What is an energy broker?

An energy broker is a third party that arranges business energy contracts on your behalf. They sit between you and the suppliers, gather prices across the market, handle the paperwork, and set up the contract you choose. They don’t generate or supply the energy themselves. They find and arrange the deal, and the supplier delivers it.

For most UK businesses, a broker exists to save time and widen the choice you’d see if you rang round suppliers yourself. This page explains what a broker is, what they do, how they get paid, how the sector is regulated, and how to tell a good one from a bad one.

What an energy broker actually is

A business energy broker compares contracts from a range of suppliers and arranges a new one for you. You give them your usage and a few details about your premises. They approach the suppliers they work with, pull back prices, and present the options. When you pick one, they handle the switch.

The energy itself doesn’t change. The same gas and electricity comes down the same pipes and wires whether you sign through a broker or go direct. What changes is how much of the market you see and how much of the legwork lands on your desk.

Broker, supplier or comparison site?

We compare these side by side in our guide on an energy broker versus a comparison site.

What a broker does, step by step

The mechanics are fairly consistent across the industry. There’s more detail on what an energy broker does, but here’s the shape of it.

How brokers get paid

Most brokers don’t charge a separate fee. They’re paid a commission built into the unit rate of the contract they arrange. If a supplier’s underlying rate is 24p per kWh, the broker might add an agreed uplift of 0.5p, so you’re quoted 24.5p. The supplier collects that and passes it back as commission.

On 40,000 kWh a year over a three-year contract, a 0.5p uplift works out at roughly £600 across the term. There’s nothing wrong with commission in itself. What matters is that you can see it. We set ours out openly on how we make our money, and a broker who won’t tell you theirs is one to be wary of.

How brokers are regulated

Energy brokers aren’t licensed the way suppliers are. There’s no equivalent of the supplier licence for a third-party intermediary, and no single body that signs off who can operate. Anyone can set one up, so the protections are thinner than people assume.

Ofgem regulates the suppliers and has been tightening the rules that reach brokers indirectly, most visibly through the push for commission disclosure. Microbusinesses also have a route to the Energy Ombudsman through an alternative dispute resolution scheme, as long as the broker has signed up. Checking for ADR membership is one of the quickest ways to gauge how accountable a broker is.

The letter of authority

At some point a broker will ask you to sign a letter of authority, or LOA. It lets them speak to suppliers on your behalf and access your account details, which is normal and necessary. Check what it authorises, though. A good one lets the broker gather information and arrange contracts you’ve approved. It shouldn’t let them sign you into a deal without your say-so, and it shouldn’t run indefinitely.

Broker, consultant, or going direct

A broker arranges contracts and is paid commission. An energy consultant offers wider advice, like efficiency reviews and bill validation, and is more likely to charge a fee. The consultant versus broker comparison goes into the distinctions. You can also deal with suppliers yourself, though going direct shows you one supplier’s prices at a time. The honest case for each is in using a broker versus going direct.

Key terms at a glance

How to choose a broker you can trust

Because the sector isn’t tightly regulated, vetting a broker falls to you. It doesn’t take long, and a few checks filter out most of the firms you’d regret using.

• Ask directly how they’re paid and how much commission is in the contract. A good broker answers without flinching.
• Check they’re signed up to an ADR scheme, so you’ve somewhere to go if things go wrong.
• Read independent reviews rather than the testimonials on their own site.
• Confirm they’re a real, registered company before you hand over a letter of authority.

There’s a full walkthrough in how to choose a business energy broker, and a separate checklist for checking a broker is legitimate.

Red flags worth watching for

• Pressure to sign quickly, well before your current contract ends.
• Promises of the cheapest rates or guaranteed savings, which no honest broker can stand behind.
• Reluctance to put their commission in writing.
• A claim to compare the whole market that always lands on the same one or two suppliers.

When a broker is worth it

A broker earns their commission when your spend is large enough that the time saved and the prices accessed outweigh the uplift, and when you’d rather not chase suppliers yourself. Multi-site businesses, anyone on half-hourly meters, and firms that forget renewal dates get the most from one. If your usage is small and on a single simple meter, going direct may suit you just as well.

For the full picture, read our guide on whether energy brokers are worth it.

How Clearsight works

We’re a business energy broker, and we’re upfront about being a third-party intermediary paid through the contracts we arrange. We compare across the suppliers we work with, explain the contracts in plain terms, and handle the switch so your supply carries on without a gap. We also stay involved afterwards, tracking renewal dates and querying bills that don’t look right. You can read what customers say on our reviews page, see the recognition on our awards page, or start with our business energy service.