Finding a Suitable Electricity Plan for Your Small Business

What’s the difference between a Business Electricity Plan and a Residential Electricity Plan? 

Electricity is electricity, whether it’s for a household or an internationally famous business. Electricity Plans, however, might come out a little different in the wash. For starters, Business Electricity Plans are likely to be designed with greater usage needs in mind.  

You might find that Electricity Retailers that offer Residential Electricity Plans also have business options available, at least for small businesses. These could be market offers or standing offers, like the Default Market Offer or Victorian Default Offer, giving you a bit more choice in what you pay. FYI: market offers tend to be more competitive with Electricity Retailers being able to set their own prices. Standing offers may not be the cheapest around but come with a bit of stability as the prices are set by regulating authorities and only change once a year. 

In the electricity world, your gross profit or total employee headcount isn’t what makes you a big business. It’s your usage. Each state and territory have their own threshold a business needs to come in at or under to be classed as a small business. Anything more and you’re one of the big fish.  

As a large business, you probably won’t be able to pick a plan and a retailer. Instead, you might need to go to the retailer directly to negotiate a plan and pricing. 

How much do Small Business Electricity Plans cost? 

No two businesses are going to have the same electricity costs because they’re going to have unique operations. Sure, a café might use plenty of milk but they’re probably going to have a different bill to a dairy farm.  

And usage is just one piece of the puzzle. The plan itself may come with different rates to other options on the market. It might not even take usage into account with set charges for each billing period, whether you use that much electricity or not. 

We know that’s probably not the answer you wanted to get, so we do have some state-based averages to help give you a sense of what your bill could look like. These are based off figures from October 2023. 

Can I choose my business’ Electricity Retailer? 

This is when you’ll need to know if you qualify as a small business in the eyes of your state’s electricity threshold. If you’re a small or large business operating anywhere except regional QLD, NT and WA, congratulations, you will likely be able to pick your Electricity Retailer. Everyone else, unfortunately, probably won’t be able to pick or may have fewer options. Plus, remember that larger businesses (those above your state’s electricity usage threshold) will need to get in touch with the retailer and negotiate rather than just picking a plan out online or over the phone. 

Are there green electricity options for small businesses? 

There’s no need to be green with envy over other businesses’ green electricity — chances are, you can get in on renewable action too. 

For starters, you could have a solar power system installed. This way you could generate green electricity when the sun is shining and use grid power after dark or on cloudy days. 

If a solar system isn’t an option for you right now, your Electricity Retailer may have alternatives available. You could opt for a GreenPower accredited plan that helps put renewable electricity, like solar and wind, into the grid while supporting further sustainable energy projects around the country. On the other hand, you may want to try a carbon neutral plan. This is when your electricity may still be generated through means that release carbon emissions, but your retailer then provides economic support to carbon reduction projects, helping to balance out the emissions created. 

How do I choose an Electricity Plan for my small business? 

Understand your needs and usage 

No one knows your business like you but it’s time to expand that wealth of knowledge to include your electricity needs and usage. Otherwise, it can be hard to tell if an Electricity Plan is a winner or not. 

To start, you could flick through any previous electricity bills you have for your business. Is your electricity use roughly consistent?  

If you don’t have old bills to get acquainted with, you could also look at having an energy assessment done. With some professional assistance, you could learn which parts of your business are using the most electricity and even how you could cut things back.   

Whichever route you choose, you may want to take some time to think about the unique requirements of your business. Take a seat, grab a coffee and see if you can answer questions like do you have electricity-hungry appliances that always need to be running or when you’re using electricity the most throughout the day.  

Explore what’s available 

If you’ve ever spent more time trying to pick something to watch on Netflix than actually watching a show, you’ll know that sometimes choice can be tricky. While you probably won’t have a seemingly endless list of Electricity Plans to choose from, you may need to go in with a game plan. Using your newfound needs and usage knowledge could help set some parameters for what you do and don’t want. As part of this, you may want to consider whether a standing offer or market offer is right for you.  

As we said above, standing offers are the ones that come with regulated pricing. They probably won’t be the cheapest around but could give you greater stability in pricing if you’re more of a ‘set and forget’ person. Market offers tend to be more competitive with deals and discounts. While some deals may not speak to you, others could be right up your alley.  

Consider terms and tariffs 

Once you start to pull together a shortlist of potential Electricity Plans, it might be time to zoom in on the details, specifically the terms and tariffs attached. 

The terms of your Electricity Plan could include if there’s any flexibility in what you pay. For instance, you may be charged a set fee each month for an allocated amount of electricity, even if you don’t actually use that entire amount in the month. Alternatively, you might be looking for flexibility in how long the contract lasts or if you can jump ship whenever you please.  

Tariffs play their part in determining how much you pay by setting a rate for the electricity used. Flat tariffs, for instance, stay the same no matter how much electricity you use or when you use it. On the flip side, time-of-use tariffs can have different rates based on when you use electricity with peak times being more expensive. 

If this is all leaving your head spinning and your phone’s calculator exhausted, you may want to work with an energy broker. They can help you with terms and conditions of supply, particularly if you’re hoping to negotiate your own. As a rule of thumb, if you’re spending more than $50,000 annually on your business’ energy costs, an energy broker could be a wise investment.¹Victoria State Government – Tips for managing business energy costs 

How can I reduce my small business’ electricity bill? 

Upgrade to energy-efficient measures and technology 

Energy efficiency is one way you may be able to shrink your business’ electricity bill. This can include installing new measures or appliances in your business, like double-glazing windows to keep warmth in or tinting them to keep the heat out, or adding a complete solar system to your building to generate some of your own electricity. 

Big and small upgrades could also help you save. For instance, swapping to more efficient and fewer fridges and freezers helped one Victorian business save almost $1,000 in a year.²Victoria State Government – Nillumbik Shire Council helps businesses find energy savings But even making the move from traditional incandescent or halogen lighting to energy-efficient LEDs could help chip away at your regular bill. 

Maintain appliances and complete regular energy-efficiency checks 

Improvements in technology may mean that newer appliances are more efficient than the ones your business uses. However, it’s not sustainable for you or the environment to be replacing them all the time. Instead, regular maintenance can help keep your appliances working as efficiently as they can until it’s time to say goodbye. 

For instance, something as simple as replacing the seals on their fridges saved one business owner in Victoria more than $1,000 annually.³As above  Even keeping a refrigerated cabinet clean could help avoid it using up to 10% more energy.⁴Victoria State Government – Tips for managing business energy costs 

As part of your maintenance routines, it may be a good idea to schedule in a regular energy assessment. This could help you pinpoint problems before they become a huge bill increase. There can also be opportunities to find new ways to save money, like training staff in energy-efficient practices or optimising any generated solar electricity.  

Compare Electricity Plans 

A loyal friend (canine or otherwise) can be worth their weight in gold, but it may not pay to stay unwaveringly loyal to an Electricity Plan or Provider. Your business’ electricity usage may change, meaning a plan doesn’t quite fit anymore. Alternatively, the plan may change with increases to your bill or the ending of discounts and deals that really made your day. Unlike marriage, there’s no hurt feelings if you have a look at what’s around and decide it’s time for a change.