Small and medium-sized enterprises (SMEs) face considerable challenges to receiving good consumer outcomes in the energy sector. The Australian Competition and Consumer Commission (ACCC) recognise this in their recent report, Retail Electricity Pricing Inquiry—Final Report. They explain,

“Small business customers’ engagement with retailers, whether searching for offers or dealing with day-to-day issues like billing, can be just as difficult as their household counterparts. However, the electricity costs for small businesses can be far higher, representing a major part of operating costs.”

Business NSW has long recognised that small businesses have limited bargaining power. Electricity offers are often confusing and lack transparency and small business owners are time poor and often lack the resources to identify and implement energy efficiency measures. The daily and strategic challenges faced by small business are well understood, in particular the challenges they face navigating electricity offers, discounts and trusting the range of comparability services, programs and consultancy services on offer that will deliver the best outcome for their business. Small businesses are naturally sceptical about energy efficiency gains, worried about wasting money on soon to be outdated technologies. Small businesses often do not know who to trust, how to compare offers, or make sure they are getting the best possible deal.

To address this pressing need, Energy Consumers Australia provided funding to Business NSW through our Grants Program for this project.

Read the full report from Business NSW to better understand the challenges facing small businesses in navigating the energy system.

This project researches SMEs’ relationship with five aspects of the energy market: advice, procurement, energy efficiency upgrades, renewables, and net carbon zero. It gauges SMEs’ awareness of each, take up of each and most critically, assess the barriers to further take up. This insight will then inform recommendations for policymakers regarding the future design of SME-oriented energy policies. It expands on earlier SME-oriented studies by looking beyond the energy bill to other aspects of SMEs’ relationships with energy.

It will inform Government program design, and non-government organisations’ delivery of energy advice and services to business, including those delivered by Business NSW and My Business (formerly Business Australia). This will drive improvements to existing service offerings and potentially lead to the creation of new services to address missing pieces in the business energy information and service landscape.

Findings from the survey have already been used as supporting evidence to inform NSW and Commonwealth governments as they shape business-oriented energy policy design.

The survey results indicate a number of stark findings, including:

• SMEs that are on the net zero emissions path are moving quickly, but the implications of net zero for businesses are not well understood even by businesses who have set themself a net zero target

• The majority of SME’s have checked their price in the last 12 months, but they are just now getting the shock. This will be exacerbated by recent events affecting costs of energy, especially for more energy intensive SMEs.

• SMEs are still Googling for energy advice – the most used sources of advice are rated as being the least useful; the most useful sources are the least used.

Energy Consumers Australia is proud to have partnered with Business NSW on this report and support the recommendations the report has made from the insights gathered. We need to be doing much more to help small business owners understand the complexity of the energy system and equip them to make the necessary changes that lie ahead. This report is an essential step to starting this process.