This Business Energy Comparison guide will cover how much energy an average restaurant uses every year. We’ll also provide some tips for cutting restaurant energy costs so you can get the most out of your energy consumption and save money.
How Much Energy Does An Average Restaurant Use Every Year?
How Much Energy Does An Average Restaurant Use Every Year?
The amount of energy a restaurant uses depends on a number of factors.
For example, the size of the restaurant, the cooking equipment used, the location, and the energy supplier can all impact the amount of business gas and electricity a restaurant consumes every year.
However, research from the Carbon Trust estimates that UK catering businesses use around 21.6 kWh of energy every year. This amounts to about 6% of a restaurant’s total operating costs for the year.
The same research also provides a rough guide to the energy required to produce a meal. So, a meal in a snack bar costs around 5p worth of energy, a meal in a steakhouse comes in at around 22p, and a meal in a hotel restaurant costs 45p.
Additionally, a large percentage of average energy usage in restaurants comes from energy wastage. This includes energy lost when cooking food and from faulty equipment.
How Much Energy Does a Restaurant Use?
Exactly how much energy your restaurant consumes a year depends on several factors but estimates can help give you a rough idea.
For example, the average annual bill can be as much as £3,660 for a small restaurant and £7,234 for a large restaurant. This works out at a range of £305 to £602 a month depending on the size of the restaurant.
However, with business gas and electricity prices rising, costs are subject to change at the drop of a hat. This means you could find yourself paying much more than the national average. Often, restaurants can’t predict how much they’ll be charged for business electricity and gas until they receive their first bill.
This is why you must always look for ways to reduce your restaurant’s energy consumption. Something as simple as turning off equipment can make a huge difference to your annual energy expenditure.
How Much Electricity Does A Restaurant Use?
Generally, restaurants tend to use more electricity than other businesses. This is due to the amount of energy needed to cook and prepare food and keep customers comfortable.
On average, small businesses use between 15,000 and 25,000 kWh while medium-sized businesses use between 25,000 and 50,000 kWh.
Other factors that can impact a restaurant’s annual electricity bill are lighting, air conditioning, heating, and ventilation. The bigger the space is, the more energy usage will be required to heat and power the building. This will have a direct impact on the annual energy bill.
According to a study published in the International Journal of Low-Carbon Technologies, a typical restaurant uses 70 kWh for refrigeration, 37 kWh for grills, and 35 kWh for ovens per day. Still, this is just an average and the more cooking equipment you have, the higher your business electricity bills will be.
How Much Gas Does A Restaurant Use?
Most businesses rely on gas for water heating and central heating. Restaurants have the added expense of using gas for cooking food. This can lead to expensive business gas bills for both small and large restaurants.
Typically, a restaurant’s average gas usage is around 15,000-30,000 kWh for small restaurants and 30,000-65,000 kWh for medium restaurants. But with as much as 18% of a restaurant’s gas bill spent on heating water, insulating hot water pipes can also help keep costs down.
Again, business gas rates can differ depending on the size of the restaurant and the equipment used. The unit cost will also fluctuate based on the market.
How To Estimate Utility Costs For A Business
The energy rates you are charged for your business will depend on a number of factors, including:
- The size of the restaurant
- The restaurant’s credit rating
- The location of the restaurant
- The business type (there are different types of catering businesses)
- The restaurant’s annual energy usage
- Wholesale energy prices
This information can help you calculate your business gas and electricity usage for the year and avoid any unexpected surprises.
Most of the costs included in your energy bill will be based on how much electricity and gas you consumed the previous month. This includes the unit cost (cost per kWh) and the standing charge (fixed daily minimum amount). However, these fees will also be accounted for:
Wholesale energy prices
This is how much your energy supplier pays for the gas and electricity it provides you.
Environmental costs
Some energy suppliers are obliged to participate in government-led environmental incentives.
Value Added Tax (VAT)
This is a tax on goods and services depending on the amount of energy used. The standard rate is 20%.
Network costs
Your energy supplier has to pay for transporting energy to your premises.
Operating costs
This is how much it costs your energy supplier to operate and run your account.
Climate Change Levy (CCL)
Businesses that use more than 33 kWh of electricity and 145 kWh of gas per day are taxed on each unit of energy. This is to encourage businesses to become more environmentally friendly.
How To Save Money On Energy
Business energy bills are certainly not cheap but there are steps you can take to reduce your restaurant’s energy consumption.
Here are some ways you can cut restaurant energy consumption for lower monthly bills:
Conduct an energy audit
This is essentially an inspection of your restaurant’s energy efficiency (the use of less energy to perform the same task). It can help you pinpoint areas where you could save money on your annual energy bills.
By knowing where to make changes, you can make significant energy savings and slash the price of your annual energy bills.
Use energy-efficient lighting
Switching to more energy-efficient lighting can be a quick and easy way to lower the amount of total energy consumed every year. This includes LED bulbs and motion-activated lamps.
Other energy efficiency measures include replacing high-energy equipment and making use of natural light wherever possible.
Turn off equipment when not in use
One of the biggest energy wasters in commercial kitchens is keeping equipment on when not in use.
Some restaurants keep extractor fans on overnight or between services. This can produce up to 10 tons of carbon and could be the biggest contributor to your high energy bills.
Service equipment regularly
Old equipment is likely to break down more and often requires more energy to keep operating. This is especially true for appliances with a high energy rating, such as a ventilation system or heating and cooling equipment.
By servicing equipment regularly, you can ensure everything is in good working order. This can prevent you from wasting money on faulty equipment.
Switch energy providers
Switching energy providers can help you save money on your annual energy bills. There are business energy brokers and consultants out there that can help you if you’re struggling to find a good deal.
Some business utility providers have better deals than others and you might discover you’ve been paying more than you should be.
Final Thoughts
Running a small or medium business is becoming increasingly difficult for companies in the hospitality industry. This is especially true in the UK where rising energy prices are forcing some restaurants to close their doors for good.
With our helpful guide, you can estimate how much your annual energy usage is likely to be. This can help you prepare your finances and plan ahead for further price rises. Compare restaurant energy prices with Business Energy Comparison.
Frequently Asked Questions
How much electricity and gas do restaurants use?
Restaurants use a lot of energy because of the number of appliances needed to cook, heat, and store food. Heating, lighting, and ventilation can also lead to high business electricity and gas bills. Total usage depends on the size of the restaurant.
What uses the most energy in a restaurant?
Typically, cooking, heating, and refrigeration make up 80% of a restaurant’s total business electricity and gas expenditure for the year. These are the areas you should target to cut business energy prices.
How can restaurants reduce their carbon footprint?
There are several steps you can take to reduce your restaurant’s carbon footprint. For example, switch to energy-efficient appliances and lighting, reduce energy wastage, and only open fridge doors when needed. This will lead to increased energy savings.
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