What does an energy broker do?

Businesses don't always have the time or expertise to navigate volatile energy markets alone.

Buying business energy can be complicated. There are multiple suppliers, contract types, pricing structures and terms to consider.

An energy broker helps customers compare options, understand contracts and manage the procurement process.

But not every broker offers the same service. In this guide, we explain what energy brokers do, how they make money and what to consider before choosing one.

In this article:

• Learn what an energy broker does.
• Understand how energy brokers can impact your business.
• Discover the benefits and drawbacks of using an energy broker.

What does an energy broker do?

An energy broker acts as an intermediary between businesses and energy suppliers.

There is no one-size-fits-all solution for business energy procurement. First, a broker should help businesses understand the energy market enough to make an informed decision that suits their current situation.

Brokers should present options to prospective customers and explain contracts without rushing or pressuring businesses into deals they don’t understand.

Once a contract has been agreed, brokers should work to implement the switch (or renewal) and provide ongoing support to ensure a smooth transition.

How does an energy broker work?

Each broker works differently, but they should follow a similar journey:

1. Understand your contract and usage: Brokers should take time to understand your business and your current energy contract. Reviewing current terms is important, but knowing your usage is even more crucial at the first stage, so they can identify a contract that suits your specific business. 
2. Establish a timeline: Once your renewal window has been identified, brokers should provide you with a guide to the process, including how long each stage is likely to take.
3. Compare the market: At this stage, brokers will approach their panel of suppliers with your needs to obtain prices and contract terms, then develop a few options that may be suited to your business. Meanwhile, you can focus on your daily operations.
4. Present options: Once quotes have been gathered, the broker will present you with their recommendations and options. You should make the final decision. You have the authority and control to select a contract you are comfortable with.
5. Manage the switch: Brokers will begin the process of transitioning to the new contract, coordinating with the chosen supplier to ensure a smooth transition. Once the switch is completed, the broker can provide any agreed ongoing support and help with any final steps.

How do energy brokers make money?

Ultimately, when you use a broker, you are paying for a service. Depending on the broker's remuneration model, this may be through a direct fee, supplier commission or another arrangement.

If working under a commission model, the broker or consultancy will add an uplift to your unit rate. You will pay your bill as usual, and the broker receives their commission from the supplier.

It is important that you ask your broker how they are paid. You deserve to know where your money is going and what services you are paying for.

If you are less confident navigating volatile energy markets or simply don’t have the time or resources to do so, a broker’s expertise could be invaluable.

If you are struggling to find time in a working day, a broker can take much of the legwork out of energy procurement, freeing you to focus on running your business.

Five benefits of using an energy broker

1. Save time: Brokers handle research and supplier conversations.

2. Market knowledge: They make sense of complicated energy markets.

3. More choice: Potential access to multiple suppliers and contract options.

4. Negotiation: Experienced brokers may be able to negotiate commercial terms with suppliers on your behalf.

5. Support: Depending on the service, brokers can help with administration, supplier communication and ongoing account management.

Three considerations before using an energy broker

1. Understand the costs: As we have mentioned, find out precisely how brokers earn their money. Are they being transparent?
2. Understand the service: Do they have access to a broad range of suppliers, and are they transparent about any commercial relationships? How far does their service extend? What support do they offer? Know what you’re paying for.
3. Understand the broker: Finally, not all brokers are created equally. Do they listen to your concerns? Do they understand your business and remain willing to support you after the contract is signed?

This article concludes our Business Energy Basics series. Now read our Renewable Energy Basics articles...

How we can help

Business energy is complex. We get it. We can support you.

Troo exists to help businesses make sense of their energy needs. We simplify information and help you make smart decisions that manage costs and lead to real change.

We are not here to sell you a quick fix. We're here to understand what matters to you, offer clear advice, and take ownership of the hard parts, so energy becomes one less thing to worry about.

Book a free energy health check today for practical advice on business electricity, gas and water procurement, renewable consultancy and our ongoing management services.