Want to get cheaper energy rates for your business? A business energy broker can be a great tool for saving hundreds to thousands on your essential business bills. If you’re operating within time restraints, an energy broker can save valuable time you can spend focusing on your business.
What is an energy broker?
Energy brokers help their customers procure wholesale electric and gas from suppliers. They can usually get energy contracts at a cheaper rate as they get business rates from the supplier who only aim to cover their base costs.
Responsibilities of an energy broker:
Negotiating your contract
Your energy broker can negotiate your contract. This ensures
your business benefits from a tailored contract.
Market comparison
Energy brokers will have many suppliers they can collect rates from. As the market changes daily, your broker will be on the lookout for the most suitable rates.
Managing your switch
When switching suppliers, your energy broker will take care of scheduling, and address any issues that come up during the switch.
Contract renewal
When you come towards the end of your contract, your energy broker will remind you that your contract is up for renewal. They will advise you if you should switch supplier, change tariff or add a smart meter for your expanding business.
Resolving bill disputes
If you have used an energy broker to secure your contract, they can work on your behalf even helping to sort out any billing disputes or discrepancies.
Cost recovery
If you’ve been billed for services you haven’t actually used, an energy broker can step in to help you get your money back.
Business energy management advice
Energy brokers can advise you how to be energy efficient, including energy consultancy service.
Questions to ask a business energy broker:
How many suppliers do you compare?
Choosing an energy broker that has a vast array of suppliers can ensure you get more competitive rates. When the energy market inevitably changes, comparing rates will be much easier when you have a large variety of suppliers in one place.
What are your customer reviews like online?
A good energy broker will have a reputable brand and happy customers. Make sure you check their website or their social media to see what their customers are saying!
How clear are the terms of their Letter of Authority?
A Letter of Authority (LOA) from your energy broker should include:
Identification – Important details of the broker and your business should be clearly identifiable and includes: names, addresses, and contact details of both parties involved.
Granting Authorisation – Clearly defining that your business allows the broker to act on your behalf in energy-related matters.
Duration period –How long the LOA is valid. This should be in line with the span of your contract.
Signature – The LOA requires the signature of both parties.
Does the broker have a direct relationship with suppliers?
Most energy brokers do not have a direct relationship with their suppliers and go through a third party to organise these contracts. These people are called aggregators. Quite often, many suppliers will not want to work with small or new energy brokers as they do not believe they have enough customers within their reach. This is where aggregators come in. They act as a bridge between suppliers and energy brokers helping to increase the reach of energy brokers so they can access more suppliers. More suppliers means more competitive rates!
How transparent are energy brokers about their commission structure and fees?
Business energy brokers are legally required to disclose how much they are making from a microbusiness. This has been in place since October 2022. The extra costs must be included in the Principal Terms which must be provided to the microbusiness by the broker/TPI. Also it must be disclosed before the microbusiness enters the contract.
However, another angle that some brokers may take is to directly invoice the microbusiness to which you can negotiate.
If you source your energy contract through a supplier’s internal sales team, then the final price includes all costs, and there are no additional expenses.
How do energy brokers make money?
Obviously no service is free and that’s the same for energy brokers. Energy brokers make their money through commission. The amount they can earn depends on several factors such as: the type of energy contract, the length of the contract and how much they have uplifted the unit rate per kwh. Their earnings, through commission, really depends on the usage of the site. Commission is billed with the energy contract, so your monthly payment will include the energy you’re paying for and part of the commission your broker makes.
Do I need an energy broker for my business?
The real question is: can you benefit from the amount saved through an energy broker? This depends on the scope of your business. If you own a small shop with short opening hours, the chances are you won’t be saving too much. However, if you own a massive site like a manufacturing business, you should definitely consider using an energy broker. You’ll most likely be running expensive, high voltage machinery constantly, and you could find yourself in a position where an energy broker can save you thousands.
Another thing worth remembering is that energy brokers are not always energy consultants. Energy brokers strictly find the right supplier and rate for your business whereas energy consultants offer business energy advice. Sometimes you can find TPI’s that offer both of these services- like us!
Contact us to find out how much you could save on your business energy bill
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