Finding a new energy contract can feel like a straightforward task: compare a few prices, choose one and get it sorted. But once you start looking, you quickly realise that there is more to the process than comparing numbers.
So what is the right way to find a business energy contract? Should you speak to suppliers directly? Would a broker make things easier? And if a broker is involved, who are you actually signing your contract with?
These are crucial factors to explore before making a decision. A business energy broker and an energy supplier serve very different purposes, and understanding those roles can help you make sense of the options available to your business.
In this guide, we will look at energy broker vs supplier, what each one does, how they differ, and what to consider before agreeing to a business energy contract.
What Does a Business Energy Supplier Do?
An energy supplier is the company your business enters into an energy supply contract with. It delivers electricity or gas and manages your account throughout the contract.
Your supplier is responsible for:
- Providing your agreed tariff
- Billing your business for its energy use
- Managing your account
- Handling billing and supply queries
- Providing information about your charges and contract
Energy suppliers operating in Great Britain must hold the appropriate licence and comply with rules set by Ofgem, the UK’s energy regulator.
If you arrange your contract through a broker, your broker does not become your energy supplier. The contract is still with the supplier named in your agreement.
What Does a Business Energy Broker Do?
A business energy broker acts as an intermediary between businesses and energy suppliers. Rather than supplying gas or electricity themselves, brokers help businesses compare available options and arrange an energy contract.
A broker may:
- Request quotes from suppliers
- Compare tariffs and contract terms
- Explain different options
- Help with the switching process
- Arrange a contract on your behalf
Energy brokers are commonly known as Third-Party Intermediaries (TPIs). The wider TPI sector also includes other businesses that help customers compare or arrange energy contracts.
For a business that does not have the time to contact suppliers individually, a commercial energy broker can make the process more convenient. However, brokers can work with different panels of suppliers, so it is important to ask which suppliers they can approach.
Energy Broker vs Supplier: Understand the Difference
The easiest way to understand the energy broker vs supplier difference is simple:
The supplier provides the energy. The broker helps you find and arrange the contract that aligns with your business needs.
Let us simplify it. When your current energy contract is approaching its end, you can contact suppliers yourself and ask for quotations. You can then compare the offers and choose one directly.
Alternatively, you can ask a business energy broker to obtain quotes from suppliers on your behalf.
Either way, your energy supply comes from a licensed supplier, and your business energy contract is with that supplier.
Supplier vs Broker at a Glance
| Key Difference | Business Energy Supplier | Business Energy Broker |
|---|---|---|
| Main Role | Delivers business electricity or gas to your premises | Helps businesses compare and arrange contracts |
| Energy Supply | Provides the energy | Arranges the energy contract for you |
| Contract | You enter your business energy contract with them | Helps you find and arrange a contract with a supplier |
| Quotes | Gives you quotes for its own available tariffs | Can obtain quotes from suppliers it works with |
| Billing | Calculates, sends and manages your energy bills | Does not bill you for energy use |
| Supplier Choice | Offers its own tariffs | Compares several suppliers and then offers the options |
| Regulation | Licensed and regulated by Ofgem | Not licensed by Ofgem yet, though wider regulation is being developed |
Going Direct to an Energy Supplier
For some businesses, dealing directly with an energy supplier is the preferred option.
You can approach suppliers yourself, provide details about your energy consumption and requirements, and request quotations. Once you have compared the available offers, you can agree your business energy contract directly with your chosen supplier.
This approach may work well if you:
- Prefer to manage the process yourself
- Already know which suppliers you want to approach
- Have time to compare different offers
- Are comfortable reviewing contract terms
The main consideration is the time involved. You will need to contact suppliers individually, gather their quotations and compare the details yourself.
Business energy prices can also depend on factors such as consumption, location, meter arrangements and contract requirements, so comparing offers involves more than simply looking at one headline rate.
Using a Business Energy Broker
A business energy broker can take much of the comparison work off your hands.
You provide information about your business and its energy requirements, and the broker can approach suppliers within its network to obtain available offers.
This can be particularly useful if you:
- Have limited time to manage energy procurement
- Want help comparing different supplier options
- Are unfamiliar with commercial energy contracts
- Manage multiple business premises
- Have more complex energy requirements
A commercial energy broker may also explain the different elements of an offer, including unit rates, standing charges, contract length and termination terms.
However, it is worth checking how broad the broker’s supplier panel is. A broker may not work with every supplier in the market, so ask which suppliers are included before assuming you are receiving a whole-of-market comparison.
How Do Energy Brokers Get Paid?
This is one of the most important questions to ask before working with a broker.
Brokers are usually paid through a commission from the supplier, a fee paid by the business, or a mix of both. Sometimes you may need to pay these fees upfront, but some brokers may also charge a service fee that is included in the energy bill from your supplier.
Your supplier must provide details of any service fees included in the bill if you ask for it.
Before proceeding, ask:
- How are you paid?
- Will I pay a separate fee?
- Is any commission included in the contract price?
- What services does the fee cover?
Having this information at hand makes it easier to understand the overall cost of the deal and compare the broker’s service fairly.
What Should You Check Before Using a Broker?
A few simple checks can help you understand whether a broker is right for your business.
- Ask which suppliers the broker can approach. This gives you a clearer idea of the range of options available.
- Make sure any fees or commissions are explained clearly before you agree to proceed.
- Find out whether the broker only sources and arranges your contract or whether it provides support after the contract has been agreed.
- You should have the opportunity to review the full terms of your business energy contract before committing.
- Check the unit rate, standing charge, contract length, renewal arrangements, termination terms and any additional charges.
- Ask what process is available if you have a concern about the broker’s service. Smaller businesses should also check whether the broker belongs to an appropriate alternative dispute resolution scheme.
What Regulation Applies to Energy Brokers?
TPIs have certain requirements to meet when working with eligible small and microbusiness customers. This includes being signed up to a suitable Qualifying Dispute Settlement Scheme (QDSS), which gives businesses access to an independent Alternative Dispute Resolution (ADR) process if a dispute arises. Ofgem is also working towards a wider regulatory framework for the TPI sector, aimed at improving transparency and customer protection. As these wider changes are still being developed, it is important to distinguish between the existing QDSS/ADR requirement and the future regulation of TPIs by Ofgem.
Which Option Is Right for Your Business?
There is no universal answer to the energy broker vs supplier question. It depends on how you prefer to manage your energy procurement.
Going direct may suit you if you:
- Want to manage the process yourself
- Have time to contact and compare suppliers
- Know what type of contract you need
- Prefer a direct relationship with your supplier
A broker may suit you if you:
- Want to save time
- Would like help comparing supplier offers
- Need guidance on commercial energy contracts
- Manage multiple sites or more complex requirements
You can also compare both approaches. For example, you could request a quotation directly from a supplier and compare it with options presented by a broker.
The key is to look at the complete offer rather than focusing only on the headline unit rate. The way your business uses energy can also make a significant difference, making smart energy use an important part of managing consumption.
Before You Sign a Business Energy Contract
Whether you go directly to a supplier or work with a business energy broker, make sure you understand the agreement before committing.
It is worth looking at:
- Who your supplier will be
- Your unit rate and standing charge
- Contract length
- Whether the price can change
- Any additional charges
- Exit or termination terms
- What happens when the contract ends
- Whether a broker is involved and how they are paid
Remember that business energy contracts do not generally have the same cooling-off period as domestic energy contracts have. Taking the time to understand the agreement before saying yes can help you understand exactly what you are committing to.
