This blog post was accurate at the time of publishing. However, programs, policies and rebates may have changed since then. We recommend checking our website or contacting us directly for the most current information on 1300 430 917.
These are tough times for Australian businesses. Rising material and energy costs are making it harder for small and medium-sized enterprises (SMEs) to grow and compete. However, challenges can bring opportunities. By focusing on energy efficiency, SMEs can reduce costs, lower emissions, strengthen resilience, and meet increasing demands from customers, suppliers and investors for more sustainable operations.
Efficiency, electrification and renewables: The tools for change
Energy efficiency, electrification and renewables are three key tools SMEs can use to lower energy bills and emissions.
• Energy efficiency means getting more from every unit of energy. This could involve changing old lightbulbs for LEDs, which use up to 90% less power, or improving insulation to reduce heating or cooling costs.
• Electrification replaces fossil-fuelled equipment with modern electric alternatives, such as switching from gas to efficient reverse-cycle systems or heat pumps.
• Renewables, like solar and wind, ensure that as businesses source more electricity from clean sources, they can power their operations with zero-carbon energy.
Seizing the Business Opportunity
Energy upgrades give businesses control over energy costs and emissions. To begin, each business should ask three key questions:
1. How is energy being used in my business?
• Most businesses know where their biggest energy costs come from, but many do not have the detailed data or advice needed to find hidden savings.
• Start by improving visibility. While a standard meter tracks overall electricity use, advanced metering and submeters can monitor specific equipment or areas. This approach reveals inefficiencies and performance issues.
• An accredited energy auditor can also provide tailored insights. They can identify strategic upgrades and potential cost savings.
• Establishing an Energy Management System (EnMS) Energy upgrades work best within a structured energy management approach. This ongoing process helps optimise energy use.
• A formal EnMS supports continuous improvement and delivers strong returns, especially where energy is a major cost. By using less energy, electrifying operations, and integrating renewables, businesses not only reduce costs but also build resilience against future energy price shocks.
2. What energy upgrade opportunities can I act on now?
• Energy Efficiency and Electrification improve efficiency gains, reducing energy use, maintenance costs, and emissions while boosting process quality. It’s usually more cost-effective than just solar or renewable projects.
Opportunities range from quick fixes to complete overhauls. For instance, HVAC systems can account for 40% of an SME’s energy bill. Upgrading to efficient reverse-cycle units or optimising existing systems can lead to significant savings.
• Demand Flexibility reduces costs by shifting energy use away from costly peak periods. Smart systems can automatically change energy consumption in response to price changes, known as demand response. Some businesses even receive payments for some kinds of demand response services. For high-energy users, when energy is used can be just as important as how much.
• Electricity Renewables are now Australia’s cheapest source of power. On-site solar can lower grid reliance and exposure to fluctuating prices, and it is often cheaper than purchasing electricity. When space is tight, power purchase agreements (PPAs) with large renewable generators enable businesses to acquire clean energy at stable rates.
3. Can I get a better deal on the energy I purchase?
• Even businesses with on-site renewables often need some power from the grid. Shopping around is important—retailers compete on pricing, and fixed-price contracts offer cost certainty for one to three years.
• For larger or energy-intensive businesses, exploring innovative contracting models (like block purchasing or renewable PPAs) can lead to additional savings. Expert advice is usually worth the investment.
Businesses should also check state and federal energy efficiency rebate programs to find out what incentives may be available.
