What are bespoke retail tariffs?

Retailers offer specific tariffs either for different customers or to encourage particular behaviour (for example "Time of Use" tariffs). The structure of the tariff can rewards or discourages particular behaviour, such as shifting energy usage into the middle of the day when solar is operating, or reducing consumption at busy times when energy is most expensive. Most retailers also offer general tariffs with the same charge all the time. This creates cross-subsidies between customers because everything is averaged.

Partnering with a retailer to create bespoke tariffs is one way to match local value with local customers. This would require an agreement with a retailer who can manage your relationship with the wholesale electricity market and customise local deals for local electricity supply and demand.

Some challenges of setting up bespoke retail tariffs

While some small retailers may experiment with bespoke tariffs while they are getting established, community groups generally do not have the scale required to entice a retailer into such an arrangement. Retail pricing models are complex and costly to understand and set up. It would usually be a lot effort to make changes to tariffs unless the scale of the opportunity is very large.

When is setting up bespoke tariffs a good choice?

Bespoke tariffs are only likely to be possible if working with new entrant retailer that are trying to find their market positioning. Alternatively, a partnership with an innovator (such as peer-to-peer trading), may entice a retail partner to establish a tailored offering to support this model, if they see future scalability of the model.

In practice, it is best to understand the landscape of retail offers – which are constantly evolving – and align your group’s needs with a suitable retail partner (see Partner with a Retailer).

Project examples for bespoke tariffs

See the Heyfield energy retail business model report [ADD LINK] for a summary of some of the retail tariff types and offerings reviewed in 2022/23 and how these aligned with Heyfield’s needs.