We all dread that quarterly electricity bill at home and unfortunately, in the business environment it is probably only going to be larger. In this guide we look at ways to save power and how to get a better deal.
WHY should I compare electricity companies?
Once electricity supply was from the state governments now we have a deregulated market and different retailers can compete for your business. (Note WA is still Government-owned).
Competition should lead to better pricing and save you money!
WHAT can I do to save power?
We need the power but at least there are ways we can reduce our bill saving us valuable money. We can:
- Shop around for the cheapest deal
- Install solar panels which can reduce your bill with either a payment upfront or monthly overtime to pay for the panels.
- Use more energy-efficient lighting, devices, and machinery.
- Ensure devices etc. are turned off when not being used.
- Use power-hungry devices when rates are cheap, for example, at night
- Use an energy broker or consultant to negotiate a deal.
HOW can I get a better deal on my power bill?
The best method of quickly saving money is to review what prices you can get. Being a small business, it is unlikely you will get a special deal based on massive usage but energy retailers are keen to get your business if you are in the market. The great news is there is an easy way to compare prices. You will see providers quoting a reference price/point (benchmark electricity price set by the government) and a discount. This enables easy comparison between companies to make a quick decision.
Other terminology you should understand:
- Discount– reduction expressed as a % below the reference price. Always check to see for how long the discount will last, as price may increase after this period.
- Rates – This is how much you pay per Kilowatt-hour Kwh (a 100watt lightbulb on for 10 hrs uses 1 Kwh). Rates may be flat or expressed as peak or off-peak or based on time of day billing (charges go up during busy times).
- Sign up discount – normally expressed as a $ amount discount off your first bill
- Exit fees– a charge to move to a different energy retailer
- Payment options– you may be offered a fixed monthly charge which gives you predictability of costs or variable usage charges payable by all the normal methods, for example, credit card
- Combined discounts – you may get a better deal if you sign up to gas as well as electricity
- Contracts– some offer no lock-in contracts others sign you up for a period but normally based on a deal
- Accuracy of billing – When calculating your electricity usage, your retailer can either estimate your usage, potentially overcharging your business, or measure it. It is worth investigating the technique employed by your retailer or package.
- Availability– If you have locations in different states you may have to have multiple retailers.
- Green Power – Normally more expensive but derived from renewable energy sources such a wind. Sometimes referred to as carbon offset.
- Locked-in pricing – sometimes expressed as peace of mind or fixed. Here a retailer will lock in the cost per Kwh for a set time. The benefit of this is you are protected from any price increase.
- Late payment fees – charge if you do not pay your bill on time
- Customer service – Either online only or telephone as well. Hours may vary.
- Solar feed-in tariff – how much you will be paid per Kwh to give electricity back to the grid. Most solar panel solutions allow you to use your solar power first before feeding your excess back into the grid.
A good thing to know is that if you have a blackout in your town it is not the electricity retailer who is fixing it rather the energy distributor. https://www.energymadeeasy.gov.au/frequently-asked-questions/who-is-my-energy-distributor
SUMMARY – Small Business Electricity
No one plan will be right for all small businesses so shop around and you might be surprised how much you can save for a bit of research.