A commercial electricity bill in Australia is rarely a single page. Most businesses receive multi-page documents packed with line items, abbreviations, and charges that seem designed to discourage scrutiny. Supply charges, usage rates split across time-of-use bands, demand charges measured in kilowatts rather than kilowatt-hours, network pass-through costs, and environmental levies all contribute to a total that can run into thousands of dollars per month.
Understanding each charge matters for two reasons. First, it tells you whether your current plan is competitive or whether you are overpaying on specific components. Second, and more relevant if you are evaluating solar, it shows you exactly which charges solar generation can reduce and which it cannot. A solar system does not lower every line on your bill equally. Some charges drop significantly, some partially, and some not at all. This guide breaks down every section of a typical Australian commercial electricity bill so you can read yours with confidence.
Supply and daily charges
The first charge on most commercial bills is the supply charge, also called the daily charge or service charge. This is a fixed fee for being connected to the electricity grid. It covers the cost of maintaining your meter, the physical connection to the distribution network, and basic account administration. You pay it every day regardless of how much electricity you consume.
For commercial premises, supply charges typically range from $1 to $3 per day, depending on your meter type, connection capacity, and retailer. Larger sites with CT (current transformer) metering or demand-tariff connections tend to sit at the higher end. Some retailers break this into separate meter and connection charges; others bundle it into a single daily line item.
Solar does not reduce supply charges. These are fixed costs tied to your connection, not your consumption. Even a system that offsets 100% of your daytime usage still pays the full daily charge. That said, knowing your supply charge matters because it represents the baseline cost of staying connected. When modelling solar payback, this charge is the floor beneath which your bill cannot fall.
Usage charges and time-of-use rates
Usage charges are the largest component on most commercial electricity bills. They are measured in kilowatt-hours (kWh) and represent the cost of the electricity you actually consumed during the billing period. Most commercial tariffs in Australia use a time-of-use (TOU) structure, which means the price per kilowatt-hour changes depending on when you use the electricity.
A typical TOU tariff divides each day into three pricing bands:
- Peak — the most expensive period, usually weekdays from around 2:00 pm to 8:00 pm. This is when grid demand is highest and wholesale electricity prices spike. Typical commercial peak rates sit between 30 and 45 c/kWh.
- Shoulder — a mid-price period covering the transitions between peak and off-peak, often 7:00 am to 2:00 pm and 8:00 pm to 10:00 pm on weekdays. Rates typically fall between 20 and 30 c/kWh.
- Off-peak — the cheapest period, covering overnight hours (roughly 10:00 pm to 7:00 am) and all day on weekends and public holidays. Rates are typically 12 to 20 c/kWh.
The exact hours that define each band vary by network area and retailer, so check the tariff schedule on your bill or contract. Some networks use seasonal definitions where peak hours shift between summer and winter.
This is where solar delivers its biggest impact. Solar panels generate electricity primarily during shoulder and early peak hours, which are the periods when you are paying the most per kilowatt-hour. Every unit of solar electricity you consume directly during these hours avoids a charge at the full retail rate. A business operating during standard weekday hours aligns well with solar generation, which is why commercial solar payback periods in Australia are often shorter than residential.
Demand charges
Demand charges are the most misunderstood line item on a commercial bill, and often the most expensive. Unlike usage charges, which measure total energy consumed in kilowatt-hours, demand charges measure your peak power draw in kilowatts (kW). Specifically, the network measures your highest average consumption over any 15 or 30-minute interval during the billing period, and that single peak value determines your demand charge for the entire month.
For many commercial customers, demand charges represent 30 to 50% of the total bill. A site that normally draws 50 kW but spikes to 120 kW for half an hour when all equipment starts simultaneously pays demand charges based on that 120 kW peak, not the 50 kW average. The network builds and maintains infrastructure to service your peak demand, and demand charges recover that cost.
Solar can reduce demand charges, but only when your peak demand occurs during solar generation hours. If your demand peak happens in the late afternoon when solar output is declining, or early morning before panels ramp up, solar may have limited impact on the demand component. Batteries paired with solar can shave demand peaks more reliably, but the economics depend on your specific load profile.
Demand charges deserve their own detailed analysis. Read our deep dive on demand charges and how solar interacts with them.
Network charges: TUOS and DUOS
Network charges cover the cost of transporting electricity from generators to your premises. They are split into two components: Transmission Use of System (TUOS) charges for the high-voltage transmission network that carries power from large generators across the state, and Distribution Use of System (DUOS) charges for the local distribution network that delivers it the last mile to your meter.
These charges are regulated by the Australian Energy Regulator (AER) and set by your local network operator, not your retailer. Your retailer passes them through, either as separate line items on your bill or bundled into your usage rates. Bundled network charges are more common on simpler retail plans; larger commercial customers on market contracts often see them itemised separately.
Network charges can include both a variable component (cents per kWh, reducing with lower consumption) and a fixed or demand-based component (dollars per kW of peak demand). Solar generation that reduces your grid consumption lowers the variable network charges, but the fixed and demand-based network components behave the same way as supply charges and demand charges respectively. Knowing which portion of your network charges is variable versus fixed helps you model solar savings accurately.
Environmental levies and green charges
Your bill includes several small charges that fund government environmental and renewable energy programs. These typically appear as separate line items or as a combined “environmental” charge:
- LRET (Large-scale Renewable Energy Target) — funds large-scale renewable projects. Retailers must purchase LGCs to meet their obligations, and the cost is passed through to customers.
- SRES (Small-scale Renewable Energy Scheme) — the scheme that funds STC rebates for rooftop solar. The cost of purchasing STCs from installers is distributed across all electricity consumers.
- State schemes — Victoria's VEET (Victorian Energy Efficiency Target) and similar programs add a small per-kWh levy to fund state-level certificate schemes like VEECs.
These levies are typically small (a fraction of a cent per kWh) and fund the same incentive programs that reduce your solar installation cost. Read our guide on STCs, VEECs, and LGCs to understand how these schemes work and how they apply to your system.
GST
Goods and Services Tax at 10% is applied to the total of all charges above. It is always the last item calculated on the bill. When comparing electricity rates between plans, check whether quoted prices are GST-inclusive or GST-exclusive, as retailers are inconsistent in their marketing materials.
Where solar savings actually come from
Now that you understand every charge on your bill, here is where a solar system makes a measurable difference and where it does not:
- Usage charges: the primary source of solar savings. Every kWh you generate and consume on-site avoids the full retail rate for that time-of-use band. Since solar generates during shoulder and peak hours, the avoided cost per kWh is high. This is called self-consumption, and maximising it is the single most important factor in solar economics.
- Demand charges: solar may reduce these if your peak demand aligns with solar generation hours. The reduction is partial and depends on your load profile. Batteries improve demand reduction reliability.
- Variable network charges: lower grid consumption means lower variable TUOS/DUOS charges. The saving is real but modest compared to usage charges.
- Supply charges: no reduction. These are fixed.
- Fixed network and demand network charges: no reduction from solar alone.
Electricity you generate but do not consume on-site is exported to the grid and earns a feed-in tariff, typically 5 to 10 c/kWh in most commercial contracts. Compare that to the 30 to 45 c/kWh you avoid by consuming the same electricity directly. The economics are clear: self-consumption saves three to six times more per kilowatt-hour than exporting. Right-sizing your system to match your daytime load is how you maximise the return.
See your bill breakdown instantly
Amperage's AI bill reader can extract all of these charges automatically from a PDF upload. It identifies your supply charges, TOU rates, demand charges, network components, and environmental levies, then maps them against solar generation to show you exactly where your savings will come from.