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- Excellent customer service
- Cheaper fixed energy rates
- A hassle-free supplier switch
What is a business energy broker?
A business energy broker is an independent expert who finds and arranges energy contracts on behalf of a commercial user. Instead of going supplier by supplier, you deal with one broker who searches the market for you and handles the paperwork.
Here’s what that means for your business.
Supplier relationships
Business energy brokers have relationships with numerous business energy suppliers across Britain. They use these relationships to help their customers arrange energy contracts.
A range of quotes
A broker can provide a range of quotes to connect your business with the best possible deals, sparing you the hassle of speaking to individual suppliers.
Avoid the loyalty penalty
There is a significant loyalty penalty in the business energy sector. If you don’t regularly switch and actively seek out the best deals, you’ll end up paying unnecessarily high energy prices.
How do business energy brokers work?
Energy suppliers rarely publish their fixed business energy prices, so finding a good deal on your own means calling each one, repeating your details and waiting for quotes to trickle in. A broker takes all of that off your hands. Here’s what happens behind the scenes:
Supplier panels
A good broker works with a panel of trusted business energy suppliers through formal introduction agreements. This gives them direct access to pricing you won’t find online, in return for a broker commission the supplier pays.
Collecting your quotes
Share your energy details, sign a Letter of Authority (LOA), and your broker does the rest. Their quoting software pulls prices from across their panel, often in seconds for smaller businesses. Sites with half hourly meters need bespoke pricing, which usually takes a few days.
A managed switch
Pick the quote that suits you and your broker will help you switch business energy supplier by arranging the contract with your new provider. Most switches are completed within 4 to 6 weeks, with your broker chasing progress and resolving any issues so you don’t have to.
How business energy brokers get paid
Most business energy brokers assist you through the burdensome process of gathering quotes, securing the best deal, and switching suppliers without directly charging you.
Business energy brokers, however, do receive a commission from the work they do paid by the energy supplier. It’s important to know that your business indirectly pays this if you use a broker to arrange a contract for your business. Here’s an explanation of how this works.
When a broker successfully facilitates your switch to a new energy supplier, the supplier gaining your business will pay the broker a commission. This commission is incorporated into your business energy contract as an additional cost per kilowatt-hour (kWh) for electricity or gas.
For microbusinesses, the indirect commission received by brokers must be explicitly included within the written terms a supplier sends you. This information must be presented as a total cost in pounds and pence.
Source: Ofgem – TPI’s – what your microbusiness needs to know.
To understand exactly what to look out for, here’s an extract of the relevant section of a business energy contract:
An extract of a business energy contract brokered by AquaSwitch.
The broker’s commission may not be explicitly stated within your contract for medium and large companies. However, we strongly recommend inquiring about this with your business energy broker before finalising your contract.
What services do business energy brokers offer?
Finding a new contract is only part of what a broker does. Many brokers support your business long after the switch, helping you manage your energy and keep costs under control. Here are some of the services you can expect.
Multi site contracts
If your business operates from more than one property, a broker can bring your sites together under a multi site energy contract with a single renewal date. This makes your energy far easier to manage and budget for.
Bill validation
Many brokers check your business energy bills for errors such as incorrect rates, estimated readings or wrong standing charges. If something doesn’t add up, they’ll chase your supplier to put it right.
Other business utilities
Some brokers go beyond gas and electricity, helping you compare business water prices and other utilities. That way, you can manage everything through one trusted contact.
Is using a business energy broker right for you?
Brokers are paid indirectly through your energy rates, but the savings they find often outweigh the cost. In fact, a 2021 government report found that most SMEs use one.
Ideal for SMEs
Brokers are set up to serve SMEs, from single shops to growing businesses with a handful of sites. If you don’t have an in-house energy manager, a broker gives you that expertise without the cost of hiring one.
Market timing
Business energy prices track wholesale energy prices, which can change daily. A broker keeps an eye on the market and can advise on when to fix your rates, helping you avoid locking in at a peak.
Clear contract terms
Energy contracts can be full of unfamiliar terms, from pass-through charges to business energy standing charges. A broker talks you through what each quote includes, so you know exactly what you’re signing up to.
Key information before speaking with a business energy broker
Having these details to hand will make getting business energy quotes from your broker much quicker.
Site addresses
Energy contracts are tied to specific properties, so start with the address of each site and whether it uses electricity, gas or both.
Contract end dates
Most business energy contracts charge a termination fee to leave early. Knowing your end dates means new quotes can be lined up to start the day your current contract finishes.
Annual usage
Quotes are based on standing charges and unit rates, so an estimate of your yearly electricity and gas use helps your broker find the most cost-effective deal.
Recent bills
A recent bill for each site gives your broker your current rates, supplier and meter details in one place. It’s also the quickest way to see how much you could save.
Business details
Suppliers usually run a credit check before offering a contract. Have your registered company name, company number and business type ready to keep things moving.
Choosing the right business energy broker
There are plenty of brokers competing for your business, so it pays to ask a few key questions before you sign anything.
Supplier panel
No broker works with every licensed supplier, so ask for a list of the business energy suppliers they work with. A wider panel gives you a better chance of finding the right deal.
After service
The best brokers stay in touch after your switch. Ask whether they’ll keep you updated as business electricity prices and business gas prices move, and how they’ll handle your next renewal.
Commission
A good broker will be upfront about what they earn. Ask how much commission is built into your quote before you agree to anything, so you can judge the deal fairly.
Business energy brokers – FAQs
Our business energy experts answer those commonly asked questions regarding business energy brokers.
Should I choose a business energy broker or an energy consultant
An energy consultant is a viable option for businesses that consume large quantities of electricity. Unlike a broker, an energy consultant will charge your business directly for their services, which may result in higher costs. However, they offer several benefits beyond those provided by a broker, including:
- A Genuine Whole-of-Market View: Since they do not rely on commissions from specific suppliers, energy consultants can offer an unbiased overview of your energy options.
- Direct Advice on Reducing Consumption: They can provide tailored advice on lowering your business energy consumption and bills, utilising business energy monitoring software.
- Continuous Bureau Services: Energy consultants can offer ongoing services to validate all the business energy bills your company receives, ensuring accuracy and efficiency.
Are business energy brokers accredited?
Business energy brokers are accredited by the Energy Ombudsman. The Energy Ombudsman is approved by Ofgem to impartially handle disputes between customers, brokers and energy suppliers.
The Energy Ombudsman provides a broker search function on their website that you can use to check that your energy broker is accredited.
Ofgem does not specifically license business energy brokers but has published a set of voluntary principles they should follow. Ofgem does pursue brokers in cases of breaches of misleading marketing practices under consumer protection laws.
How many energy brokers are there in the UK?
There are currently 1,985 accredited business energy brokers in the UK. These brokers are listed on the Ombudsman Services website, where you can conduct a search to verify the accreditation of the energy broker you are considering.
Source: Energy Ombudsman – Energy Brokers Register
Do businesses have to sign a contract with an energy broker?
Yes, in order for a business energy broker to help arrange for a new business energy contract, it’s necessary to sign a letter of authority (LOA).
While the LOA does not obligate your business to pay any brokerage fees, it is a legal document that authorises the broker to communicate with business energy suppliers on your behalf. This authorisation is a crucial component of the quotation, negotiation, and switching processes.
Can businesses negotiate directly with energy suppliers without a broker?
Yes absolutely. It’s possible to request business energy quotes from business energy suppliers directly. There are over 100 licensed suppliers in the UK, so we recommend reading our guides to business energy and business gas suppliers to choose the best suppliers to negotiate with.
Alternatively, using an online business energy comparison service, you can quickly and easily get quotes from across the market.
Do energy brokers work with businesses of all sizes?
Business energy brokers specialise in helping the end needs of SMEs. Large business energy users typically opt to work with an energy consultant rather than a broker; industrial users may even have this function in-house.