Smart meter rollout

Businesses that still have older electricity meters are likely to have them replaced with smart meters over the next few years. New national rules aim to replace legacy meters across the National Electricity Market by 2030.

The replacement is compulsory and businesses cannot opt out when contacted by their electricity retailer. However, businesses should check several important details before installation

What does a smart meter do?

A smart meter digitally records how much electricity a business uses at different times of the day. It sends this information remotely, removing the need for most manual meter readings and reducing the likelihood of estimated bills.

Detailed usage data can help businesses understand when they use the most electricity. It may also help identify inefficient equipment and inform decisions about solar, batteries and energy contracts.

Receiving a smart meter will not automatically reduce a business’s electricity bill. Costs will depend on the electricity plan, the tariff applied and whether the business can change when it uses energy.

Understanding different tariffs

A flat tariff generally charges the same usage rate throughout the day. A time-of-use tariff applies different rates during peak, shoulder and off-peak periods. A demand tariff includes a charge based on the highest level of electricity a business draws from the grid during a specified period.

Time-of-use pricing may suit businesses that can move some activities to cheaper periods. Solar and batteries may also reduce the amount of electricity drawn from the grid when prices are highest.

Many businesses have less flexibility. Cafés, restaurants, retailers, manufacturers and accommodation providers often need to operate equipment when customers require their services. Changing operating hours or delaying essential activities may not be practical.

Demand tariffs require particular attention. A significant part of a monthly bill may be influenced by one 30-minute period when several appliances or machines operate at the same time. One unusually high operational peak could therefore affect a business’s charges for the entire month.

Protections for businesses

The retailer that installs a smart meter must obtain the customer’s consent before changing the tariff structure during the next two years. This protection applies to the structure of the tariff, not changes to electricity prices. The protection also does not apply if a business changes retailers. Any new offer should be checked carefully to determine whether it includes time-of-use or demand charges.

Retailers must notify customers before installation and provide a five-day installation window. Electricity will be temporarily turned off while the meter is replaced. Businesses should consider whether the proposed timing could disrupt trading, refrigeration, machinery, security systems or digital equipment. Businesses will generally not be charged for the installation when the retailer initiates the replacement.

What should businesses check?

Businesses should confirm:

• when the installation will occur and how long supply will be interrupted
• whether the tariff structure or electricity prices will change
• whether the plan includes time-of-use or demand charges
• what the proposed tariff would have cost using the previous 12 months of electricity use
• how electricity-use data can be accessed and understood.

Smart meters can provide businesses with better information and greater control over their energy use. The value will depend on receiving clear information, understanding the applicable tariff and selecting an electricity plan that suits the way the business operates.

Eligible small businesses can use the Australian Government’s free and independent Energy Made Easy service to compare electricity plans.