Vehicle repair is one of the industries which will be impacted most by the huge rises in energy costs due to the requirements in the paint drying process in spray booth ovens. In this article, we will be taking a look at how the impact of rising energy costs will affect the vehicle repair industry as well as potential ways the impact can be reduced.
How have energy prices changed?
Energy bills are rising because wholesale energy costs have increased. This is due to many factors, such as worldwide gas shortages, rising demand due to the coronavirus pandemic, delays and complications caused by the Ukraine-Russia conflict, and low gas reserves in the UK.
Commercial gas prices have gone from £50 per therm (around 29 kWh) in early 2021 all the way up to a height of £314.52 per therm by March this year and continue to rise. Electricity prices similarly have risen from just over £50 per therm in early 2021 to over £200 per therm now. (source: Ofgem)
It has been well documented in the press that UK households were hit with a 54% increase in the energy price cap standard variable tariffs in April this year, with a staggering 81% currently predicted in October. There are then further increases quarterly expected with 19% being the current estimate for January, it seems likely that these massive increases will be felt all the way through 2023. Chris O’Shea, the chief executive of Centrica (Parent company of British Gas), has suggested there was “no reason” to expect gas prices would come down “any time soon”. He even suggested that “high gas prices will be here for the next 18 months to two years”.
How is this affecting the vehicle repair industry?
Unfortunately, industry is going to suffer even more. While the headlines in the press talk about domestic price cap increases, commercially there is NO PRICE CAP for energy companies to adhere to. This means that suppliers can increase their rates as much as they see fit to cover increased wholesale costs, so businesses not locked into long-term existing contracts will suffer from massively increased energy bills. In fact, out of contract rates have risen by an average of 100% since August 2021, but we’re hearing reports (ABP Club daily newsletter 8th August) from accident repair centres coming out of existing contracts from 2020 or earlier being quoted 450-500% increases for the same amount of energy.
Many companies using spray booths will still be on fixed-price contracts, which means that if they’re not aware of the commercial energy increases, and as we’re in the warmer period of the year with the lowest energy use, they may not have felt the pinch yet. Once these contracts run out, they will likely experience at least 250%+ increases even if they use the same amount of energy.
What can be done to reduce your spray booth related energy costs?
There are steps you can take to make energy use in a spray booth more efficient and reduce bills, which is essential for keeping customer costs low and staying competitive.
For example, AGM Services provides spray booth control system upgrades using retrofitting technology to cut operating costs from 10% up to a massive 70%. This incorporates advanced, energy-efficient technology to suit any type of spray booth oven, no matter how old. This also comes with the added bonus of increased monitoring of energy usage so that you can keep better track of where energy is being used during each process.
Additional energy saving features that can be retrospectively installed to existing spray booths is LED lighting, much more energy efficient than fluorescent or halogen lighting techniques as well as providing much better working environments for painters. AGM Services offer this as part of their energy-saving upgrades. Another option is to install auxiliary air movement systems such as Junair Spraybooths QADS™ which reduces base coat flash-off time and paint curing time and makes it possible for baking at lower temperatures, using significantly less energy.
All energy saving upgrades may be eligible for tax breaks as well as the day to day use savings.
You can’t afford to not make these changes as energy bills continue to rise, so contact AGM Services today and we’ll arrange a no obligation survey of your equipment to provide a report on how you can combat the oncoming cost increases.