Are your business electricity bills too high? Want to find cheaper rates? In this guide, we’ll break it down and help you save money.
Business Electricity Rates
Business electricity rates are what companies pay for using electricity. These rates are often different from what you pay at home. That’s because businesses usually use more energy at different times of the day. A restaurant may use ovens all day, while a factory may run heavy machines. So energy suppliers charge businesses based on how much power they use and when they use it. Business electricity prices are not one-size-fits-all. They depend on three main things:
- How much energy does your business use?
- When you use the energy.
- The type of contract you choose.
It’s important to shop around and compare prices. You can often save hundreds—if not thousands—of dollars each year by switching to a better plan.
Why Business Electricity Rates Are Often Higher Than Residential
You might wonder: why do businesses pay more than people at home? Here are a few reasons:
- Businesses use more energy. Larger usage means higher bills.
- They often use power during peak hours. That’s when electricity is most expensive.
- Their energy needs are more complex and harder to manage.
A small business in Texas may pay 11.5 cents per kilowatt-hour (kWh), while homeowners in the same area pay about 10.8 cents per kWh. That small difference adds up fast when you’re running lights, machines, and air conditioning all day.
Fixed vs. Variable Rates
There are two types of business electricity plans: fixed and variable.
Fixed rates mean you pay the same price per kWh every month. This helps you stick to a budget.
Variable rates can go up or down each month. If prices drop, you save. But if they go up, so does your bill.
Most businesses like fixed rates because they’re predictable. But if you’re okay with a little risk, variable rates may save money in the long run.
Case Study: How One Store Saved Big
Let’s look at a real-life example. A small grocery store in Ohio was paying $2,800 a month on electricity. That seemed high, so the owner compared business electricity rates from other companies. She found a fixed-rate plan that lowered her price by 2 cents per kWh. New monthly cost? Just $2,150. That’s a savings of $650 each month—or nearly $8,000 a year. All from just comparing and switching to a better plan.
Peak and Off-Peak Hours Matter
Electricity costs more during peak hours. These are times when everyone is using power, like 9 am to 5 pm weekdays. If your business can use power at night or on weekends, you might get lower rates. Some companies offer special “time-of-use” plans. These charge less for off-peak energy use. So if your bakery starts baking at 5 am instead of 9 am, you could end up saving big.
Green Energy Plans for Businesses
Want to help the planet and save money?
Many suppliers now offer green electricity plans from solar, wind, or hydro power. These can sometimes be cheaper than traditional plans. In 2023, over 33% of American businesses reported switching to green power. Why? Because customers like it, and it can cut costs. A coffee shop in Seattle switched to 100% wind power. Their energy cost dropped by 15% in one year.
How to Compare Business Electricity Rates
Here’s how to compare different providers:
- Find your monthly usage in kWh.
- Go online or call energy suppliers.
- Ask for business electricity rates and contract terms.
Compare:
- Price per kWh
- Contract length
- Fees for cancelling early
- Extra services, like free audits or energy advice
Some websites offer business energy comparison tools. Just enter your ZIP code and get a list of plans in minutes.
How Deregulated Markets Work in Your Favour
In many U.S. states—like Texas, Pennsylvania, and Illinois—the energy market is “deregulated.” That means you can pick your energy provider, just like choosing a phone company. This gives you the power to shop around for better rates. In Texas, businesses saved an average of 16% after comparing providers. In Pennsylvania, small companies saved about $1,200 yearly by switching. If you’re in a state with a deregulated market, use that to your advantage. Remember, if you outsource parts of your business, energy savings should be taken into account.
Watch Out for Hidden Fees
Sometimes the cheapest plan isn’t the best. Read the fine print to avoid surprises.
Some contracts include:
- Start-up fees
- Early exit fees
- Monthly service charges
- Price increases after a few months
Ask questions before you sign. Make sure you’re really getting a good deal.
Tools and Tips to Lower Your Business Power Bill
Want to use less power and save more?
Try these tips:
- Switch to LED lights—they use up to 80% less power.
- Turn off machines when not in use.
- Get a smart thermostat to control heating and cooling.
- Schedule regular energy audits to find hidden savings.
Some electric companies even offer free tools to track your usage online.
How COVID-19 Changed Business Energy Use
During the pandemic, many offices closed or went remote. Business power usage dropped by 16% in 2020, according to the U.S. Energy Information Administration. Today, many companies use hybrid models. This has changed when and how they use energy. Now is a perfect time to review your electricity plan and your annual energy costs. You may be overpaying for energy you no longer use.
Conclusion: Easy Steps to Save on Business Electricity Rates
Ready to start saving? Here’s what to do:
- Gather your last three energy bills to see what you’re paying now.
- Compare rates online or call suppliers in your area.
- Pick a better plan with a good rate and fair terms.
That’s it! Smart choices today lead to big savings tomorrow.
