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Business Energy brokers are all over the UK, and you may wonder whether you should use a business energy broker or go directly to a business energy supplier. In this article, we talk all about the word of energy brokers.
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What is a business energy broker?
An energy broker is a company that works as an intermediary between you and business energy suppliers.
They search the market on your behalf and collect business energy quotes from suppliers. They will then organise your contract and ensure a smooth transition from your current supplier to your new one.
How do business energy brokers make money?
Business energy brokers earn a commission on contracts they arrange, which the business energy supplier pays.
This is usually paid as an amount per unit of energy (kWh) you use. For example, they may add an uplift to your unit rate or your standing charge.
It’s important to know that the unit rate you are provided by your energy broker, including the uplift, is usually cheaper than a unit rate you would get directly from the supplier, as brokers get preferential rates from suppliers.
Get business electricity rates per kWh.
Are business energy brokers trustworthy?
Energy brokers can be very trustworthy, and as per Ofgem, business energy brokers are duty-bound under the law of the agency to disclose commissions to their customers. It’s important to ensure you read all of your documents carefully and ask the question regarding commission earnt.
Is it cheaper to go direct to the supplier?
Business energy brokers can get preferential rates from suppliers due to the amount of business that they provide.
Even with their commission added, the rates you receive can be much better than going directly to a supplier.
There’s no harm in checking to see what rate a supplier can offer directly.
What are the benefits and disadvantages of using a business energy broker?
When looking at the pros and cons of using commercial energy brokers, there are a few things to consider.
Advantages of using a business energy broker
The advantages of using an energy broker are:
- Expert knowledge: Access to expert knowledge in a complicated market.
- Saves time: An energy broker will save you time as they do the hard work for you.
- Comparison of the whole energy market: Energy brokers have access to a wide range of suppliers, so they can get a wide comparison quickly for you.
- Bespoke rates: They have great relationships with suppliers, so they are able to negotiate bespoke rates for your high energy usage.
- Strong relationships: Energy brokers have strong relationships with business energy suppliers, so they can quickly resolve any issue that may arise.
Disadvantages of using a business energy broker
- Dodgy brokers: Look out for unscrupulous brokers with a lack of transparency on their commissions earned.
- Limited access to suppliers: Some brokers may only have access to a limited number of suppliers, so you may not get a whole of market quotes. Check which suppliers they have relationships with.
- It costs you: Using an energy broker is not free to you; an energy broker gets paid by the supplier for helping you, and this comes at a cost to you throughout your contract.
- Finding an energy broker: Finding a reputable energy broker can be time-consuming, but we have you covered here at AquaSwitch. We ensure we have a fully transparent, highly rated comparison service and have no hidden costs. (Access our business energy comparison here).
- Favouritism: Some energy brokers may have a favourite supplier to use as they pay better or offer incentives. Ensure you check commissions added to all quotes, as some brokers may add more commission to a certain supplier to make them more expensive than their favourite.
Business energy brokers – FAQs
Here are some of the frequently asked questions about business energy brokers.
How many energy brokers are there in the UK?
There are currently 1,731 energy brokers registered in the UK – these can be found on the ombudsman services website, and you can search to make sure the energy broker you plan on using is on there.
Are business energy brokers accredited?
Business energy brokers do not need to be accredited to trade in the UK.
Ofgem has recently set up a dispute resolution service for any issues you might have when using a business energy broker. Learn more about the complaints process here.