Your Essential Guide to Business Energy in Australia

What is business energy?

Let’s start with the basics: business energy is, well, energy for businesses. Just as your home receives a supply of gas and electricity, so do businesses – and they certainly wouldn’t get far without it!

This guide will fill you in on everything you need to know about business energy, with info on tariffs and meters, prices, environmental schemes, and everything in between.

Is business energy cheaper than domestic energy?

Just like with domestic energy, Australian businesses with metered premises in the following states and territories tend to get cheaper rates:

• NSW
• South East Queensland
• Victoria
• Australian Capital Territory
• South Australia

Businesses in Tasmania, Western Australia, and parts of Queensland tend to have less choice, and rates are higher though set within a government-regulated market.

Your business’ energy rate will depend on a few factors, such as your energy usage, chosen supplier, and the suppliers available in your location.

Who supplies business energy and which is the best supplier in Australia?

These are our top suppliers for business energy in the country:

Tariffs

Some tariffs have variable usage rates, based on when your business uses energy.

This means you will be charged differently based on your tariff and your usage.

Time of use

There are three time periods which affect your bill: off-peak, shoulder and peak.

• Off-peak: when energy usage is low. This is the cheapest period.
• Shoulder: a period between peak and controlled load times. This period tends to be cheaper than peak periods.
• Peak: when energy usage is the highest, such as weekdays or evenings.

What’s a controlled load?

A controlled load is the result of electricity being used by a stand-alone item, such as an irrigation pump. Controlled loads are recorded by a separate meter and can be billed as off-peak, making your energy bill cheaper.

Demand tariff charge

Demand charges exist so networks can cope with super hot days. Distributors need to ensure they can maintain the network to be able to handle the peak of the demand, even if it only lasts for a few days.

How are demand tariffs charged?

This charge is based on max demand for electricity in kW, calculated based on the highest energy usage over 12 months.

These charges exist to encourage less usage of electricity during peak times, as this is when pressure is heaviest on the networks.

Should I opt for demand charging?

Demand charges could be beneficial for your business if you use high amounts of electricity during peak times, as this is when the demand is calculated. But if your usage goes above the limit, then your charges will be a lot higher.

Solar feed-in tariff

When unused electricity is sent back to the grid by your solar power system, this tariff will credit it to your bill. The amount will depend on you location and the size of your solar power system.

Gas tariffs

Your gas tariff amount depends on your state and supplier.

Your gas bill is divided into two parts: supply and usage charges.

• Supply charge: the daily service charge to have gas supplied to your business
• Usage charges: rates charged for your gas usage

Seasonal gas rates

This rate is charged between peak season (winter) and controlled loads (non-winter).

Seasonal gas rate can be charged as a single rate or a block rate, depending on how much gas your business uses.

(This type of gas rate is only available in Victoria).

Non-seasonal gas rates

With this tariff, the rate is the same, no matter the season.

Other fees and charges 

There are other fees that come with setting up gas and electricity for your business, although these do change depending on your state.

Electricity:

• Solar meter installation
• Reconnection fee
• Disconnection fee
• Special meter read

As an example, in New South Wales, Endeavour charges $43.56 for disconnection, reconnection and a special meter read, and Essential charges $20.21 for a reconnection and a special meter read.

What is an energy broker?

An energy broker helps businesses or individuals find better deals for their energy. They essentially act as a middle man between suppliers and customers, in the same way that a comparison site does.

Partnering with an energy broker is very much a win-win situation. Businesses save lots of money on their bills, and all for no cost and minimum effort. Brokers have a very deep knowledge of the energy market, and build close relationships with suppliers, who may in turn offer them special rates.

How to save money on your business energy bills?

How to reduce business energy consumption: top five efficiency tips

Using less energy will reduce your bills, and your business’ carbon footprint. It’s not rocket science – we know you’ve heard it all before. However, it can be easy to forget and fall into wasteful habits. Here are five quick efficiency wins:

1. Using energy saving light bulbs

See, we told you these would be quick wins! CFL and LED bulbs can reduce energy consumption by 75% and last up to three times as long. In times gone by, energy saving bulbs were synonymous with a harsh, clinical white light, but they’ve come a long way since then.

2. Shutting down appliances at night

Again, really basic but highly effective. Reminding staff to shut down computers, turn off coffee and vending machines, and switch off lights and aircon is a quick way to minimise waste.

3. Using motion sensored lights

Now you have your lovely efficient new light bulbs, it’s time to take things one step further by using motion detectors. Consider installing these in meeting rooms and toilets, two areas that are likely to be vacant for longer periods of time.

4. Going paperless

Depending on the machine, printing a double side of A4 uses around 0.04 kWh of energy. That might not sound like much on its own, but it quickly adds up if lots of people are printing several pages a day. Try to develop processes that rely as little on printing physical pages as possible. Not only will you save money on your energy bills, but you will also spend less on toner and paper, and reduce your impact on the environment.

5. Being flexible

Calling this a ‘quick’ win may be a bit of a stretch, but allowing employees to work from home for a day or two per week will reduce your overheads dramatically. What’s more, there are a wealth of case studies indicating that working from home can have a positive uplift on productivity. With instant messaging services such as Slack, there’s really no reason why someone working from home should be any more difficult to contact than someone in the office.

Environmental schemes for businesses

Energy is obviously a big area of concern when it comes to the environment. In Australia, there are two major schemes that aim to improve and incentivise the cleanliness of the energy that businesses use.

These two schemes also have a bearing on energy costs for businesses, but in two very different ways. Let’s take a closer look at them:

GreenPower

GreenPower is a government scheme that enables businesses (and residential customers) to buy electricity from renewable sources.

Most Australian business energy suppliers offer at least one plan with a GreenPower add-on. Usually, your supplier will offer a few different set percentages – most often ranging from 10% to 100% – and you’ll be able to choose what percentage of your energy comes from government accredited renewable sources.

GreenPower does cost a little extra – usually somewhere between 2 cents and 5 cents per kWh of electricity that you use, on top of the usage charge you’d already be paying. This amount is set by each individual supplier, not the government – so as with anything, you’ll want to shop around for the best rate.

Remember, GreenPower is an investment in renewable energy that can only mean better things for the planet. Plus, consumers prefer their businesses to be environmentally conscious – so don’t dismiss this out of hand just because it adds an extra cost to your bill.

The solar feed-in tariff

Now, here’s where you can make some money! If your business has a solar energy system installed, you can sell your unused electricity back to the power grid through your energy supplier. The money you receive for this is called a solar feed-in tariff (FiT).

Usually, your supplier will offer a set amount for each kWh that you don’t use. This will normally appear as credit on your energy bill. The majority of suppliers offer the same amount per kWh on all their plans, but some outdo themselves by offering juicier rates on plans designed specifically for businesses with solar energy systems.

For the most part, though, FiTs tend to range from 5 cents to 12 cents per kWh. Again, it’s a matter of shopping around for good rates, which do vary from state to state.

Business energy tariffs and contracts explained

Some phrases you’ll likely come across are ‘energy contract’, ‘electricity tariff’, and ‘gas tariff’. Let’s break these down so you know exactly what you’re getting into.

Energy contract

When you buy electricity or gas from a provider, you enter a contract with them. This means that you’re responsible for paying the energy bill. You are, however, allowed to break this contract and switch providers (assuming your location has more than one provider).

You’ll have one of the following types of contracts:

• Standard retail contract: this is costlier than a market contract, and tends to charge annually. With some of these contracts, the government sets the price of energy, not the provider. There usually aren’t any discounts or offers here.
• Market contract: usually cheaper than standard contracts, and includes discounts. The caveat is that rates can change at any time, causing some instability.

Business energy tariffs

Tariffs tend to be made up of two parts:

• Supply charge: the cost of supplying electricity to your business
• Variable charge: the charge for each unit of energy used. Your bill will typically show variable charges as cents per kilowatt-hour for electricity and cents per megajoule for gas.