescent tubes.
If you turn down the lights, there will be a lot of natural light.
Keep the lights out of a room when you’re not using it. Install time switches and motion detectors.
Heating
- Smart thermostats should be put in. A smart thermostat, or any thermostat for that matter, should be installed on an inner wall in a common area, far from draughts and other potential sources of temperature fluctuations.
- Using smart technology will allow you to better control heating, while automated pan sensors will turn off hobs when a pan is removed.
- Turn down the heat by 1°C. Even a one-degree drop in the central heating system can have a significant impact on your monthly energy bill. As an added bonus, you might be able to save as much as 10% on your annual heating costs.
- Use the air conditioner only when you need to. Proper Installation, avoiding Direct Sunlight, insulating the space, and maintaining the ventilation system are all important.
- Put refrigerators and freezers far away from stoves and ovens.
- Only open fridge doors when you need something.
- Check to see that all the seals are in place.
- Regularly defrost and clean fridges and freezers.
- Before you buy cooling equipment, check its energy rating.
Water management
- Insulate the hot water pipes.
- Install taps that spray water.
- Fix taps that leak right away.
- Keep water at 60°C
Equipment
- Keep up with all the appliances.
- Only buy things with a good rating for how well they use energy.
- Induction stoves can replace gas or electric ones.
- At the end of the day, turn off all the cooking equipment.
Changing these things can help you save money on your energy bills and be better for the environment. All of these ideas are easy to put into action and will help your restaurant do better.
You should try to get all of your employees to change the way they use energy.
Make sure they turn off the lights when no one is in the room and turn off the equipment when they leave work for the day.
If everyone works together, you’ll soon see that your restaurant uses much less energy than it did before.
Tips for lowering your business’s electricity consumption
Here are a few ideas and tips for lowering your business’s electricity consumption and bills:
- Turn on equipment only when it’s needed, and turn off grills, hobs, and fryers as soon as they’re done. Have a daily “Light-up” schedule.
- Make sure you have the right tools for the work, such as pans that are the right size for the heating ring and lids and covers to keep the steam and heat in.
- Keep hot food storage to a bare minimum.
- Maintain your culinary equipment to ensure that it runs well.
- Consider replacing gas or normal electric hobs with induction versions, which ensure that nearly all heat is delivered to the food and are therefore extremely efficient.
- Before purchasing, compare the energy usage and power ratings of various appliances.
- Place your refrigerator in the room with the least amount of heat.
- Keep the number of door openings in the freezer and chiller to a minimum.
- Change to more energy-efficient lighting, such as LEDs or fluorescent tubes.
Making your restaurant more energy efficient can help you save money and reduce your carbon footprint while also making your business function more efficiently and providing a cooler, more pleasant working environment for your employees.
