Tired of paying too much for energy at your business? You’re not alone. Let’s break down commercial energy rates in plain words and learn how to save money.
What Are Commercial Energy Rates?
Commercial energy rates are the prices businesses pay for electricity and gas. They’re different from the rates homes pay. Business energy costs are often higher because companies use more power.
Think of it like this: A bakery with ovens, fridges, and lights eats more energy than your kitchen at home. So the electric company charges them differently.
Why Do Businesses Pay Different Rates?
Good question! Businesses use energy in big chunks. So power companies look at more than just how much energy you use. They also look at:
- Time of use – Morning rush or late night matters.
- Peak demand – If you use a lot all at once, it costs more.
- Location – Rates vary by state or even neighborhood.
Here’s an Example
Let’s say two pizza shops use the same amount of energy each month.
- One shop runs mostly at night when energy is cheaper.
- The other runs ovens all day during peak hours.
The night owl saves more, even if both eat the same energy. That’s because the power company charges more when many people are using power at once.
See also: How Excavator Hire Can Improve Your Building Site Management
Businesses That Watch Rates Save Big
Energy prices have been rising. In 2023, commercial electricity in the U.S. cost an average of 13.45 cents per kilowatt-hour (kWh). That’s a 10% jump from the year before!
But some smart businesses cut their energy bills by 20% or more. Let’s talk about a real case.
Case Study: A Coffee Shop’s Smart Switch
Bean Brothers, a small coffee shop in Texas, was paying $750 each month in energy. They switched to a fixed-rate plan and changed their hours slightly. Now they pay just $540.
That’s $2,520 saved in a year—enough for new chairs or better beans!
Types of Commercial Energy Rate Plans
Not all energy plans are the same. Here are the common ones:
Fixed-Rate Plans
You pay the same price for each unit of energy, no matter what time you use it. It’s like locking in a fair deal that won’t change.
- Great if:
- You like stable bills.
- You want to avoid surprises.
Variable-Rate Plans
Prices change with time and energy markets. Bills can go up—and down.
- Good if:
- You can handle change.
- You’re okay with some risk.
Time-of-Use Plans
Your rate depends on when you use energy.
Cheaper at night or weekends. Costlier during the day.
- Works well if:
- You can shift your work hours.
- You mostly run during off-hours.
How to Choose the Best Energy Plan
Not sure what plan is right for your business? Here’s a simple checklist:
- Know your usage: Look at past bills. How much energy do you use?
- Know your hours: When do you use most power? Peak or off-peak?
- Shop and compare: Get quotes from at least 3 energy providers.
- Ask about fees: Some plans charge you to cancel early.
Smart Ways to Cut Business Energy Costs
Want to pay less? Try these tricks:
1. Switch Off Unused Machines
Don’t leave machines running when they are not in use. A US Department of Energy study showed that simply turning off unused office equipment can cut up to 26% of energy use.
2. Use LED Lights
LEDs use up to 75% less energy than old bulbs. They also last longer.
3. Get a Smart Thermostat
It adjusts your heating and cooling. You save more when no one’s around.
4. Schedule an Energy Audit
Many local utilities offer free energy inspections. They point out what’s wasting power.
Solar Power Can Reduce Your Rates
Solar power isn’t just for homes. Many small businesses are going solar too.
According to the Solar Energy Industries Association (SEIA), over 14% of commercial buildings in the U.S. could save money by going solar. Businesses can cut monthly bills by 40% or more in some cases.
Example: A nail salon in Phoenix installed rooftop panels and dropped their monthly bill from $600 to $360.
Why Monitoring Your Energy Rates Matters
Electricity rates change over time. They can go up in winter or summer when demand soars.
If you’re not watching, you could end up stuck in a plan that costs more.
Some states let you change energy providers. You can shop like you shop for cellphone plans.
States Where You Can Choose Your Provider
If your business is in these states, you may have options:
- Texas
- Pennsylvania
- Ohio
- Illinois
- New York
Example: In Texas, businesses saved an average of 15% by switching providers in 2023.
Final Thoughts: Time to Take Control
Commercial energy rates can eat up your business profits fast. But you’re not helpless.
Here’s your action plan:
- Understand how your energy rate works.
- Shop around and look for better deals.
- Cut usage or shift to off-peak hours.
A few simple changes can save you thousands each year. Start today—your bottom line will thank you.
