The Unique Energy Challenges Care Homes Face
Running a care home is a 24/7 operation.
Unlike other businesses that can power down overnight, care facilities must maintain consistent heating, lighting, and medical equipment use around the clock.
This constant energy demand creates a significant challenge: how do you manage rising energy costs while ensuring resident comfort and safety?
The stakes couldn’t be higher. Energy often ranks as one of the top three operational expenses for care homes, with recent statistics showing care facilities can spend up to 10% of their operating budgets on energy costs alone.
Why Care Homes Pay More for Energy
Care homes face unique energy demands that other businesses don’t:
Round-the-clock operation Most businesses operate 8-10 hours daily. Care homes run 24/7, using energy constantly.
Temperature requirements Elderly residents often need higher ambient temperatures (21-24°C) compared to standard office environments (19-20°C).
Medical equipment Essential medical devices require constant power and can’t be switched off to save costs.
Regulatory compliance Care homes must meet strict regulations regarding temperature, lighting, and air quality.
Older buildings Many UK care facilities operate in older buildings with poor insulation and outdated heating systems.
The Financial Impact on Care Homes
The energy crisis has hit care homes particularly hard. According to recent data, care homes in the UK have seen their energy costs increase by up to 150% since 2021.
For a typical 40-bed care home, annual energy costs have risen from approximately £50,000 to over £120,000 in just two years.
This dramatic increase is putting immense pressure on an already strained sector, with some smaller care homes facing closure due to unsustainable energy costs.
5 Energy Procurement Strategies That Don’t Compromise Care
The good news? There are effective ways to reduce energy costs without affecting resident comfort or care quality.
1. Strategic Contract Timing
Most care homes simply renew their energy contracts when they expire, regardless of market conditions. This is a costly mistake.
Energy markets fluctuate significantly throughout the year. By working with a specialist energy broker like Link Utility Consultants, care homes can:
- Lock in rates up to a year in advance when markets are favourable
- Avoid renewing during peak price periods
- Secure longer-term fixed contracts during market dips
2. Consolidated Multi-Site Procurement
Many care home groups manage their energy contracts separately for each facility. By consolidating procurement across multiple sites, you can:
- Leverage greater buying power
- Reduce administrative overhead
- Negotiate volume discounts
- Standardise contract renewal dates
Our analysis shows that care home groups can typically save 8-12% through consolidated procurement strategies.
3. Transparent Broker Partnerships
The traditional energy broker model often includes hidden commissions that inflate your energy costs. At Link Utility Consultants, we operate differently:
- Fully transparent fee structure
- Capped broker commissions
- No hidden costs or surprises
- No terms and conditions on Letters of Authority
This transparent approach ensures you know exactly what you’re paying for and can trust that your broker is working in your best interest.
4. Supplier Relationship Management
The relationship with your energy supplier matters. A good broker will:
- Negotiate directly with over 50 suppliers to find the best rates
- Handle all supplier communications and contract management
- Resolve billing disputes and errors quickly
- Ensure accurate meter readings and billing
This comprehensive approach removes the administrative burden from care home staff while ensuring you’re getting the best possible service.
5. Forecast-Led Insights
Making energy decisions without market intelligence is like driving blindfolded. Our forecast-led insights help care homes:
- Understand market trends and price movements
- Time contract decisions strategically
- Budget accurately for future energy costs
- Avoid market volatility
Energy Efficiency Measures That Complement Procurement
While procurement strategies focus on getting the best price for your energy, efficiency measures reduce how much you use. The most effective approaches for care homes include:
Zoned heating controls Different areas of your care home have different temperature requirements. Implementing zoned heating controls allows you to maintain higher temperatures in resident areas while reducing heating in staff and storage areas.
LED lighting upgrades Replacing traditional lighting with LEDs can reduce lighting energy consumption by up to 75%. Modern LEDs also provide better quality light, which can improve resident wellbeing and reduce fall risks.
Smart building controls Automated systems can adjust heating, cooling, and lighting based on occupancy and time of day, ensuring energy is only used when and where it’s needed.
Staff training Simple behavioural changes among staff can significantly reduce energy waste without affecting resident comfort.
Government Support for Care Home Energy Efficiency
The UK government offers several schemes to help care homes improve energy efficiency:
The Care Home Energy Efficiency Tool A free government-funded website and assessment tool specifically designed for care homes to identify the most effective energy efficiency improvements.
According to the National Care Forum, this tool helps care homes find ways to save money on energy bills by identifying effective energy efficiency improvements and available grants and incentives.
Energy Company Obligation (ECO) This scheme obligates larger energy suppliers to deliver energy efficiency measures to domestic premises, including some care homes.
Boiler Upgrade Scheme Grants of up to £7,500 are available to install low-carbon heating systems, including heat pumps.
Real Results: Case Study
A 45-bed care home approached us with annual energy costs of £135,000, which had increased by 120% in just 18 months.
Our approach included:
- Restructuring their energy contracts to align with market dips
- Implementing a comprehensive procurement strategy
- Providing forecast-led insights for long-term planning
- Recommending targeted efficiency measures
The results:
- 15% reduction in energy costs in year one (£20,250 savings)
- Additional 7% savings through efficiency measures
- Improved budget certainty with fixed-rate contracts
- No compromise to resident comfort or care quality
Taking the Next Step
Energy costs don’t have to be a burden that threatens the financial viability of your care home. With the right procurement strategy and partner, you can significantly reduce costs while maintaining the high standards of care your residents deserve.
At Link Utility Consultants, we specialise in helping care homes navigate the complex energy market. Our transparent approach, capped commissions, and guarantee to beat any direct supplier renewal quote ensure you’ll always get the best possible rates.
Ready to discuss how we can help your care home reduce energy costs? Contact us today for a no-obligation consultation.
