How to minimise the impact of working from home on your energy budget?

For many of us in the UK, 2020 has marked a pronounced change in the way we work. A change that may last well into the next year. Indeed, some may even continue to implement these changes long after COVID-19 and the subsequent lockdowns have become a distant memory. Across the nation, many of us have been working from home for much of the year. And while it has, for many of us, been something of a mixed blessing, there’s compelling evidence to suggest that we can be happier and more productive when working this way.

We’ll answer all of your questions to help you better understand the long-term viability of working from home.

Understanding teleworking’s energy savings

Teleworking has been a viable option for many workers long before the arrival of the pandemic. Indeed, a growing number of employers have come to realise the potential benefits of allowing employees to work remotely on a part-time or full-time basis.

Employees who work from home do not use company energy and other resources. They don’t flush toilets, wash mugs, turn lights on or boot up their computers. As such, remote workers can be highly cost-effective for companies. Especially if they’re happier and more productive that way.

However, as studies in the US have noted, the energy savings can be hard to quantify in real-terms. The technology that facilitates seamless telecommuting is still relatively young, and more time and study are needed until we can accurately assess the true potential and real-terms energy savings that telecommuting can bring.

At the moment, however, there’s a sizeable gulf between potential energy savings and actual energy savings.

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Does working from home save energy?

The International Energy Agency concedes that working from home does save energy. However, how much energy is saved is largely dependent on workers’ individual circumstances. The biggest energy saving would be oil savings as a result of fewer cars commuting to workplaces, potentially reducing global oil consumption by 1% per year.

However, the IEA notes that during the first COVID-19 lockdown, the UK’s domestic energy consumption rose by 15%, while in the US, domestic energy consumption rose by 20-30%. However, while domestic energy rose, overall energy use actually declined by 20%.

Why?

Because workplaces generally use much more energy than the average home. Of course, this potentially creates problems in countries where the domestic energy fuel mix is more carbon-intensive than the business fuel mix (more on environmental impact later). And there’s potential for energy bills to climb when telecommuting. Which is why now, more than ever, your choice of energy supplier is hugely important.

Does working from home cut energy use altogether?

Studies cited by the World Economic Forum are pretty inconclusive when it comes to the specific impact of telecommuting, the COVID-19 pandemic and lockdown on overall energy use. However, the data trends indicate that while working from home does cut never use overall, the impact is not as pronounced as some may expect. Indeed, out of 39 studies analysed by the WEF, while 26 suggested that telecommuting cuts energy use, eight studies suggested that the impact was neutral or even negative.

In other words, it’s not enough to assume that working from home will cut energy use by default. It’s up to telecommuters to be proactive and take active steps to reduce energy consumption when working at home.

Measures to implement include:

• Make the most of your natural light! Not only is it the ultimate office perk, making your days more cheerful and productive, it also reduces the amount you need to spend on lighting your home during working hours.
• Speaking of lighting, make sure you’re using CFL or LED bulbs throughout your home. Old fashioned incandescent bulbs waste 90% of their energy as heat and need to be replaced more frequently.
• Unplug unnecessary devices like your TV, media players, etc. Not only can this save energy, it also eliminates distractions and keeps you focused.
• If you have an Economy 7 meter, charge your phone, laptop, tablet and other devices during off-peak hours when energy is cheaper.
• As the weather gets colder, wrap up warm while working. Try and resist the urge to turn up the heating, as this is likely to send your energy bills climbing.
• Use more energy efficient equipment, like a laptop or a tablet as opposed to a desktop computer.
• Try and mix things up by working outside of your home every now and then (pandemic permitting). Not only can this save energy, it can even help you to stay productive and motivated.
• Keep set working hours and stick to them. You may need to dedicate the end of every day to figuring out how best to spend tomorrow. But there’s certainly a temptation to work overtime when you’re working from home. However, those extra working hours all add to your energy bill.
• It goes without saying that you should also keep switching energy suppliers to ensure that you’re getting the best deals on the market for your gas and electricity.

How does working from home impact the environment?

If there’s a silver lining to the global pandemic, it’s that we’ve seen how beneficial the reduction in cars on the road has been for the environment. Major cities around the world saw rush hour traffic drop by between 65 and 95%. This equates to a huge reduction in greenhouse gases. According to Global Workforce Analytics, working from home for just half of the week could reduce global carbon emissions by 54 million tons every year.

What’s more, energy usage overall has dropped by around 20% at a time when many of us have either been working from home or placed on furlough. While domestic energy use has increased, this needn’t necessarily offset the environmental benefits and carbon savings from the reduction in vehicles on the road.

As of Q1 2020, the UK actually has its greenest energy fuel mix ever, with over 52% of our energy coming from green sources like wind, solar, hydropower and biomass. As nations strive to make their energy fuel mixes greener, there’s huge potential for an environmental revolution. And as we steer towards a more renewable future, we can likely look forward to cheaper energy because the energy generated is no longer dependent on finite resources like fossil fuels.

WFH: What it means for your finances

As we can see, when working from home it’s likely that your domestic energy use will increase, even as the amount you spend on petrol and other automotive expenses like wear on tyres, oil use etc. declines. But an increase in energy usage doesn’t necessarily mean an increase on your energy bills.

As a nation, we’re spending in excess of £800 million more than we should for the gas and electricity that we use at home. There are a number of reasons behind this. Some of us have no idea what happens to our energy tariffs when our fixed rate deals expire, and we spend longer on default tariffs with more expensive unit rates and standing charges. Moreover, many of us are unaware just how much choice we have, and we could save by switching energy tariffs regularly (every 12-18 months).

Switching can not only offset the energy costs associated with working from home, but can even make your remote working greener too. Many energy suppliers have 100% renewable electricity tariffs as well as tariffs that use renewable biomethane or carbon-offset natural gas.

Tax rebates, deductions and savings while you’re working from home

As well as the energy savings from switching, remote workers also benefit from tax incentives when working from home. As of September 22, 2020 Prime Minister Boris Johnson announced a program of tax relief to incentivise employees to work remotely for the next 6 months in order to slow the spread of COVID-19. This tax relief is intended to offset the costs associated with working from home.

On top of this relief, there are also benefits like the Warm Homes Discount, Winter Fuel Allowance and Cold Weather Payment that can help you to offset the cost of heating your home if you are receive a state pension or income-related benefits.

What expenses can I claim when working from home as an employee?

If your employer requests that you work from home, you can claim tax relief on some of the bills incurred from doing your job at home. You can only claim for things that are solely used for work purposes.

This includes:

• Extra costs for gas and electricity
• The cost of making business calls from your home phone

Unfortunately, employees cannot claim against their rent or broadband costs, nor can they claim against expenses that have both private and business use.

You can claim a flat rate of £6 per week which is redeemed from your PAYE tax over the following financial year. No proof is necessary to claim this. However, if you feel that your expenses cannot be covered by this, it is possible to claim more. However, this will involve filing a Self Assessment Tax Return and providing evidence that £6 per week will not be sufficient to cover all work-related expenses.

The right energy tariff makes all the difference!

If you’ve been working from home for much of the year so far, it’s likely that your energy usage has increased considerably compared to last year. But that doesn’t mean that your energy bills (or your carbon footprint) need to necessarily increase.

Now, more than ever, it’s vital that you switch energy suppliers regularly to ensure that you’re getting the best value for money on the gas and electricity you use. In many cases you can significantly reduce your carbon footprint and save money at the same time.

We can scour the market to find the best deals for you. We’ll even manage your switch from end-to-end to bring you cheaper, greener energy completely hassle-free.

Sound good? Get in touch with us today on 0330 818 6223 to find out more. We’re available from 8.30 am to 5.30 pm.

Would you like to know more about saving on energy bills? Great! Check out these related articles

1. Energy saving tips
2. Cheap energy deals
3. Impact of working from home

FAQ

Can you get help to heat your home over winter?

It’s advisable to wrap up warm when working from home to keep your heating costs manageable. However, if you are of pensionable age or in receipt of income-based benefits there are a couple of schemes that will allow you to get help with the cost of heating your home. These are the Winter Fuel Allowance and the Warm Homes discount. What’s more, if your area is struck by a period of extreme cold (0 degrees Celsius or below), you may also be awarded a Cold Weather Payment.

How much can I claim from HMRC when working from home?

If your employer has asked you to work from home, you can claim a flat rate of £6 per week to meet the cost of your additional expenses. However, if your expenses exceed this, you will need to fill out a Self Assessment Tax Return and provide evidence of your expenses.

Does working from home reduce carbon emissions?

It certainly can. Because you no longer need to commute to work, your vehicle is no longer putting out the exhaust emissions that contribute to your carbon footprint. Combine this with a new renewable energy tariff and working from home could significantly reduce your carbon emissions.

Is working from home sustainable?

It certainly can be. While nobody knows for sure what will happen when the pandemic is a distant memory, it’s likely that many employers will allow their employees to continue working from home on a part-time or full-time basis if they choose to. A measure that could improve productivity, work / life balance, workplace satisfaction and ecological sustainability in the future.