Energy is a major operating cost for many Australian businesses, whether you run a single retail store or manage a large commercial or industrial (C&I) portfolio. Wholesale price volatility, network charges and changing regulations across the National Electricity Market (NEM) all flow through to your electricity and gas bills. That is why regularly reviewing your contract and exploring the wider market can be one of the fastest ways to protect your margins.
In Australia, small and medium enterprises often pay more per kilowatt hour than large users. Many are still on legacy tariffs or default market offers that have not been reviewed for years. Others are on short term discount plans that quietly revert to higher base rates once the benefit period ends. Without a structured way to review the market, it is easy to end up paying significantly more than competitors in the same region.
How commercial energy pricing works
Understanding what sits behind a business energy bill makes it easier to compare offers on a like for like basis.
Key components of a business electricity bill
Most electricity bills for businesses in the NEM are made up of:
- Usage charges measured in kilowatt hours for the electricity you consume.
- Demand charges for larger users, based on the highest amount of power drawn over a set period.
- Network charges that recover the cost of poles, wires and other infrastructure.
- Environmental and market fees such as renewable schemes and market operator fees.
- Retail margins and fees added by the energy retailer.
For gas, the structure is similar, with usage, fixed supply charges and network costs all bundled into your total spend.
Tariff types commonly seen in Australia
Businesses across NSW, Victoria, Queensland, South Australia, Tasmania and the ACT may see several tariff structures:
- Single rate tariffs, where the same c/kWh rate applies at all times.
- Time of use tariffs, with different rates for peak, shoulder and off peak periods.
- Demand tariffs, where a portion of your bill is linked to your maximum demand.
The right tariff type for your business depends on when and how you use energy. For example, a hospitality venue that trades mostly in the evening might benefit from a structure that rewards off peak usage, while a manufacturer with machinery running during the day needs to manage peak demand.
Steps to evaluate your current commercial energy deal
Before looking at new quotes, it pays to understand how your current agreement performs.
1. Gather recent bills and contract details
Collect at least 12 months of bills if possible. Note your:
- Total annual consumption in kWh or MJ.
- Average demand levels if you are on a demand tariff.
- Current c/kWh rates for peak, shoulder and off peak.
- Daily supply charges.
- Contract start and end dates.
- Any conditional discounts or bill credits.
This information lets you benchmark new offers accurately instead of focusing on headline discounts alone.
2. Check whether you are on a default or market offer
If you have never negotiated with a retailer or have not switched in recent years, you may be on a default type contract. These offers are regulated and provide certain protections, but they are rarely the most cost effective option for businesses that use moderate to high amounts of energy.
Market offers, on the other hand, are designed by retailers and can include sharper rates and incentives. The trade off is that terms vary widely between providers, so it is important to read the fine print.
3. Analyse when and how you use electricity and gas
Usage patterns strongly influence what type of tariff will suit you best. Some questions to consider include:
- Are your trading hours mostly during the day, evening or overnight?
- Do you run large pieces of equipment that create high demand spikes?
- Is usage fairly consistent year round, or are there strong seasonal peaks?
- Can you shift any flexible processes to cheaper time periods?
Many businesses find that small operational changes, like staggering equipment start up times or shifting some production into shoulder periods, can reduce maximum demand and overall spend.
How to compare commercial electricity and gas offers
Once you have a clear picture of your current position, you can start to look at competing offers.
1. Focus on effective rate, not just discounts
Headline discounts can be misleading. A lower percentage off a higher base rate might still leave you paying more overall. Instead, calculate the effective rate by applying the proposed tariff, supply charge and any fees to your historical usage profile.
Comparison exercises typically work best when you model your last 12 months of usage against each shortlisted offer. This approach shows the real dollar impact of seasonal variations, demand charges and time of use structures.
2. Compare contract terms and flexibility
Beyond price, there are several commercial considerations:
- Contract length and whether it matches your business plans.
- Exit fees or penalties for early termination.
- Price review clauses, including how often rates can change.
- Pass through of network and market costs, particularly for large market contracts.
- Billing and reporting options, such as consolidated billing for multi site groups.
For many organisations, having predictable, transparent costs and strong account management is just as important as securing the lowest headline rate.
3. Use specialist support to run tenders
Running a full tender across multiple retailers can be time consuming, especially for C&I portfolios. Specialist energy consultants and brokers can help by:
- Accessing pre negotiated rates from a panel of retailers.
- Structuring reverse auctions to drive competition.
- Testing different contract start dates and durations.
- Advising on risk management between fixed and flexible pricing.
Working with a specialist also means you have ongoing support when it comes to bill validation, tariff reviews and renewals.
Australian regulations and government resources to be aware of
Energy is heavily regulated in Australia, and rules differ between states and territories. Being aware of some key frameworks will help you interpret offers and your rights as a customer.
- The Australian Energy Regulator (AER) oversees retail energy markets in most jurisdictions and publishes guidance for small business customers.
- The National Energy Customer Framework (NECF) sets rules around billing, hardship, disconnections and dispute resolution for eligible customers in NSW, ACT, Queensland, South Australia and Tasmania.
- Victoria operates under its own framework, with the Essential Services Commission regulating standards and publishing comparison information.
Government comparison tools, such as Energy Made Easy and state based resources, can give a useful baseline view of available plans for smaller business customers. However, they may not always capture bespoke commercial contracts or negotiated C&I deals that are available through energy consultants.
Opportunities to reduce commercial energy usage and demand
Securing a sharper tariff is only one piece of the puzzle. Reducing the amount of energy you use and smoothing your demand profile can further lower costs.
Common efficiency initiatives for Australian businesses
- Lighting upgrades, such as moving to LED and installing sensors.
- Heating, ventilation and air conditioning optimisation, including regular maintenance and smart controls.
- Plant and equipment upgrades to higher efficiency models.
- Power factor correction for large sites to reduce network charges.
- Solar power and batteries to offset grid consumption.
For many organisations, a staged roadmap that starts with quick wins and progresses to capital projects over time can deliver strong returns without straining cash flow.
Using data to uncover savings
Larger users can benefit from metering and analytics that track interval data across multiple sites. Analysing this data often highlights issues such as equipment left running after hours, poor load scheduling or unnecessary demand spikes.
Energy intelligence services can convert this data into actionable insights and help quantify the impact of different efficiency projects before you commit capital.
How Zembl supports commercial and industrial customers
Specialist support can simplify every stage of the process, from initial comparison through to long term optimisation.
Zembl works with Australian businesses that spend from a few thousand dollars a year on energy through to large C&I users with complex portfolios. Services include:
- Comparing offers from a trusted panel of retailers.
- Running tenders to secure competitive contracts for larger loads.
- Providing multi site advice and consolidated billing support.
- Identifying energy efficiency and renewable opportunities in partnership with specialist providers.
By combining market knowledge, buying power and analytics, our team helps organisations know more about their energy, use less where possible and ultimately pay less.
If you are a smaller business looking for a quick way to check whether your current plan is still competitive, you can start with a simple business energy comparison.
Larger users looking to better understand procurement options, portfolio strategy and efficiency opportunities can explore Zembl's dedicated commercial energy services.
You can also explore how switching between business energy plans might improve price certainty or unlock better tariff structures.
If your priority is to lower spend without sacrificing reliability, our guide to cheap business energy suppliers in Australia explains how different retailers structure their offers and what to look for in the fine print.
For businesses focused on bill shock and confusing invoices, it may help to revisit how you compare business electricity charges so you can understand all the cost components, not just the usage rate.
If you have not reviewed your energy agreement in the last year, now is a good time to gather your latest bills and explore your options. Whether you are a café, manufacturer, warehouse operator or professional services firm, taking a structured approach to pricing, contracts and efficiency can help you manage risk in a changing energy market.
Specialist support, clear data and a better understanding of how tariffs work can all contribute to lower, more predictable operating costs over the long term.
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