Small businesses located along Australia’s East Coast may experience an increase in electricity costs ranging from 4.2% to 8.2% in the near future, according to the Australian Energy Regulator’s (AER) draft determination for electricity pricing in the 2025–26 financial year.
Electricity remains a significant overhead for most small businesses. As such, a notable increase in energy tariffs has the potential to substantially impact operating costs and overall profitability.
Outlined below are four strategies businesses may consider to help mitigate the impact of rising electricity expenses:
- Enhance Energy Efficiency: Encourage staff to adopt energy-conscious behaviours and assess opportunities to reduce energy usage. This may include switching off equipment when not in use, enabling power-saving features on devices, and installing energy-efficient lighting solutions such as LED systems. Incremental changes to daily practices, coupled with minor capital investments, can yield meaningful reductions in energy consumption.
- Consider Renewable Energy Investments: Assess the feasibility of installing solar panels on your commercial premises. While there is an initial capital outlay, this may be offset over time through reductions in electricity bills and potential revenue from feed-in tariffs where excess energy is supplied back to the grid. In addition, government rebates and incentive schemes may be available to support this investment, enhancing its long-term cost-effectiveness.
- Optimise Operational Timing for Off-Peak Tariffs: Review your energy usage patterns and explore opportunities to schedule high-consumption activities during off-peak periods when electricity rates are typically lower. This could include adjusting production hours, operating machinery, or charging electric vehicles outside peak demand times to achieve operational cost savings.
- Review and Compare Energy Contracts: It is prudent to regularly review existing electricity supply agreements and compare them with alternative providers. The energy market remains competitive, and more favourable tariff structures or plans tailored to small businesses may be available. Switching providers or renegotiating contracts could result in considerable cost savings.
With energy and utility prices trending upwards, maintaining close oversight of your electricity, gas and water expenditure is essential. Our team can assist with monitoring your utility costs, adhering to energy budgets, and identifying cost-saving opportunities to help you maintain financial sustainability.
