Your tariffs/consumption charges
A tariff is the way you get charged for your energy usage. There are two main tariffs to be aware of.
Single rate/flat rate: With this type of tariff, you pay a fixed rate for energy, no matter when you use it. For example, it could cost you 22 cents to buy 1 kilowatt-hour (kWh) of electricity from the grid, whether you use it at 4am, 11am or 6pm.
Time of use/flexible rate: Here, the rate you pay for energy varies depending on when you use it. For example, your rates might be split:
- Peak rate of 38c/kWh between 2pm to 8pm on weekdays.
- Off-peak rate of 10c/kWh between 9pm to 7am on weekdays and all day on weekends.
- Shoulder rate of 18c/kWh between 7am to 2pm and 8pm to10pm on weekdays.
Peak, off-peak and shoulder periods can vary between energy providers. To be charged a time of use rate, you usually need to have a digital smart meter installed instead of a traditional analogue reader.
Cooper says deciding between single rate or time of use pricing depends on your business and when you use the most energy.
“If you’re a baker who opens at 4am then most of your usage may happen off-peak, so you could save by moving to time of use. Whereas if you own a pub and your busy time runs through the peak period, moving to time of use pricing could be detrimental. So, it all depends on what’s known as your ‘load profile’ – when you use energy.”
Could you be saving on your business energy bills?
Aside from reviewing your usage, meter read details and tariff, there are lots of ways to reduce your consumption and cut down on energy costs. If you’re looking to have your energy bill explained or for ways to reduce expenses, Cooper says a free energy audit from beap is a great place to start.
“We’re a federally funded free service – so we help small business owners shop better when it comes to energy retailers, and to identify energy efficiency opportunities.”