Your electricity bill isn’t just one flat rate. It’s just like those flight ticket rates that never remain stable. And this shift occurs mostly during peak or off-peak hours. If you’re not paying close attention, you’ll lose money on the table. Possibly a lot of it.
Peak and Off-Peak Rates Explained
Your electricity grid is like a highway during rush hour. When everyone needs power at the same time, the network gets congested. Suppliers have to fire up extra generators and pull more resources to meet demand. That costs them more. That’s why business electricity providers charge you more during this time.
Peak hours are simply the period when businesses are humming: weekday mornings or afternoons when lights blaze, machinery runs, and air conditioning systems pump. Every individual needs electricity during this period.
On the flip side, there are off-peak hours, which are exactly the opposite of peak hours. This is a period when businesses are shutting down (mostly at night), late evenings, overnight, and on weekends. During this period, demand drops, and prices follow suit.
Some providers also have a middle ground called shoulder periods. These rates lie between peak and off-peak times, with moderate pricing to match the average demand.
When Do These Rates Kick In?
Let’s get into the technicalities of these times.
Across Australia, peak and off-peak periods aren’t the same. Where 2 pm to 8 pm on weekdays are peak hours in NSW, for QLD it’s 4 pm to 8 pm. The point is that each state has its own rhythm. Your local distributor sets the schedule based on regional usage patterns. But a generic timeline might look like this:
Time periodTypical hoursDays Peak 7 am to 9 pmWeekdays Shoulder 9 pm to 10 pm, 7 am to 10 amWeekdays Off-peak 10 pm to 8 amWeekends and public holidays
Your actual rates will depend on your provider and the specific plan you’re using. And that’s the reason why you must give that fine print a fine read.
Why Should Your Business Care?
Because you can save a lot! A small difference between those peak and off-peak periods can result in hundreds to thousands of dollars of savings. As a business owner, you already deal with numerous expenses: payroll, supplies, rents, taxes, and more. You don’t want to give another utility or service the opportunity to harm your bottom line, right?
Let’s say you own a bakery. Firing up those ovens at 3 am instead of 9 am (peak hours) can save a lot of dollars on those energy bills. You get the same output. But you won’t get the same expensive bill.
But there’s a catch as well. You cannot just shift your bakery operations to 3 am. After all, some items deserve to be freshly made and served. Likewise, an office needs power when most of its employees are on the floor, working.
You just have to nail the timing, which is practically flexible, and can save energy costs.
Is a Time-of-Use Plan Right for You?
Not all electricity plans are designed to burn a hole in your pocket. Some stick with a flat rate, be it day or night. Time-of-use pricing saves the day for companies that can:
· Perform those heavy energy tasks during off-peak times
· Use equipment overnight or on weekends
· Control when they use power-hungry machinery
· Store products that don’t need constant attention
It’s less helpful if your operations are locked into standard business hours with no wiggle room.
Ask yourself: Can you move 30% or more of your electricity use to off-peak times? If yes, time-of-use pricing deserves serious consideration.
The Switch Worth Making
Many Australian businesses stick with their original electricity provider out of habit rather than loyalty. They think switching is tricky and risky. But in reality, it’s neither.
The market is full of alluring offers. Providers are always hungry for favourable business outcomes. And most will handle the entire transfer process for you. No service interruptions or hassle, but potentially better rates.
Before you switch, compare:
· Peak, shoulder, and off-peak rate structures
· Contract terms and exit fees
· Green energy options, if that matters to your brand
· Customer support quality (because when the lights go out, you need help fast)
Your Next Step
Don’t just blindly switch to any provider because your current one is costing you a fortune during peak hours. Review your bills from the last three months. When is your business using the most power? What percentage happens during peak hours? Is it possible to shift any of that usage?
The answer is yes? A time-of-use plan could be the answer to shaving thousands of dollars off your bill. If not, a flat rate plan will be easy.
Ultimately, you don’t need to be an energy master, but instead just focus on running your business more efficiently.