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How Does Your Energy Broker Get Paid?

Many businesses use energy brokers to help them find the best energy deals and navigate the complex world of energy procurement. However, one common problem that businesses face is understanding how their energy broker is paid. In this article, we will explore the three most common payment structures used by energy brokers.

According to a report by Utility Week, 37% of businesses believe their broker is providing a free service, and 42% are unclear on how much they are being charged by their broker. Additionally, 38% of businesses do not believe that charges made by brokers are easy to understand. With these statistics in mind, it’s clear that many businesses struggle to understand the payment structures used by energy brokers. Let’s take a closer look at the three most common payment structures.

Commission-Based Payment Structure

The most common payment structure used by energy brokers is the commission-based payment structure. With this payment structure, the energy broker sends you a price from the supplier that includes an uplift, either as a unit rate or a standing charge. This uplift is the broker’s commission. The commission rate varies from broker to broker, with unit rates ranging from 0.05p to 5p per kilowatt-hour.

For example, if you request a price from your broker, they will request prices from suppliers that include their commission. When you receive the prices back from the broker, the commission will be included in the rate. However, it’s important to ask your broker whether their commission is added to the p/kWh unit rate or the standing charge on your contract. This can often be unclear, leaving businesses believing that their broker is providing a free service.

Share of Savings Payment Structure

Another payment structure used by some energy brokers is the share of savings payment structure. With this payment structure, your broker will receive a percentage of the total savings they achieve for you, which is normally between 10% to 50%. However, the percentage can vary from broker to broker.

If your broker is using this payment structure, it’s important to be clear on what they’re basing the saving on. This can help avoid misunderstandings further down the line. The share of savings payment structure has the advantage of aligning the interests of the broker with those of the business, as the broker is incentivized to find the best possible deal for the business.

Up-Front Payment Structure

Under the up-front payment structure, you agree with your broker what services they will provide for you, and then you agree on a monthly rate. With this payment structure, you will receive an invoice every month with the fee that you need to pay to your broker. This fee is in addition to the fee you pay to the energy supplier.

The up-front payment structure has the advantage of price transparency and reassurance that the broker is finding the best possible contract on the market, regardless of supplier commissions and market prices. However, this payment structure requires a higher level of trust between the business and the broker, as the business is paying the broker regardless of whether or not they achieve any savings.


In conclusion, it’s important for businesses to understand how their energy broker is paid. The three most common payment structures used by energy brokers are the commission-based payment structure, the share of savings payment structure, and the up-front payment structure. Each payment structure has its advantages and disadvantages, and it’s up to the business to decide which one works best for them. It’s important for businesses to ask their broker about their payment structure and to ensure they know exactly how their broker is being paid. By doing so, businesses can ensure that they are getting the best possible energy deal and that they understand the costs involved.

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