How electricity tariffs are priced
Electricity tariffs are built from wholesale energy costs, network charges for using local distribution infrastructure, balancing and capacity market costs, environmental levies and the supplier's own margin. These combine into the unit rate and standing charge quoted to a business.
Because wholesale electricity prices move daily, the rate a business is quoted can change from one week to the next even for an identical consumption profile. Locking a quote once received, rather than waiting, is usually advisable if the rate meets the business's budget expectations.
Meter type and pricing
| Meter type | Typical business size | Pricing basis |
|---|---|---|
| Non-half-hourly (NHH) | Small to medium | Estimated or actual reads, flat unit rate |
| Half-hourly (HH) | Medium to large | Actual consumption every 30 minutes, time-of-day pricing |
| Smart / AMR | All sizes | Automated remote reads feeding into billing |
Fixed electricity tariffs
Most small and medium businesses choose a fixed electricity tariff for the predictability it offers. The unit rate and standing charge are agreed at the point of signing and remain constant for the term, which can run from one to five years. This suits businesses that prefer to know exact energy costs when setting budgets.
Compare business energy prices
Enter your postcode and business details to compare available commercial energy prices.
Time-of-use and off-peak tariffs
Some electricity tariffs price consumption differently depending on the time of day, charging less during off-peak overnight periods and more during daytime peak demand. This can suit businesses running equipment overnight, such as bakeries, cold storage or certain manufacturing processes, but offers little benefit to a standard daytime office operation.
- Lower rates typically apply overnight and at weekends
- Peak rates apply during weekday business hours
- Best suited to businesses that can shift load to off-peak periods
What affects the electricity rate quoted
- Annual consumption volume in kWh
- Region and local distribution network operator area
- Contract length requested
- Business credit rating and payment method
- Meter type and whether smart metering is in place