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How Much Energy Does An Average Car Garage Use?

Like all businesses, garages face the challenge of soaring energy prices. Wholesale energy prices have tracked sharply upwards over the last few years.

Garages need a substantial amount of electricity to trade. They are also hit by consumers delaying car repairs or new vehicle purchases because households are financially squeezed due to the rising cost of living.

We focus on this important sector and look at how much energy garages need to operate and how much it all costs. Our sector experts at Business Energy Comparison agree that garages feel the brunt of rising gas and electricity prices acutely because their energy consumption per square foot is higher than many other traders.

We discuss a number of valuable steps garages can take to reduce their energy bills.

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Average Car Garage Energy Costs

No two car garages are exactly the same in terms of their energy consumption patterns and cost.

Car garage energy prices differ across locations and supply arrangements. The size of the operation is the major factor that affects a garage’s energy costs. Size relates to the space, the number of employees, the amount of equipment and machinery as well as the number of vehicles serviced.

It’s difficult to quote definitive gas and electricity averages given rapid price movements and volatility in these complex markets. However, below we provide an indication of average usage and also an approximate guide to average costs:

Average Electricity – Annual usage and cost

  • Small Business: Average usage per year 15,000 – 25,000 kWh. Average Cost £8,565 (based on annual usage of 20,000 kWh)
  • Medium Business: Usage 25,000 – 50,000 kWh. Cost £14,214 (based on annual usage of 40,000 kWh)
  • Large Business: Usage – Over 55,000 kWh. Cost £20,359 (based on annual usage of 55,000 kWh)

Average Gas – Annual usage and cost

  • Small Business: Usage 15,000 – 30,000 kWh. Cost £3,436 (based on annual usage of 22,500kWh)
  • Medium Business: Usage 30,000 – 65,000. Cost £8,350 (based on annual usage of 47,500kWh)
  • Large Business: Usage – Over 65,000. Cost £7,645 (based on annual usage of 65,000kWh)

Large corporations often benefit from favourable unit prices which explains why the large business gas cost is lower than that of medium-sized companies.

Other Factors Which Affect A Garage’s Energy Bill

While size is a major factor, other elements which impact bills include:

  • The energy efficiency of the building
  • Location – Colder areas will require more heating for example.
  • Hours of operation
  • Gas and electricity usage behaviours of employees – An efficiency-conscious workforce will save money across the board.
  • Garage with dealership attached – A garage and car dealership unit typically requires more lighting and heating.
  • Electric vehicles on site – Demonstration models or customers’ electric cars will need to be charged. There’s a common expectation in the industry that an electric car must be fully charged when handed over to the customer.
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Factors Which Influence Businesses’ Energy Costs

The main price components of a typical utility bill are:

  • Standing charge– This is a flat daily charge that is unrelated to how much energy you consume. Your gas and business electricity suppliers calculate the standing charge based on their costs of delivering the utility to your premises.
  • Unit Rate– The Unit Rate refers to the charge of energy you consume measured in kilowatt-hours (kWh). Business energy suppliers incur a wholesale cost to acquire the energy and pass it on to you via the unit rate.
  • Taxes and Levies – Commercial gas and electricity are subject to several taxes and levies including VAT, Climate Change Levy, the Renewables Obligation, and other surcharges designed to promote the transition to alternative energy sources.

Companies can do little about taxes and levies, or the standing charge for that matter. The main way to reduce bills is to reduce consumption or manage usage more smartly e.g. outside of peak price periods.

Another crucial consideration is the type of supply contract you enter. Most businesses will be on one of the following contracts:

  • Fixed Rate– A Fixed Rate Tariff sets your utility rate upfront for a period of 1-4 years. You are protected against price increases but are locked into your rate so get no benefit if the price falls.
  • Variable Tariff – With a variable tariff you pay based on the prevailing wholesale energy prices. If the price of electricity or gas drops you benefit, and if the price rises, expect to feel the knock-on effect in higher bills.
  • Pass-Through Tariff – A pass-through tariff includes a fixed component relating to the wholesale energy costs, and a variable component relating to various floating elements
  • Green Energy Tariff – Consumers looking for a blend of eco-friendly energy sources can explore green tariff options.

If you are a new business or haven’t proactively sought a better deal, it’s unlikely that your current contract is the best you can negotiate. You can potentially find real savings by doing price comparisons across the business utilities markets.

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How Can Garages Lower Their Gas And Electricity Bills?

The UK Government recognises that businesses need support in the face of rising utility prices and introduced a scheme in 2022 to address the issue. The Energy Bill Relief Scheme fixed wholesale electricity prices for businesses at £211 per MWh (1,000kWh) and wholesale gas at £75 per MWh for 6 months from 1 October 2022 to 31 March 2023.

This effective price cap on charging costs provided much-needed relief. The scheme was replaced by the Energy Bills Discount Scheme to run from 1 April 2023 to 31 March 2024. The scheme allows discounts as follows:

  • Electricity: a maximum discount of £19.61 per MWh above a threshold of £302 per MWh (ie. if your unit cost is below £302 you don’t qualify for support).
  • Gas: a maximum discount of £6.97 per MWh above a threshold of £107 per MWh.

Government initiatives are well and good but what can an independent garage do to achieve savings? Here are some useful steps:

  • Many businesses benefit from efficient lighting like LEDs. Don’t leave lights on unnecessarily.
  • Ensure machines and equipment are in good repair to prevent drawing unnecessary electricity
  • When replacing machines and equipment look for more efficient versions
  • Ensure that areas requiring heating – admin and customer spaces for example- have good insulation
  • Switch off machines rather than leave them on standby
  • You can close the main doors to keep heat in, but only if this doesn’t compromise ventilation or safety
  • Encourage a utility-saving mindset among employees.

Apart from operating more efficiently, garage owners are also well advised to get energy comparisons as a first step to potentially saving real money. It’s crucial to compare the offerings of business energy suppliers by getting multiple quotes across the market.

That said, picking the best utility supplier and the most favourable deal remains a time-consuming and often complex exercise. Our expert team of brokers and consultants has the tools, experience, and expertise to reduce the time and complexity drastically.

Compare Energy Costs With Business Energy Comparison

Business Energy Comparison provides a comprehensive price comparison, advice, and switching service. That’s why we cover the market comprehensively, from major suppliers to reputable sector-focused operators. We currently have working relationships with over 27 suppliers.

We work with you and for you to optimise all aspects of your energy usage.

Whatever your profile class, from SME to large corporate, Business Energy Comparison is committed to offering you better energy solutions. Price comparison is the first step to potentially saving 45% on your utilities. Consider this well ahead of your contract renewal date.

If the best deal involves switching suppliers, Business Energy Comparison handles that process for you to ensure a smooth, successful transition.

Whether you’re a 6-person team handling mainly MOTs or a large corporate garage with multiple sites, we can connect you to the right supplier and help tailor an optimal energy package for you.

Start the process of securing better business gas and business electricity rates by initiating an invaluable comparison. The decision could lead to you paying half the cost you are currently outlaying.

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Start your journey and compare business gas and electricity rates with Business Energy Comparison today. Use our price comparison tool and in less time than it takes to make a brew, we’ll compile your best prices from the UK’ s best suppliers.

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Frequently Asked Questions

Can car dealers and garages benefit from green energy?

Most UK suppliers offer a supply package that has a high proportion of renewables as opposed to fossil fuels. If you want to reduce your carbon footprint and power your business in a more eco-friendly way, you will be able to explore a selection of green energy suppliers.

A green-powered company will attract new customers, especially those with an electric vehicle. The uptake of electric cars is projected to grow into the future.

Is electricity cheaper at night?

During the off-peak energy period which falls anywhere between 10 pm and 8 am the strain on the National Grid eases. During this time some electricity suppliers will offer cheaper electricity. Not all suppliers will offer this concession, however.