Energy Saving Support for Hospitality Businesses

Pubs, restaurants and hotels across England are being offered a free digital tool to help them cut energy waste and reduce their bills. The government is expanding the scheme, delivered by Zero Carbon Services and funded by the Department for Energy Security and Net Zero, to more than 525 small and medium sized hospitality businesses. A 12 month pilot showed average savings of around £2,500 per year per business, with some venues cutting overnight energy use by as much as 66%.

Why This Matters

Hospitality businesses have faced sustained cost pressures in recent years. High energy prices, rising staffing costs, increased business rates, and post pandemic financial fragility have all contributed to a difficult operating environment for pubs, restaurants and hotels.

Energy waste particularly overnight when venues are closed, represents a significant avoidable cost. The government frames this initiative as both economic support for small businesses and part of the UK's broader clean energy and emissions reduction strategy.

What the Trial Showed

A 12 month pilot involving 90 hospitality businesses produced measurable results. On average, participating businesses saved around £2,500 per year. Two examples from the pilot illustrate what the tool can deliver in practice:

These savings came from operational changes, not expensive equipment upgrades.

How the Tool Works

The digital platform provides real time alerts when energy is being wasted and tailored behavioural recommendations to help businesses reduce unnecessary consumption. It identifies high waste hotspots including extraction systems, fridges and freezers, ovens, lighting, and idle equipment left running overnight.

The tool is designed to be accessible to businesses that lack dedicated energy management expertise. Its focus is on behavioural efficiency changing how and when equipment is used rather than requiring capital investment in new hardware.

Who Benefits

The direct beneficiaries are the 525 or more small and medium sized pubs, restaurants and hotels taking part in the expanded scheme. The government also points to indirect benefits, including support for local communities that rely on pubs as social infrastructure, shared learning across the wider hospitality sector, and a contribution to the UK's decarbonisation targets through reduced emissions.

Industry Perspective

Industry representatives have described the savings in terms that resonate with hospitality operators. The amounts saved have been characterised as equivalent to the profit from selling thousands of pints, a framing that reflects the tight margins many venues operate on. Energy efficiency is increasingly seen within the sector as a route to financial resilience rather than simply an environmental obligation.

Broader Support for Hospitality

The energy saving tool is part of a wider package of government support for the hospitality sector announced alongside this initiative.

Business Rates

A 15% cut to new business rates for pubs was announced in January, with an average saving of £1,650 in 2026/27.

Hospitality Support Fund

Funding for the Hospitality Support Fund has been increased to £10 million over three years. The fund aims to help more than 1,000 pubs provide community services such as cafés, village stores, play areas, and family friendly spaces.

Industrial Energy Transformation Fund

Alongside the hospitality announcement, the government confirmed that 20 businesses across England, Wales and Northern Ireland have received £23.4 million in grants through the Industrial Energy Transformation Fund (IETF) for energy efficiency and decarbonisation projects. Total project value is £60.7 million, subject to contracts.

Examples of businesses receiving IETF grants include:

• Molson Coors - £8.56 million for deep decarbonisation
• Wienerberger - multiple grants across Yorkshire, the North West and the Midlands
• Heinz (Wigan) - £997,000 for energy efficiency deployment
• AG Barr (Milton Keynes) - £2.18 million for energy efficiency deployment

How This Fits Into Wider Policy

The government links this initiative to several ongoing priorities. On clean energy, the scheme aims to reduce emissions from commercial buildings, promote digital and behavioural solutions, and support small businesses in transitioning to lower carbon operations. On economic resilience, it is intended to lower operating costs for hospitality businesses, reduce their exposure to global energy price shocks, and support community based venues during quieter trading periods. The government has also framed the initiative within its energy sovereignty narrative, reducing reliance on fossil fuel markets affected by international conflict and increasing the use of homegrown clean power.

The Wider Cost Context: Budget 2025

While this announcement provides targeted support, it sits alongside several measures from the November 2025 Budget that increased operating costs for hospitality businesses. These include higher employer National Insurance contributions, adjustments to alcohol duty bands, changes to VAT treatment for hospitality, increases in business rates multipliers, higher commercial waste and recycling charges, and rising energy standing charges.

These measures form part of the broader financial landscape in which hospitality businesses currently operate.

Understanding UK Hospitality Electricity Bills

UK business electricity prices have been among the highest in Europe in recent years, which increases the financial impact of energy waste on hospitality operating costs. Electricity bills for pubs, restaurants and hotels include several components beyond the cost of the electricity itself. The proportions vary by supplier, contract type and region, but the table below shows indicative ranges commonly seen in the non-domestic market for 2025-2026.

Because a significant share of the bill comes from non-energy costs, reducing unnecessary usage especially overnight can still deliver meaningful savings, but it cannot eliminate fixed charges such as standing charges or levies. The wholesale component is driven by marginal pricing, meaning gas prices continue to influence electricity costs even when gas makes up a smaller share of generation.

Conclusion

The expansion of the energy saving tool offers practical, low cost support for pubs, restaurants and hotels at a time when many are struggling with rising operating costs. The trial results show that behavioural changes alone can deliver meaningful savings, particularly in a sector where margins are tight and energy waste is common.

However, this support arrives in a wider financial context shaped by the November 2025 Budget, which introduced several measures that increased costs for hospitality businesses including higher staffing costs, adjustments to alcohol duties, increased business rates multipliers and rising fixed energy charges. These pressures have contributed to a challenging operating environment for many venues.

The government's new funding and digital tools do not reverse those earlier cost increases, but they do provide a route for businesses to recover some of the pressure through lower energy waste, improved efficiency and reduced avoidable overheads. For many operators, especially smaller pubs and independent restaurants, these savings represent a practical way to stabilise finances while navigating a period of elevated costs.

Taken together, the measures reflect a mixed policy landscape: rising structural expenses on one side, and targeted relief on the other. The effectiveness of this approach will depend on how widely the tool is adopted, how consistently businesses apply the recommendations, and how future budgets shape the broader cost environment for the hospitality sector.