Electricity small business guide to lower bills and better plans | Zembl

How electricity works for small business customers in Australia

Running a small business means watching every dollar. Energy is one of those bills that keeps turning up, month after month, yet many owners are not sure how pricing works or whether they are on the right deal.

This guide explains how electricity works for small business customers in Australia, how prices are set, and what you can do to bring costs down without disrupting your operations.

Who counts as an electricity small business customer

Retailers and governments use the term electricity small business customer for businesses that fall under certain usage and connection thresholds. The exact definition can vary by state and territory and by network, but it usually depends on:

• Your annual electricity consumption in kWh
• Whether your site is metered as business rather than residential
• The size of your connection (for example, low-voltage small business vs large commercial)

Practical signs you are treated as a small business electricity customer include:

• Your bill shows a business tariff or SME tariff
• You are on a small business standing offer or market offer, not a large market contract
• You are eligible for small business rebates or credits through government programs

If you are unsure which category you are in, a Zembl Energy Expert can check this during a free bill review and confirm whether you are being billed correctly for your size.

Key components of a small business electricity bill

Most small business electricity bills across the National Electricity Market (NSW, ACT, QLD, SA, VIC and Tasmania) share the same building blocks.

Common line items include:

• Usage charges in cents per kWh, sometimes with separate peak, shoulder and off‑peak rates
• Daily supply charges in cents per day for being connected to the grid
• Network and distribution charges that are bundled into your tariff and cover poles, wires and substations
• Market and environmental charges linked to renewable energy schemes and wholesale market costs
• Metering charges for the installation and reading of your meter, particularly smart meters

Understanding these parts makes it easier to compare offers and know where savings are possible.

Default Market Offer and Victorian Default Offer

Two key safety nets apply to many electricity small business customers:

• Default Market Offer (DMO): Applies to small businesses and households in NSW, SA and south‑east Queensland. Set annually by the Australian Energy Regulator, it caps the prices retailers can charge small customers on standing offers and acts as a reference price for comparing plans.
• Victorian Default Offer (VDO): Works in a similar way for small customers in Victoria and is set each year by the Essential Services Commission.

If you have never actively chosen a market offer or you rolled off a discount a while ago, you may now be on a default offer. While this is designed as a fair, reasonable tariff, it is not always the cheapest option available.

Market offers for small business

Most electricity small business customers can choose a market offer. These are plans designed by retailers that must meet minimum consumer protections under the National Energy Retail Law or state based rules.

Market offers often include:

• Introductory discounts or bill credits
• Fixed or variable usage rates
• Contract terms of 12 to 36 months, sometimes with benefit periods that expire earlier
• Different tariff structures, such as single rate or time of use

Comparing market offers can be time consuming. Zembl’s Energy Experts compare plans from a panel of leading Australian retailers and handle the switching process so you can focus on running your business instead.

How electricity pricing affects small business budgets

Electricity prices for small business are shaped by several factors, some of which you control and some you do not.

Factors that influence small business electricity prices

Key drivers include:

• Wholesale costs: What retailers pay for electricity in the wholesale market. These can move quickly when supply is tight or demand is high.
• Network costs: Around 30 to 40 percent of a typical bill goes to the companies that build and maintain the grid.
• Environmental scheme costs: Programs like renewable energy certificates and state based schemes add a small component to each kWh.
• Retail costs and margins: Billing systems, customer service, metering and a profit margin for the retailer.
• Your tariff and usage profile: When and how you use power, plus the tariff type you are on, can make your effective rate higher or lower.

You cannot control wholesale markets or network charges, however you can choose plans and behaviours that reduce your total spend.

Fixed versus variable rate plans for small business

Most retailers offer a choice between fixed and variable rate plans for small customers.

• Fixed rate plans lock in your usage charges for a set period, so you pay the same c/kWh throughout the contract.
• Variable rate plans allow the retailer to change rates, usually with written notice. Prices can move up or down in response to market conditions or regulatory settings.

Smaller businesses often prefer fixed rate offers because they make budgeting easier. However, if wholesale prices fall, a variable rate plan may deliver lower costs, at least for a time.

Zembl can explain how each option works for your specific usage pattern and location and can help you compare fixed and variable offers from multiple retailers.

Standing offers versus negotiated deals

If you are on a standing offer, you are probably paying a higher rate than necessary. Standing offers are there as a safety net. They are usually less competitive than actively negotiated market offers.

By sending Zembl a recent bill, you can find out in a few minutes whether there is a more competitive deal available from our panel of retailers. If we find a saving and you approve it, we can arrange the switch on your behalf.

Government support and bill relief for electricity small business customers

Australian governments have introduced a range of support measures for eligible small businesses, particularly during periods of high prices.

Energy Bill Relief Fund and other bill credits

Recent rounds of the Energy Bill Relief Fund have included bill credits for eligible electricity small business customers. Details change from year to year but usually involve:

• Automatic bill credits applied through your retailer
• Eligibility criteria based on being an electricity small business customer under your state or territory rules
• A fixed total amount per ABN or connection, split across multiple bills

You do not normally need to apply for these credits, however you should check that they appear on your bill and that your account is correctly classified as a small business site.

States and territories may also offer targeted schemes for small businesses in hardship or affected by specific events. It is worth checking your state government energy site for current rebates or grants.

State based definitions of electricity small business

Each state and territory publishes detailed criteria for what counts as an electricity small business customer. Common elements include:

• Maximum annual consumption thresholds, for example under 100 MWh per year
• Connection type and whether the site is low voltage
• Whether the account is held in an ABN rather than a residential name

Being correctly classified matters because it can determine:

• Which protections under the National Energy Retail Law apply
• Whether you qualify for DMO or VDO reference pricing
• Eligibility for small business energy rebates or relief payments

If your usage has grown and you suspect you may have moved into large market territory, a Zembl Energy Expert can review your bills and advise on the best procurement strategy.

How to choose the right electricity plan for a small business

Choosing the right plan starts with understanding how your business uses energy.

Step 1: Review your recent electricity bills

Gather at least 12 months of electricity bills if possible. Look for:

• Total kWh used per month or quarter
• Any demand charges or capacity charges
• Your current tariff type, such as single rate or time of use
• When your current contract or benefit period expires

This gives you a baseline to work from and helps identify unusual spikes or seasonal patterns.

Step 2: Match tariffs to your operating hours

If your business operates mostly during the day, you may benefit from a plan with lower daytime or shoulder rates. If you run refrigeration, hospitality or manufacturing around the clock, a different tariff might suit you better.

Common options include:

• Single rate tariffs with the same price per kWh at all times
• Time of use tariffs with higher prices during peak periods and lower prices off peak
• Demand tariffs where part of your bill is based on your highest half hour of usage during a month

Selecting a tariff that matches your usage pattern can deliver meaningful savings without changing your operations.

Step 3: Look beyond headline discounts

Retailers may advertise large discounts or signup credits. Always check:

• The actual usage and supply rates in c/kWh and c/day
• Whether the discount applies to the whole bill or only the usage component
• How long the discount lasts and what happens when it ends
• Any exit fees or lock in periods

The cheapest looking deal upfront is not always the best value over the full contract term.

Step 4: Compare offers efficiently

Manually comparing offers from multiple retailers can take time away from running your business. Zembl’s Energy Experts specialise in business energy bill comparisons for Australian SMEs.

By sharing a recent electricity bill, you can get a clear view of potential savings and, if you choose to switch, we take care of the paperwork and notify your old retailer for you.

You can learn more about how this works on Zembl’s business energy page and dedicated business electricity plan pages.

Practical ways small businesses can reduce electricity use

Reducing usage can be just as powerful as securing a better rate.

Quick wins that suit most small businesses

Some straightforward changes that often deliver savings include:

• Switching to LED lighting and turning lights off in unused areas
• Using timers or sensors for signage and external lighting
• Servicing air conditioning and setting sensible temperatures
• Checking fridge and freezer seals in hospitality or food retail
• Turning off non essential equipment outside trading hours

These steps do not usually require major capital investment and can start to reduce your next bill.

Smarter scheduling and load management

If you are on a time of use or demand tariff, consider:

• Moving energy intensive tasks like baking, washing or heavy production into off peak or shoulder periods
• Staggering the start up of large pieces of equipment so you avoid sharp demand spikes
• Using built in timers on appliances to spread load more evenly across the day

A small shift in when you use power can have a big impact on both demand charges and overall costs.

Considering solar and other efficiency upgrades

Some small businesses can benefit from rooftop solar, efficient HVAC upgrades, or improved insulation and glazing.

Before investing in new equipment, it is wise to:

• Understand your current usage profile and tariff structure
• Get independent advice on likely payback periods
• Check for state or federal incentives or tax measures

Zembl can connect eligible businesses with specialist partners that focus on solar and efficiency solutions for commercial sites.

How Zembl helps electricity small business customers

Many small business owners do not have the time or expertise to monitor the energy market, negotiate with multiple retailers, and stay across changing regulations.

Zembl is an Australian based energy comparison and brokerage service that focuses on helping businesses save on their electricity and gas bills.

Free small business electricity bill comparisons

Our process is simple:

1. You share a recent electricity bill via our secure online form
2. An Energy Expert reviews your usage, tariff and current rates
3. We compare your details against competitive offers from our panel of Australian retailers
4. If we find a saving and you approve, we can switch you on the spot

There is no interruption to supply and no charge to your business for using our comparison service.

Ongoing support as your business grows

Energy needs change as businesses grow, open new sites or install new equipment. Zembl offers services for both single site SMEs and larger commercial and industrial customers, including multi site advice, contract reviews and access to energy intelligence and efficiency partners.

By revisiting your energy plan before your current contract ends, you can avoid rolling onto higher standing offer rates without realising it.

When to seek expert help with your electricity

You may benefit from expert support if:

• Your bills have increased sharply and you do not understand why
• You have received a price change letter from your retailer
• You are opening a new site or adding major equipment
• You have not reviewed your electricity plan for more than 12 months

In these situations, a quick bill review can highlight whether your tariff, rates or contract structure need attention.

Next steps for electricity small business customers

Getting control of electricity costs does not require technical expertise. Start with your latest bill, check your tariff and contract status, then explore whether a better offer is available.

Zembl’s Energy Experts can support you at each step, from understanding your small business electricity bill right through to securing a more competitive plan and exploring longer term efficiency opportunities.