Rising operating costs across Australia mean every dollar on your energy bill matters. Many organisations stay on old tariffs or default offers, even though market prices and network charges have moved significantly. Taking the time to understand how business electricity charges work, then comparing offers properly, can unlock meaningful savings without disrupting day to day operations.
What are business electricity charges made up of
When you receive an electricity bill for your business, you are not just paying for kilowatt hours of energy. A typical Australian business bill includes a mix of fixed and variable charges that are set by retailers, network businesses, and regulators.
Usage charges
Usage charges are based on how much electricity your site uses over the billing period. They are usually expressed in cents per kilowatt hour (c/kWh). Depending on your tariff, you may see:
- A single rate for all consumption
- Different rates for peak, shoulder, and off peak periods
- Separate controlled load rates for specific equipment such as hot water systems
In most states that participate in the National Electricity Market, time of use tariffs are increasingly common for business customers. This means the price you pay per kWh can vary significantly depending on when you use power, especially on weekdays during late afternoon and early evening peaks.
Daily supply charges
Supply charges are fixed amounts you pay for being connected to the electricity network. They are typically listed as a daily fee in cents per day. Even if your usage is low in a given month, the supply charge still applies. For small businesses, these fees can make up a sizeable share of the total bill, especially if you have multiple sites with modest consumption.
Demand charges for larger sites
Medium and large business customers are often billed for demand in addition to usage and supply charges. Demand charges reflect the highest level of power drawn over a set interval, usually measured in kilowatts (kW) or kilovolt amperes (kVA) over 15 or 30 minutes.
Network businesses use demand charges to recover the cost of building and maintaining infrastructure that must be sized for peak loads, not average usage. If your business equipment all switches on at once, or you have high load machinery that runs during peak times, demand charges can dominate your electricity spend.
Network, metering, and environmental costs
Behind the line items on your bill sit a series of regulated and market based costs, including:
- Network tariffs that cover the use of poles, wires, and substations
- Metering fees associated with your basic or smart meter
- Wholesale energy costs that fluctuate with supply and demand
- Environmental scheme costs, such as renewable energy obligations and state based programs
Retailers bundle these into the tariffs they offer. While you cannot control every component, you can choose tariffs and contract structures that better match how your organisation uses energy.
How business electricity charges work across Australia
Business electricity pricing in Australia is shaped by which state or territory you operate in, whether your site is in a contestable retail market, and your annual consumption. Most businesses in New South Wales, Victoria, Queensland, South Australia, and the ACT can choose from multiple retailers and a range of market offers. In parts of Western Australia, the Northern Territory, and regional areas, options can be more limited.
Within each state, charges vary by distribution network. Two similar businesses a few suburbs apart can face different network tariffs and demand structures, even if their consumption looks alike. This is one reason generic headline rates from advertising or comparison tables often do not reflect the actual cost your organisation would pay.
Regulators such as the Australian Energy Regulator and state based bodies also set or oversee default offers and network revenues. Default offers provide a safety net, but they are not always the most competitive option in the market for business customers.
Why regular reviews of business electricity charges matter
Many organisations sign a contract, then let it roll over without a detailed check. Over time, this can lead to:
- Being shifted to standing or default offers once an initial term expires
- Missing network or metering changes that could justify a tariff review
- Staying on discounts that look attractive but apply only to a portion of your bill
- Overpaying because usage patterns have changed since the contract was first signed
A structured review of your invoices at least once a year can highlight whether your current business electricity charges still represent fair value compared with the wider market.
How to compare business electricity charges effectively
Simply lining up two cents per kWh numbers is rarely enough to make a good decision. When you compare offers, it pays to look at the full picture.
Step 1: Gather accurate usage data
Start with recent bills for each site. Check:
- Total annual consumption in kWh
- Demand data if applicable, including the highest kW or kVA readings
- Current tariff type, such as single rate or time of use
- Any additional charges or fees, including metering and late payment fees
Having this detail helps you understand how new offers will apply in practice, rather than relying on generic estimates.
Step 2: Compare all cost components
When reviewing market offers from retailers, make sure you look beyond the discount headline. Compare:
- Daily supply charges
- Peak, shoulder, and off peak usage rates that match your operating hours
- Demand charges and how they are calculated
- Contract length and any early termination fees
- How and where discounts are applied
For a deeper explanation of how different cost components can impact your overall spend, you can also read Zembl's dedicated content on business electricity pricing and plan structures, including our pages on business electricity price comparison and business electricity plans.
Step 3: Consider your tariff structure
The right tariff structure can make a large difference to your annual costs. Businesses that operate mainly during standard office hours may be better suited to one type of tariff, while those running equipment overnight or on weekends may benefit from another.
Common structures include:
- Single rate tariffs where usage is charged at the same rate all day
- Time of use tariffs where rates change by time of day and day of week
- Demand based tariffs that add a charge for your highest interval of usage
A Zembl Energy Expert can help you understand how these options line up with your load profile, and whether a change in tariff could reduce your business electricity charges without altering core operations.
Step 4: Check service and contract flexibility
Price is important, but service quality also matters. When assessing retailers, consider:
- Whether they offer Australian based support for business customers
- Billing formats and reporting, especially if you manage multiple sites
- Options for green power, carbon offsetting, or renewable energy solutions
- Flexibility to adjust sites or accounts during the contract term
For small businesses, our small business electricity guide covers additional tips on choosing providers and managing bills.
Common mistakes businesses make when comparing electricity charges
Based on market experience, there are several traps that can lead to higher costs over the life of a contract.
Focusing only on the usage rate
Two offers with similar usage rates can still lead to very different bills if one has a much higher daily supply charge, or if demand and metering fees are structured differently. Always review the full tariff summary, not just the usage line.
Overlooking demand and power factor
For larger customers, ignoring demand charges and power factor penalties can be costly. If your maximum demand is high relative to your average usage, or if your power factor is poor, specialised support can help you improve the situation and reduce charges over time.
Staying on default offers for too long
Default or standing offers provide a back up, but are not designed to be long term solutions for cost conscious businesses. Proactive tendering or comparison through a specialist service often uncovers more competitive pricing.
Not reviewing contracts before they renew
Automatic rollovers can lock in new rates that may not be in line with market conditions at the time. Mark contract expiry dates in your calendar and start your review process several months before they occur.
How Zembl helps you compare business electricity charges
Zembl is an Australian based energy comparison and procurement service that works with a panel of leading business electricity retailers. The goal is to make it easier for organisations to review their current position, compare alternatives, and switch where it makes sense, without having to become energy market experts.
Free bill review
Our process usually starts with a free review of your recent electricity bills. We look at your current business electricity charges, including tariffs, discounts, and demand structures, and identify opportunities for potential savings.
Market comparison and analysis
Using advanced analytical tools and up to date market data, our Energy Experts compare your existing offer against a range of options from our retailer panel. We take into account your industry, load profile, location, and risk appetite when recommending alternatives.
Clear recommendations
You will receive clear, easy to understand explanations of each option, including estimated annual costs based on your real usage. For additional context, you can also explore related Zembl resources such as electricity for businesses and compare electricity for business.
End to end switching support
If you decide to move ahead with a new offer, Zembl handles the paperwork and communication with your existing and new retailer. This helps minimise disruption and ensures the transition is as smooth as possible for your operations and finance teams.
Support for larger and multi site organisations
For larger organisations, our Energy Brokers can run formal procurement processes, interpret complex network tariffs, and support ongoing bill validation and energy reporting. We can also provide insights on multisite portfolios, helping you identify which locations offer the greatest opportunity for savings or tariff optimisation.
Getting started
Australian businesses do not need to navigate electricity contracts alone. By understanding how business electricity charges work and using specialist support to compare offers, you can reduce costs, improve budgeting certainty, and free up resources for growth.
If you are ready to review your current arrangements, you can request a free energy review from Zembl and speak with an Energy Expert about the options available for your organisation.
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