Business electricity rate: how to compare prices and cut costs

Getting the right business electricity rate can materially reduce operating costs, but in Australia the “rate” on the front page of an offer rarely tells the full story. For many businesses, total cost is driven by a mix of usage charges, daily supply charges, network tariffs, and for larger sites, demand charges and power factor considerations.

This guide explains what typically drives pricing, what to check on your bill, and how to compare offers properly so you can make a confident decision for your site or portfolio.

What does “business electricity rate” mean in Australia?

In practice, a business electricity rate can refer to one or more of these line items:

Usage charges: cents per kWh, sometimes split into peak, shoulder and off-peak periods.
Daily supply charge: cents per day for being connected to the grid.
Demand charges: dollars per kW, based on your highest demand in a set interval during a billing period, common for larger sites and some network tariffs.
Other components: metering fees, environmental scheme charges, and sometimes pass-through charges depending on contract structure.

Because pricing structures differ by retailer, meter type, and distribution area, two offers with the same cents per kWh can still produce very different total bills.

Key factors that influence your electricity pricing

Your location and network (poles and wires) charges

Network tariffs are set by the local distributor and vary by distribution zone. This is one reason pricing can differ significantly between states, regions, and even neighbouring suburbs. Your retailer passes these network costs through in the rates you pay.

Your meter type and available tariff structures

Your meter determines what tariff structures you can access, for example:

Single rate (flat usage rate)
Time-of-use (different rates by time window)
Demand-based tariffs (charges tied to peak demand)

If you have interval metering, you generally have more options, but it also means demand and time-of-use pricing can have a bigger impact, both positive and negative, depending on your load profile.

How and when you use power (your load profile)

Retailers and networks price risk. Businesses with sharp peaks (for example, multiple high-load assets starting at once) can be more expensive to serve than businesses with smoother consumption. Shifting or staggering loads can reduce demand-related costs and may open up better tariff fit.

Contract structure and risk settings

Some offers are built for stability, others for flexibility. The right option depends on your risk appetite and budgeting needs.

Fixed vs variable pricing: which is better for businesses?

There is no single best option, but these are the usual trade-offs:

Fixed pricing

Pros: easier budgeting, less exposure to short-term market movements.
Cons: you may not benefit if market prices fall, contract terms and exit fees can apply.

Variable pricing

Pros: can benefit if pricing conditions improve, often more flexible.
Cons: exposure to price volatility, harder to forecast costs month to month.

If you are not sure which structure fits, a bill and interval-data review usually makes the decision clearer.

How to compare business electricity rates properly

1) Start with a recent bill and identify the key fields

Have a recent invoice handy and note:

NMI (National Meter Identifier) for electricity sites in the National Electricity Market
billing period dates and total kWh
daily supply charge
usage rate structure (single, time-of-use)
any demand charge line items (kW and $/kW)

2) Look beyond cents per kWh

Common comparison mistakes include focusing only on the headline usage rate or a discount percentage. Instead, compare:

the effective total cost for your actual consumption and time-of-use pattern
the supply charge, especially for low-consumption sites
demand charges and how they are calculated, where applicable
any pass-through clauses, indexation, or other variable components

3) Check demand charges if you are on a demand tariff

Demand charges can add thousands per year for some businesses. They are typically based on your highest demand in a 15-minute or 30-minute window during a set period, depending on your network rules. If your site has short peaks, reducing or staggering high-load equipment can make a meaningful difference.

For a deeper explanation and practical ways to manage this, see Zembl’s guide: understanding energy demand charges for business owners.

4) Review contract terms and fee clauses

Before switching, confirm:

contract length and renewal conditions
exit fees and notice periods
what happens after the benefit period ends, if an incentive applies
fees for late payment, paper billing, or special metering where relevant

5) Consider operational fit, not just price

Cheaper is not always better if the tariff structure does not match your operating hours. For example, a business that runs refrigeration or equipment overnight may benefit from off-peak periods, while a business with high late-afternoon usage may be more exposed on some time-of-use structures.

What to look for in a business electricity provider

When assessing options, these are the usual decision points for Australian businesses:

Tariff suitability: does the plan match your load profile and operating hours?
Pricing clarity: are charges clearly stated and easy to audit?
Account management: is support responsive, especially for multi-site portfolios?
Billing and data access: can you access interval data or detailed reporting where needed?
Flexibility: can you add sites, change billing structures, or adjust terms as your business grows?

Ways to reduce your total electricity cost

Reduce peak demand

If you pay demand charges, reducing peaks can be one of the fastest paths to savings. Options may include staggering start-up of equipment, adjusting HVAC schedules, or using automation to smooth load.

Shift usage to lower-cost periods

If you are on time-of-use pricing, shifting non-essential loads to shoulder or off-peak times can reduce cost without reducing output.

Review your tariff and plan regularly

Market conditions, network tariffs, and your business operations change over time. Regular reviews help you avoid rolling on to uncompetitive rates when a contract ends.

How Zembl helps you secure a competitive deal

Zembl helps Australian businesses compare options from a panel of reputable retailers and find a plan that fits how they actually use energy. Depending on your size and complexity, support can include:

bill review and rate comparison
tariff and demand analysis using interval data where available
recommendations presented in plain language
switching support and paperwork handled end-to-end

If you want to explore related services, these pages may help:

Get a free business energy review

If you would like a clear view of whether your current offer is still competitive, Zembl can review a recent bill and provide recommendations tailored to your site and usage profile.

Share your details and a recent invoice, then we will come back with options and handle the switch if you decide to proceed.

Business electricity rate: how to compare prices and cut costs | Zembl