For many businesses, managing energy costs has traditionally meant focusing on the price paid for electricity itself. However, wholesale energy is now only part of the picture.
Non-commodity costs – which are the charges on an electricity bill that sit outside the wholesale cost of purchasing electricity – are rising. Right now, these charges account for around 60–65% of a typical UK business electricity bill, making them one of the biggest contributors to overall energy spend. As many of these charges are forecast to increase significantly throughout 2026 and 2027, organisations are increasingly looking for practical ways to reduce their exposure.
Non-commodity charges currently account for around 60–65% of a typical UK business electricity bill – this is one of the biggest contributors to overall energy spend.
At Prime Controls, we know that part of the solution is intelligent lighting control. By reducing unnecessary energy consumption and managing demand more effectively, wireless lighting controls can help businesses mitigate the impact of rising non-commodity charges while delivering immediate operational savings.
Why are non-commodity costs rising?
The UK’s transition towards a lower-carbon energy system requires significant investment in new infrastructure, grid reinforcement and emerging generation technologies. As a result, several major cost categories are expected to increase over the next two years. Non-commodity costs are used to fund these investments and upgrades in infrastructure.
Why does energy consumption matter more than ever?
Many non-commodity charges are linked directly or indirectly to:
- Total electricity consumption (kWh)
- Peak demand levels
- Network usage patterns
- Capacity requirements
This means reducing energy consumption does more than lower the cost of the electricity purchased. It can also reduce exposure to the charges and levies applied on top of that consumption.
Energy efficiency and demand management provide:
- Reduced exposure to transmission and distribution network charges
- Lower capacity and peak-demand related costs
- Reduced environmental and policy levy costs
- Less exposure to bill volatility
- Greater predictability for energy procurement and budgeting
As non-commodity costs continue to increase, reducing consumption becomes an increasingly valuable strategy for protecting businesses against future pass-through cost escalation.
How do wireless lighting controls help reduce non-commodity costs?
In many commercial buildings, lighting is the second-largest electricity-consuming system after HVAC. It is also controllable – and therefore offers tangible opportunities for reducing energy consumption across commercial buildings.
Our wireless lighting control solutions help organisations achieve ongoing energy savings without extensive rewiring, disruption or major capital investment. By ensuring lighting is only used when and where it is needed, our wireless systems reduce energy waste and lower exposure to a range of non-commodity charges.
Two particularly effective strategies are occupancy and absence detection and daylight harvesting.
Occupancy and absence detection: Non-commodity cost benefits
Occupancy and absence detection automatically controls lighting based on whether a space is being used. This is a particularly effective strategy in intermittently used spaces, including corridors and stairwells, washrooms and storage areas – and
Lights are switched off when areas become unoccupied, preventing unnecessary energy consumption and ensuring electricity is only used when required. These areas frequently remain illuminated despite being unoccupied for significant periods throughout the day.
Occupancy and absence detection can help reduce exposure to non-commodity charges by:
- Reducing total kWh consumption, directly lowering exposure to Climate Change Levy (CCL), Renewables Obligation (RO) and other usage-based levies
- Eliminating unnecessary load during unoccupied periods
- Reducing demand that contributes to half-hourly consumption measurements
- Helping to lower maximum demand levels that influence certain network-related charges
- Supporting wider energy management and cost reduction strategies
By removing waste from day-to-day operations, businesses can reduce both their electricity consumption and the charges linked to that usage.
Daylight harvesting: Non-commodity cost benefits
Daylight harvesting automatically adjusts artificial lighting levels according to the amount of natural daylight available within a space. This includes zones where natural daylight can often provide a significant proportion of the required illumination for much of the working day.
Rather than operating at full output throughout the day, lighting is continuously dimmed when sufficient daylight is present, reducing energy consumption without affecting occupant comfort.
Daylight harvesting delivers several benefits that can help mitigate rising non-commodity costs. These include:
- Continuous passive demand reduction throughout daylight hours without occupant intervention
- Lower building demand during morning and afternoon periods that often overlap with higher-cost DUoS charging bands
- Reduced overall electricity consumption across the year
- Significant cumulative kWh savings that help reduce exposure to usage-based levies
- Improved demand profiles and lower ongoing energy waste
Because the savings occur every day and throughout the year, the impact can be substantial across larger commercial buildings.
Looking beyond energy prices
As non-commodity charges continue to rise, businesses need to look beyond wholesale electricity prices when developing energy strategies. Wireless lighting controls provide a practical and scalable way to support these objectives by:
- Reducing overall electricity consumption
- Eliminating unnecessary energy waste
- Lowering exposure to usage-based levies
- Improving peak demand performance
- Supporting sustainability objectives
At a time when non-commodity costs represent the majority of electricity spend, every kilowatt-hour saved helps reduce exposure to rising charges.
By combining energy efficiency with intelligent lighting control, businesses can not only reduce energy waste today but also build greater resilience against the increasing non-commodity costs expected in the years ahead.
Next steps?
Concerned about the impact of rising non-commodity costs? Talk to the Prime Controls team about our intelligent wireless lighting control solutions – and how we can provide scalable, easy-to-retrofit solutions to support your energy reduction plans.