How to Choose an Electricity Company for Your Small Business?

If you compare residential and commercial entities' bills, you will notice a huge difference in electricity tariff. As per recent data, there are around 2 million active business establishments in Australia. The reason is that businesses place a heavier load on the grid than residential properties, and are hence charged higher prices than residential properties are. 

How to Choose an Electricity Company for Your Small Business?
[image: pexels by burak kebapci]

Like the residential consumers, businesses in Australia can also choose the cheapest electricity company to help them save on electricity costs. Here are a few tips and guidelines to choose an electricity company for your small business. 

Price of Business Power 

The first thing you need to do while choosing an electric company is power price comparison. You need to understand the subtle difference between the power prices of Electricity Company-A and Electricity Company-B. Price comparison is easy to do, but you need to consider certain factors like 

● What is the cost per kWh?

● What is the daily fixed charge levied by the electricity company?

Some electricity companies charge higher fixed charges and lower energy costs per kWh or vice versa. You need to look for an energy company that offers balanced rates for cost per kWh and daily charge. 

Type of Energy Company

Australia has an open National Electricity market where electricity generation companies sell their power to energy retailers. You need to consider price fluctuations in the power market while choosing an energy company.

There are two main types of electricity generation companies – electricity generation companies using non-renewable sources of energy like coal, gas, and oil and green energy companies using renewable sources of energy like hydro, solar, and wind. The cost of coal, gas, and oil is ever-increasing, which leads to an increase in price. On the other hand, the cheapest electricity company purchases power from wind and solar farms, and they have a price advantage due to lower production costs. 

Discounts and Promotions

Every energy retailer offers discounts and promotions to entice customers. Businesses need to look at the discounts and promotions offered by different energy companies before selecting one. 

Some electricity companies offer discounts on quick bill payments or provide incentives to businesses to select their energy plans. 

The Contract

The contract should have clear terms and conditions for everything, including usage rates, payment terms, and the exit clause. Some electricity companies have a lock-in period of 1-2 years, while others don’t have any time period and are more flexible. Some electricity companies charge exit fees while some don’t. 

The energy contract gives you security and also defines the service level of the electricity company and its commitment. The contract should cover all aspects of business relationships between business customers and energy suppliers. Put simply, a good energy contract would mean:

● A better electricity tariff for your business

● Better discounts on the electricity bills as a whole 

● Set cost for kilowatt-hours used and protection against fluctuating prices 

● A break up of charges mentioned including termination charge if you want to exit early 

Quick Hassle-Free Connection

Business continuity is crucial for every organisation, and electricity is essential for daily operations. The electricity company should be ready and capable of providing a quick, hassle-free connection on request.