Energy costs can cut out a massive chunk of your profits. While energy costs are volatile and impacted by influences outside your control, there are things that you as a business owner can do to influence how much you pay.
Energy efficiency and investing in solar power are 2 very easy, very practical things you can do. You pay less for electricity if you generate your own, or use less by turning the light off in a room when you’re done using it.
Another fantastic way to reduce energy expenditure is by negotiating a competitive energy contract.
What is an energy contract?
Energy suppliers often offer different deals on your energy. These deals, called energy plans, are negotiable and can be tailored (within reason) to your specific needs.
With so many different plans on the market today, there’s a lot to think about. Here are just a few factors you should take into consideration when choosing a plan.
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- Price
- Contract duration
- Any potential discounts
- Incentives and Benefits
To get a plan to work for you, you need to be able to negotiate from a position of strength and know the ins and outs of the energy world.
This, admittedly, can seem daunting to many business owners who often don’t have the time to spend brushing up on their energy industry knowledge.
Negawatt Energy Solutions will give you all the information you need to negotiate a competitive energy contract that saves you money every month.
Your position of strength, when it comes to negotiating a competitive energy contract, depends on a lot of different things, including if you:
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- have a smart meter
- have an eco-friendly, sustainable energy plan in place (GreenPower plan)
- have a solar energy system
- live in the city.
Tariffs
Your tariff (the way you are changed for your energy) is more flexible than you might think.
Choosing the right tariff can save you hundreds of dollars every month on your energy bill.
Let’s take a look at some of them.
Electricity Tariffs:
– Single Rate Tariffs
Single Rate Tariffs mean you pay the same rate regardless of peak (periods of high energy demand) or off-peak times (periods of low energy demand).
Single Rate Tariffs are also called flat rate, standard rate, anytime rate and peak rate tariffs.
Note: Gas Tariffs are only available with Single Rate Tariffs.
– Time-of-Use Tariffs
This type of tariff means that your energy costs change depending on the time of day you use it.
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- It’s more expensive during peak hours (Monday to Friday working hours and evenings)
- It’s less expensive during off-peak hours (overnight and weekends)
Remember: some energy retailers have other usage periods on top of the peak and off-peak hours. This will be mentioned in their plan summary.
– Controlled Load Tariffs
Some appliances use more energy than others (think hot water systems, boiler, HVAC systems etc).
Your energy retailer may charge more just for these appliances.
This tariff is usually only applied to appliances that run overnight or in off-peak times.
This means that controlled load rates are often lower than other tariffs.
– Demand Tariffs
Demand tariffs include the usual supply and usage charges, but have an additional charge on top that includes the intensity of your energy demands.
If you have a lot of appliances and machines running at once, then you can be charged an additional fee for their usage.
Price Changes
Remember what we said about energy prices being volatile and influenced by factors out of your control? The same is true for energy retailers.
Things like global tension (see Russia-Ukraine war), grid strain, changes to generation assets, substation faults and a whole host of other factors can influence the price of your electricity.
Even if you sign a competitive contract, with the most affordable tariffs, your rate can change to reflect this.
There are 3 main reasons this happens:
- The retailer has to pay more for the energy.
- The cost of getting energy (electricity or gas) to your business goes up.
- The government adds on costs for the retailer.
These costs are then added up and then tacked on to your bill.
Finding a plan that works for you can be tough. It requires a lot of thought and planning, and despite your best efforts, you can end up with a plan that is…disadvantageous to your business.
Remember that your retailer is a business, and they want to make money. You need to have all the facts at your disposal to make sure that you come out on top in your energy contract negotiations.
And we can help with that. Contact us today at: https://www.negawattenergy.com.au/contact-us/ to get started.