When it comes to running a business, energy costs can be a major expense, so it's important to ensure you're getting the energy deal that's right for your business.
Most energy providers will offer plans specifically tailored for businesses, but there is no one-size-fits-all plan that is suitable for every business.
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While there are some similarities, securing business electricity is not like finding an energy plan for your home. Choosing a provider will depend more on the size and nature of your business as well as how your business uses power.
It may be worth considering an energy consultant to help find the best plan for your business.
It depends on your state. For premise that uses 20,000 kWh per year, you might pay anywhere between $5,000-$10,000 annually.
|State||Average annual cost||Distributor|
|SA||$8,074||SA Power Networks|
|QLD (South East)||$5,492||Energex|
These numbers are a guide only and do not reflect actual costs for a particular business. Estimates in this table are calculated for a Small to Medium Enterprise using 20,000 kWh annually, billed at a single rate with conditional discounts applied. Data and rate information is drawn from the SME Retail Tariff Tracker Project report from June 2019.
According to the Australian Energy Regulator, the default market offer is:
Intended to be a service which all retailers in a non-price regulated distribution zone are obliged to offer customers that do not otherwise take up a market offer for the provision of electricity retail services
This can be used as a basic reference point for how much you are paying for energy.
|State||Business default market offers (Usage: 20,000 kWh p.a.)||Residential default market offers (usage varies based on state)||Distributor|
(Based on Ausgrid network)
Usage: 3,900 kWh p.a.
(Based on Energex network)
Usage: 4,600 kWh p.a.
(Based on SA Power Networks)
Usage: 4,000 kWh p.a.
|SA Power Networks|
These numbers should be used as guides only and do not reflect actual offers. Estimates in this table are calculated for electricity usage billed at a single rate based on data from the AER's Default Market Offer Prices report from April 2019.
Business size also has a significant impact on you final cost. The table below can give you an idea of how much you'd expect to spend based on how many employees you have.
|Business size||Number of employees||Average cost|
|Non-employing businesses||Just the owner||$1,891|
|Micro businesses||1 - 4||$4,259|
|Small businesses||5 - 19||$8,268|
|Medium businesses||20 - 199||$22,411|
Source: 2019 Retail Energy Competition Review, Australian Energy Market CommissionBack to top
Using a professional broker let's you discuss the various plans and options. They can help talk you through the decision as well. The option to use a broker may be affected by the size of your business:
It may be easier to compare an energy plan for a small business by yourself, as they generally have similar energy requirements to a residential property. Most providers will let you get a quote on a small business energy plan, but you can also use a broker or consultant if your gas or electricity needs are more complex.
If your small business has multiple sites, you may also be eligible for a dedicated accounts manager.
For big businesses, there is more room for error in selecting your own energy set-up. While many energy providers will still offer specialised quotes for large companies, a broker may be better positioned to find you the best deal.
Depending on the size of the business, you may also be given a dedicated account manager.
There are a number of things to keep in mind when sourcing energy for your business.
- Discounts on market usage rates. This is the amount you are charged per unit of power. The discount may be a limited-time offer, so make sure to check the benefits duration and how this corresponds with your contract duration.
- Rates on electricity use. These rates vary depending on your provider and your plan. With a simple general supply plan, these costs are often average rates, ranging between 25 and 30 cents per kilowatt hour. For other tariffs, such as an on-peak/off-peak plan, you save money if you can shift your usage to weekends and evening energy usage. On-peak prices are higher than the general supply rates, over 30 cents/kWh, while off-peak ones are lower, around 20 cents/kWh.
- Sign-up discounts. Some plans offer discounts upon signing up. These may be flat credits that go towards your first bill or percentage discounts that reduce your bills for a limited period.
- Exit fees. These are generally higher for business customers than for residential ones. Also, business contracts are generally longer, meaning there is a longer period under which to be charged. Exit fees in the first year can be anywhere between $100-$200 and $50-$100 for the second year of the contract.
- Simplicity. Different energy providers place different emphases on simplicity. Some offer a wide range of subtly different packages to suit their customers, while others offer just one or two packages that are simple to understand and sign up to.
- Flexible payment options. There are many ways to pay your bills, and it often pays to have many options with your provider. Make sure they offer services such as BPAY, direct debit, mail etc.
- Customer service quality. Some companies may offer special discounts if you sign up for both gas and electricity services simultaneously.
- Duration of contract. Contracts can "lock you in" for anywhere between six months and two years. Leaving prematurely can mean paying an exit fee (see costs above).
- Accuracy of energy billing. When calculating your electricity usage, your provider can either estimate your usage, potentially overcharging your business, or actually measure it. It is worth investigating the technique employed by your retailer or package.
- Whether they're available in your area/state. Energy providers do not necessarily operate in all states and territories, and the choice of providers may be limited depending on where your business is located in the country. Use the map below to see the provider options for your region:
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This will depend on where in Australia your business is located, but in open energy markets, including NSW, Tasmania, the ACT and Victoria, you are free to switch from one plan or provider at any time. While the market is open in the Northern Territory and parts of WA, you may still only have the choice of one provider. You also have a choice of provider in South East Queensland, but for those in regional parts of the state, there is only one provider.
Depending on the nature of your plan, you may also be charged exit fees for ending your contract early, and these should be factored in to your decision when looking to switch.
Upon commencing a new energy contract, your previous one will end. It would be beneficial to notify your energy company of your moving date and take note of this to ensure you get billed appropriately for the partial payment period.
If you are relocating your business and would like to keep your previous provider, contact a representative from your energy supplier.Back to top
Businesses, as well as residential homes, can access a variety of environmentally friendly energy options. Given the sheer volume of energy used in a large business, establishing a greener energy-use scheme for your business has the potential to offset the equivalent amount of fossil fuels from dozens, if not hundreds, of homes.
GreenPower is a government-certified, environmentally responsible energy scheme that allows you to purchase "green electricity", which is produced from renewable sources, and fit it into the system. You can purchase different portions of your electricity usage to commit to green electricity (including 100% of it), but this power isn't directly used to power your home. Instead, it is fed into the system. The GreenPower program is comparable to the Oxfam Unwrapped program where you can purchase a goat for charity.Back to top
First and foremost, it is a good idea to give your provider a call. Who to contact should be clear from your energy bill. Most, if not all, energy bills have a box with points of contact. If they are unable to address your concerns, ask who is able.
If neither of these two groups can resolve your issue, the next step is to contact your state energy ombudsman. Ombudsmen are responsible for resolving a wide range of issues and will describe the correct course of action. When first contacting your ombudsman, you will need to get together some details: Who you are, who your supplier is, your details, the issue and your ideal resolution to that issue. When providing the latter two points, try and make it concise and logical. Keep every document or piece of evidence pertinent to the case and have this information on hand while dealing with the ombudsman.
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The bills for small businesses are almost identical to those of residential plans. However, bills for a big business have much more information. These bills breakdown where the costs for your bill come from and what your tariffs are going towards. There is information about tax and energy losses due to resistance in the system and information about how to compensate for price in other areas. There are often informative depictions of pollution, including the average state and national production of carbon emissions. We've broken down how to read your bill to help you interpret all the details.Back to top
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- Accumulation. This meter records your total electricity usage, with no information regarding time of use (e.g. peak vs off-peak). A retail employee must physically read these meters on a periodic basis.
- Interval. Interval meters measure your electricity usage at set intervals, such as every 30 minutes. This allows your retailer to charge you the appropriate amount based on time of use. The cost is usually cheaper for off-peak times and more expensive for peak times. These units must also be read manually.
- Smart. Where the previous two meters involve estimations on your usage, smart meters measure your actual usage. They also establish a wireless communication feed between your unit and your energy provider. This negates the need for a reader to come to your property to connect, disconnect or read your electricity engagement. Further, it can optimise "feed-in" processes where residents with solar panels direct excess electricity back into the grid. The resident can access and read the smart meter's information to find out how and when they can reduce their power consumption.
In summary, here are the most important things you can do to save on those power bills:
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- Look for discounts. Sign up discounts and discounts to your energy rates might make one provider better than another, at least for a certain length of time. Compare your current plan to others and see if it's time to switch.
- Get the right contract. Choose whether flat cost power or variable rates are better for how your business uses energy, and pick a contract with a fixed-term that's the right length for you.
- Check usage calculations. If your provider uses an estimate of energy use to calculate your bill, consider whether a different provider who uses your actual meter readings might lower your costs.
- Consider an energy audit. You can either conduct your own audit or hire an energy assessor if your business is large or complex. Essentially, this involves establishing a baseline of energy usage in your business and tracking changes to it as you make improvements.
- Use appliances efficiently. Make sure your air-conditioning isn't left on when nobody is around. Install automatic sensor lights that turn off when rooms aren't in use. Power down computers and unused equipment at the end of the day instead of leaving it on standby.
- Switch off computers, printers and faxes when you can. Many machines are left on causing large amounts of unnecessary drain.
- Install automatic light switches and fans for bathrooms and other rooms that don't need constant lighting/services.
- Move hot items from cool places and cool items from hot places. For example, don't place your fridge and oven next to each other and keep your heaters away from your windows.
- Close doors and don't bother to heat or cool unoccupied rooms.
- For more helpful tips, check out our energy-saving tricks.