Business electricity pricing can be confusing because the “rate” you see advertised is rarely the only number that matters. For many Australian businesses, the biggest cost drivers are actually the tariff structure, daily supply charge, demand charges (for some meters), and your usage profile, meaning when you use energy can be just as important as how much you use.
This guide explains what business electric rates usually include, what to look for when comparing offers, and the practical steps that can help you reduce costs without disrupting supply.
What are business electric rates?
Business electric rates are the charges your retailer applies to your electricity account under your contract. They typically include:
- Daily supply charge: a fixed charge per day to remain connected to the network
- Usage charges: cents per kilowatt hour (c/kWh) for energy consumed
- Time-based rates (on some tariffs): different rates for peak, shoulder and off-peak periods
- Demand charges (common for larger sites): a charge based on your highest recorded demand during a set interval window
- Metering and other pass-through charges: varies by meter type and contract
Because each business has a different load profile, the best rate is the one that produces the lowest total bill for your actual usage pattern, not necessarily the lowest single c/kWh figure.
What drives business electric rates in Australia?
Business electricity pricing is influenced by several inputs, many of which vary by state, distribution zone and market conditions:
- Network charges: regulated “poles and wires” costs that can vary significantly between distribution areas
- Wholesale electricity prices: the cost of electricity in the National Electricity Market, which can be volatile
- Retailer costs and margins: billing, customer service, risk and hedging costs
- Environmental scheme costs: renewable and emissions-related costs embedded in pricing
- Your meter type and data: interval data can enable more complex tariffs, including demand and time-of-use
If you operate multiple sites, small differences in distribution zones and tariff assignment can create large differences in effective rates across your portfolio.
Tariffs explained: how your plan structure changes your bill
In Australia, “tariff” usually refers to the pricing structure applied to your meter. Two businesses with the same annual usage can pay very different totals depending on tariff assignment and demand profile.
Supply charge and usage charge
Most business bills include a fixed daily supply charge plus a usage rate (c/kWh). A plan with a cheaper usage rate can still cost more overall if the supply charge is higher, especially for lower-consumption sites.
Flat rate vs time-of-use
Flat rate plans apply one usage rate at all times. Time-of-use (TOU) plans split usage into time bands, often:
- Peak: highest price, commonly weekday afternoons and early evenings
- Shoulder: mid-range price, typically daytime or late evening
- Off-peak: lowest price, often overnight
TOU can work well if your business can shift discretionary load (for example, charging equipment, running dishwashers, pre-cooling, or scheduling production) into shoulder or off-peak windows. If your operations are locked into peak periods, TOU may increase total cost.
Demand tariffs and demand charges
Some businesses, particularly those with interval meters and higher loads, are placed on demand tariffs. Demand charges are usually based on the highest kW demand recorded in a billing period, sometimes only during set “peak demand” windows.
Demand charges can materially change what “good rates” look like. A site can have a competitive c/kWh usage rate but still face bill shock if it experiences short demand spikes. Practical demand management actions can include staggering equipment start-up, optimising HVAC set points, and reducing simultaneous high-load processes.
For a deeper explanation, see our guide to demand charging mechanics: Understanding energy demand charges for business owners.
Common fees and clauses to check before you sign
When comparing business electricity offers, always review the full schedule of fees and contract clauses. Common items to check include:
- Late payment fees and payment method surcharges
- Establishment or connection fees (less common, but can apply in some cases)
- Early termination or exit fees
- Automatic rollover clauses when a contract ends
- Price change clauses, including pass-through of network, metering or environmental costs
- Billing structure, including consolidated billing for multi-site accounts
If you are comparing offers internally, it can help to model your last 12 months of usage against each offer rather than relying on headline discounts.
How to compare business electric rates on a like-for-like basis
To compare offers properly, you need to compare total cost, not just a single rate. A simple process is:
- Collect recent bills, ideally 12 months, plus your contract end date.
- Identify your tariff and meter type (flat rate, TOU, demand) and note peak and off-peak splits if applicable.
- Check your demand profile if demand charges apply, including the maximum demand and the charge window definition.
- Compare supply charges, usage rates and demand charges together, including any bill credits and all fees.
- Confirm the contract terms, including exit fees and price review clauses.
If you want a broader walkthrough of how commercial pricing components fit together, see Compare commercial energy prices.
Can you have different suppliers for electricity and gas?
Yes. Many Australian businesses choose separate retailers for electricity and gas. A dual-fuel bundle is not automatically cheaper, and the best outcome often depends on how each retailer prices your specific site, meter and usage profile.
If you want to review both fuels together, you can also compare combined options here: Gas and electricity quotes.
Practical ways to reduce your business electricity costs
Once your tariff and contract are competitive, the next step is operational savings. Practical actions that commonly help include:
- Shift discretionary load off-peak if you are on TOU
- Reduce demand spikes if demand charges apply, by staggering start-up and avoiding concurrent high-load events
- Optimise HVAC, including scheduling and set points
- Upgrade lighting to LEDs and add controls such as timers and sensors
- Monitor usage to identify after-hours waste
If your operations are heavily time-based, you may find it useful to understand typical peak windows and how TOU pricing works in practice: When are electricity peak hours? Tips to reduce costs.
How Zembl helps businesses find competitive electricity pricing
Zembl helps Australian businesses compare offers from a panel of retailers and make sense of tariffs, demand charges and contract terms. The process is designed to be simple:
- We review a recent bill and your site details
- We compare suitable options based on your usage profile and goals
- If you choose to proceed, we handle the paperwork and switching process
To learn more about how commercial electricity costs are structured and what typically influences pricing, you can also visit: Business electricity.
Frequently asked questions
Are business electric rates the same as residential rates?
No. Business plans often have different tariff structures and can include demand charges or TOU pricing. They may be cheaper per kWh in some cases, but they can also be more complex.
How often should I review my business electricity pricing?
At least annually, and always 60 to 90 days before your contract end date. Market conditions, network charges and retailer pricing can change, and contracts may roll over if not renegotiated.
Will switching electricity providers interrupt my supply?
No. In most cases, switching retailers does not interrupt electricity supply because the physical network stays the same. The change is administrative and billing-related.
What information do I need to get a comparison?
A recent bill is usually enough to start. It contains key identifiers such as your meter details and the tariff structure, plus your usage and charges.
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