Compare Small Business Electricity Rates

Businesses have the right to choose an electricity supplier in deregulated energy markets like Texas and New York. Energy choice creates competition for power companies to provide the best small business electricity rates and high-quality service.

The right energy plan can help lower your business’s operating costs. Review your typical energy usage to find the best fit, then call the number on your screen or fill out the form to explore customized small business electricity options.

The average price of small business electricity in the U.S. is 14.15 cents per kilowatt-hour (kWh), based on the latest Energy Information Administration (EIA) data. In deregulated states like Texas, commercial energy rates are even lower, at 9.03 cents per kWh.

When you compare business electricity options, your actual rate options may vary widely based on provider, plan, and location. Business size plays a big role in your rates, as this affects how much energy you use. Seasonality is also a factor, as rates fluctuate throughout the year based on energy demand. For instance, a Texas small business may get better rates by securing a new plan in the fall or spring rather than the hot summer months.

While both homes and businesses can benefit from deregulated energy, the factors that affect their plan choice are quite different. Businesses must consider things like:

• Load profiles: Businesses typically use more power during daytime hours and may have machinery or equipment that creates spikes in demand. Homes usually have lower, steadier usage spread throughout the day.
• Billing structures: Small business electricity customers are often subject to demand charges or peak demand pricing, which can significantly affect bills. Residential customers usually just pay for the total kWh they consume.
• Energy intensity: Even small businesses like cafés or retail shops can use far more energy than a typical household. For larger operations, electricity costs can become one of the biggest line items in the budget.

Because of these differences, business electricity plans are structured differently from residential ones. For small business owners, choosing a properly tailored plan is critical for managing costs.

At Choose Energy, our team provides personalized, consultative support to help you find the right electricity plan for your business. When you request information, you’ll be connected with an energy specialist who can review your business size, usage patterns, and budget priorities to recommend tailored options. Because we work with a wide network of suppliers that offer electric for business across multiple states, we can match you with competitive rates and contract terms that fit your business’s unique needs.

Energy plan types include fixed, variable, block, and indexed rates. Learn more about the common types of small business energy plans to determine which is best for you.

Fixed-rate

Fixed-rate energy plans offer budget stability and predictable monthly bills. With a fixed-rate plan, your rate per kWh remains the same throughout the length of your contract. This plan type protects you from fluctuations in the energy market, making it a great choice for businesses that want to limit fluctuations in operational costs. However, these plans lock you into a contract, which means you’ll have to pay an early termination fee (ETF) if you terminate your plan before the term ends.

Variable-rate

With this plan type, the price per kWh you pay may change monthly based on the energy market. Variable-rate plans may mean high rates for your business when prices spike due to increased demand and extreme weather conditions. A variable-rate plan may be a good fit if your business has a flexible budget and can adjust energy usage based on market conditions. They’re also a good short-term option, as you can cancel anytime without paying an ETF.

Block-rate

Block-rate energy plans allow businesses to purchase a specified amount of energy at a fixed rate, with additional energy usage billed at the current market rate. The fixed block rate helps your business predict energy costs, and you may benefit from rate drops on additional usage. However, you risk higher rates when the market swings the other way. A block-rate plan may be a good option if you are conscious of your business’s energy usage patterns and flexible enough to handle the market risks.

Indexed-rate

Indexed-rate energy prices include the index price and fixed adder. The indexed price fluctuates based on a benchmark of market conditions, while the fixed adder is a consistent rate from your small business electricity supplier. You may save money if your business adjusts operations based on energy prices, but a fixed-rate plan may be better if you can’t tightly manage electricity usage.

While your energy plan type determines costs and features, usage rates define how you pay for energy used. Two common types of usage rates include time-of-use (TOU) and non-time-of-use (non-TOU) rates. Here’s how these two types of business rates for electricity can affect your costs.

Time-of-use rates

Prices change throughout the day based on energy demand with a TOU rate. Peak hours, like weekday afternoons, have higher rates due to higher demand. Off-peak hours, like late nights or weekends, often have lower rates. TOU rates are ideal for businesses that can adjust usage to match off-peak hours. For example, a manufacturing company running operations overnight may save on electricity costs with lower nighttime electricity rates.

Non-time-of-use rates

With a non-TOU rate structure, rates are consistent throughout the day. Non-TOU rates provide predictability and stability because the rate is constant. While you may not experience savings during off-peak hours, non-TOU rates offer stability and simpler budgeting for small businesses.

Commercial electricity plans come with a lot of fine print. Before signing a contract, keep these important considerations in mind:

• Early termination fees: Commercial contracts often carry higher ETFs than residential plans if you end the contract early. Consider contract length carefully.
• Credit requirements and deposits: Businesses may face stricter credit checks, and some providers may require a larger deposit to begin service.
• Minimum usage fees: Certain plans charge extra if your business uses less electricity than expected, which can be a problem for seasonal or fluctuating operations.
• Demand charges: If your business uses heavy equipment or has sudden spikes in usage, demand charges can add significant costs that outweigh low per-kWh rates.

Once you understand the different plan types and rate structures, the next step is choosing the option that best fits your business. A few key factors to weigh when conducting an electric comparison for business include:

• Budget predictability vs. market opportunity: Many small businesses rely on steady cash flow and prefer cost stability. In that case, a fixed-rate or block-rate plan can make budgeting easier. On the other hand, businesses that can adjust their energy use to market conditions may save more with variable or indexed plans.
• Contract length considerations: Business energy contracts often run longer than residential ones — sometimes as long as five years. A longer term can lock in a good rate for stability, but it reduces flexibility if market prices fall or your business needs change. Consider your growth outlook before committing to a small business electricity plan.
• Operating hours: Your business schedule should guide your plan choice. A café open evenings and weekends could benefit from a TOU plan with cheaper off-peak rates. In contrast, an office that operates weekdays from 9:00 a.m. to 5:00 p.m. may find a non-TOU plan with steady pricing more practical.

The bottom line? Carefully matching your business energy plan with your operational profile will help you balance savings with reliability and protect your bottom line. A Choose Energy expert can help you work through these factors to make the best choice for your business.

Energy demand is typically lower in the spring and fall seasons due to mild weather conditions. When temperatures are extremely hot or cold, demand is higher because heating systems or air conditioners are used more frequently. The best strategy is to secure a low small business electricity rate during the spring or fall.

Cutting electricity consumption is one of the best ways to manage your business energy costs. You can save energy as a small business by:

• Maintaining your heating and air system: Regular maintenance of your heating and air conditioning systems ensures they operate properly. Inefficient or blocked systems must work harder, resulting in higher energy bills.
• Using smart thermostats: You can remotely program and adjust your thermostat to specific temperatures whether you’re in or out of office.
• Making energy-efficient upgrades: Install LED lights and ENERGY STAR appliances to increase energy efficiency.
• Installing solar panels: Consider offsetting your electricity usage with renewable power from solar panels.
• Shopping the best rates with Choose Energy: Use the Choose Energy marketplace to find the best small business electricity prices. Contact our expert team to learn about energy plan options in your area.

What are the best rates for business electricity?

The average U.S. business energy rate is currently 14.15 cents/kWh. Our experts can connect you with providers offering cheaper rates. When picking the best rate and plan, consider the plan type and usage rate as well as your business’s energy consumption patterns.

Who is the cheapest small business energy supplier?

The cheapest small business energy suppliers vary depending on your electricity usage and location. Choose Energy can help you find the cheapest business electricity options for your unique energy needs. Call the number on this page or fill out the form for small business energy quotes from providers like Ambit Energy.

Is business electricity cheaper than residential energy?

Yes. Commercial electricity rates are cheaper because businesses use significantly more energy than residential homes, so you can buy in bulk. On average, residents use about 855 kWh per month, over seven times less than businesses (6,054 kWh/month).