Commercial energy sources are the sources of energy used by the commercial sector, offices, shops, schools, hospitals, data centres, farms and warehouses, to generate electricity, provide heating and cooling, and keep operations running. In Australia, the commercial energy mix spans fossil fuels and renewable energy sources. The right mix affects your energy costs, energy usage, energy performance, and carbon emissions.
The main commercial energy sources in Australia
Fossil fuels (conventional energy)
Fossil fuels remain a major source of power generation and thermal energy in developed grids. In the commercial mix you’ll encounter:
- Natural gas: used for space heating, hot water, commercial kitchens, and some power sector onsite generation (cogeneration). Gas can be cost-effective for consistent thermal loads and offers fast response in peak conditions.
- Crude oil derivatives (diesel, LPG): common for backup generators, remote sites, and rural areas beyond the reach of pipelines or stronger grid connections.
- Grid electricity from coal and gas plants: even as renewable sources grow, part of the grid supply still comes from conventional energy.
Pros: predictable output, established supply chains, high installed capacity across the grid.
Cons: carbon footprint, greenhouse gases, exposure to energy prices volatility.
Renewable energy sources
Solar energy
Commercial solar panels have become a go-to option to generate electricity onsite and lower daytime energy bills. Solar can be cost effective where loads align with sun hours, such as retail and offices with high daytime energy needs.
Pros: falling costs, pollution free at the point of use, trims energy consumption from the grid, can support lower energy bills.
Cons: output varies with weather and season; initial cost; you’ll still need grid or storage for evenings and cloudy periods.
Wind energy
Wind turbines supply grid power at an increasing scale. While onsite wind in urban areas is uncommon, many businesses source wind power via retail contracts, electricity market products, or corporate PPAs with a share of renewable energy from wind.
Pros: strong contribution to decarbonising grid power generation; stable long-term output profiles in good wind regions.
Cons: location-dependent; not typically viable inside cities; energy procurement is more about contracts than onsite build.
Biomass energy
Biomass energy turns organic material into heat or electricity. In Australian settings this includes agricultural waste (crop residues), animal manure, wood chips, and food processing by-products. A biomass energy system can serve farms, food processors, and regional facilities seeking to meet energy needs and reducing waste at the same time.
Pros: dispatchable renewable heat and power, can reduce waste handling costs, useful in rural areas.
Cons: fuel logistics, emissions controls for combustion, and project-specific feasibility.
Hydro and other renewable energy technologies
Large-scale hydro contributes to grid stability, while newer renewable energy technologies (such as bio-gas from wastewater) appear in niche commercial purposes. Most commercial users access these through the grid or via green purchasing options.
Commercial energy sources in Australia
Australia’s commercial energy market is in transition. Businesses draw on grid electricity, onsite solar energy, and gas. The energy market design, retailer offerings, and policy settings from the Australian Government shape available tariffs, renewable options, and incentives.
The International Energy Agency publishes updates on energy consumption trends for developed countries, and those trends show a significant increase in renewable energy share across power generation and procurement.
The upshot: most commercial buildings should plan for a rising share of renewable sources in their contract mix and consider onsite solar panels or biomass energy where feasible.
Why the right energy mix matters
Energy supply and reliability
Your energy supply should match load profiles. For offices and retail, daytime electrical energy demand aligns well with solar. For hospitality, gas may suit kitchens. For refrigeration, consider tariff structures and backup for critical loads.
Energy costs and prices
Energy costs flow from both the source and the tariff. Retail energy prices include network charges, demand charges, and time-of-use rates; peak, shoulder, and off-peak. Choosing sources that reduce peak energy use (or shifting usage) helps curb bills. Onsite solar reduces grid imports during high-price periods; better controls push loads to off-peak windows.
Environmental impact
The energy mix affects carbon emissions, greenhouse gases, and your carbon footprint. Switching a portion of supply to renewable energy sources and improving energy efficiency reduces both emissions and cost risk linked to future policy or stakeholder expectations.
How energy flows through a commercial building
The load profile
Commercial loads include HVAC (air conditioning and ventilation), lighting, plug loads (electrical appliances, IT), hot water, and process loads (e.g., kitchens). Mapping energy usage across the day highlights where primary energy becomes electrical energy or heat, and where energy produced onsite can offset imports.
Metering and smart grids
Smart meters, building analytics, and smart grids integrate onsite power generation (like solar panels) with grid supply. Better data enables alerts, fault detection, and decision-making on energy efficiency projects.
Practical ways to choose and use commercial energy sources
Start with an energy review
- Examine energy consumption by area (HVAC, lighting, refrigeration, servers).
- Check tariff details and intervals for electricity and natural gas.
- Note opportunities for improving energy efficiency and reducing waste (for instance, controls that avoid overnight drift in HVAC).
- Compare energy bills against peers or existing buildings of similar size; plan upgrades in new buildings.
Tackle energy efficiency first
Cutting waste boosts the return on any supply change:
- Energy efficiency upgrades: LED lighting, building sealing, variable speed drives, set-point tuning for air conditioning, better insulation, and advanced controls.
- Energy performance standards: track NABERS or similar ratings to verify gains.
- Commissioning and maintenance improve the lifespan of electrical appliances and chillers.
- Power factor correction can reduce network charges for some sites.
This work lowers the size of any installed solar panel project and reduces the initial cost for generation and storage.
Assess onsite generation options
- Solar energy: Roof condition, shading, structure, and load alignment determine design. Many sites consider 30–100% daytime coverage; some add batteries to shave peaks or support resilience.
- Biomass energy system: Where you have steady streams of agricultural waste or animal manure, a small anaerobic digester or biomass boiler can meet thermal loads and cut organic disposal.
- Backup generators: Diesel remains common for critical loads; evaluate run limits, emissions controls, and fuel storage.
Plan procurement in the electricity markets
- Retail contracts: Compare fixed vs. market-linked plans, peak and off-peak structures, and environmental attributes.
- Renewable supply: Green products, large-scale generation certificates, or direct offtake anchored in renewable energy.
- Risk management: Diversify contract terms and review hedging options with advisors.
- Demand response: Curtail or shift flexible loads during price spikes to manage energy costs.
Electrify wisely
As grids decarbonise, replacing gas end uses with high-efficiency electric options can lower the carbon footprint and simplify operations:
- Heat pumps for space and water heating
- Induction for commercial kitchens
- Electric fleet charging paired with installing solar panels where suitable
Make sure to check energy performance and tariff impacts before switching.
If you’re mapping commercial energy sources in Australia, we can help you shortlist options, model savings, and set a step-by-step plan. Book a quick call with our energy brokers to review your tariffs, load profile, and building data. You’ll walk away with a clear roadmap for lower energy bills, better energy performance, and a practical path to add renewable energy, from installing solar panels to green supply contracts.
Commercial energy sources FAQs
Are renewable energy sources reliable for the commercial sector?
With the grid’s installed capacity growing in renewable energy, reliability now rests on a blend of sources, market tools, and storage. Onsite solar in addition to the grid gives most businesses stable supply. For critical operations, backup systems remain part of the plan.
Is biomass viable for small scale sites?
A small scale biomass energy system can work where you have steady feedstock, common in agriculture and food processing. For standard offices or retail, rooftop solar often delivers faster wins with less complexity.
