Why Business Owners Are Turning to Energy Brokers
In today’s energy market, locking in the right electricity or gas deal can feel like a full-time job. Prices fluctuate, contract terms are complex, and providers constantly change incentives. For time-poor business owners, an energy broker can offer a shortcut — but not all brokers are created equal.
The Australian energy space features two main types of brokers: independent and contracted. The one you work with can significantly affect your pricing, your flexibility, and your bottom line.
This article breaks down the differences, how each operates, and which may be right for your business — whether you’re a national retail chain or a single-site café.
What Is an Energy Broker, Really?
An energy broker is a third-party intermediary who helps businesses compare energy offers and lock in supply contracts. Their main pitch? Saving you time and, ideally, money.
While some brokers genuinely work in your best interest, others are paid directly by energy retailers and may steer you toward a deal that benefits them more than you.
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Independent Energy Brokers: Paid by You, Work for You
Independent brokers typically operate on a consultancy-style model. They charge clients directly through flat fees or hourly rates, and their income isn’t tied to which energy provider you choose.
Key features:
- Unbiased comparison across a wider range of suppliers
- Transparency in pricing and commissions
- Strategic advice on timing contracts, usage analysis, or multi-site aggregation
Because they aren’t aligned with any one retailer, independent brokers often negotiate more aggressively on your behalf — and won’t shy away from recommending smaller, niche retailers if they offer better terms.
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Contracted Energy Brokers: Free on Paper, But at What Cost?
Contracted brokers are more common — and more controversial. These brokers are paid commissions by energy retailers when they successfully sign up a customer. While the service is usually “free” for the business, it often comes with hidden costs.
Typical traits:
- Limited panel of retailers
- Commission-based motivation (not performance-based)
- Risk of biased advice or non-transparent pricing
A 2023 ACCC report on commercial energy brokering found that commission structures can create incentives that don’t always align with the client’s best interests — especially when brokers fail to disclose their relationships.
The Hidden Margin Game
One issue many businesses overlook is the embedded margin brokers can add to your final energy rate. For contracted brokers, it’s not uncommon to see 2–4 cents per kWh added to your tariff — all bundled into your contract without clear disclosure.
If you’re running a high-usage operation like a cold storage warehouse or industrial laundry, that margin can quietly cost tens of thousands each year.
Independent brokers, by contrast, have no incentive to inflate your rates. Their pay is set upfront — not tacked onto your bills.
What Businesses Are Saying
- Hospitality: A Melbourne restaurant group switched to an independent broker after discovering their previous broker had locked them into a three-year contract with above-market rates — and never disclosed their commission structure.
- Manufacturing: One regional plastics factory reported saving over $20,000 a year after re-tendering their energy through a broker that operated on a flat-fee model.
These aren’t one-off examples. As the energy market becomes more competitive, the choice of broker type can be just as important as the choice of retailer.
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How to Choose the Right Energy Broker for Your Business
Before signing anything, ask these key questions:
- Do you work with all energy retailers, or only a select panel?
- How are you paid — and by whom?
- Will I receive a full breakdown of the rates and any added margins?
- Can you help me with energy efficiency or multi-site strategy?
If a broker dodges these questions or offers vague answers, it’s a red flag.
Final Thoughts: Don’t Let the “Free” Model Fool You
Both independent and contracted energy brokers have their place in the market. The right choice depends on your business size, usage complexity, and how much transparency you expect.
But if you’re making a long-term energy decision, be wary of anything that sounds too good to be true — especially in a “no upfront cost” pitch. The price may be hidden in your kWh rate.
Smart businesses know that who you trust to represent your energy needs is just as critical as the tariff itself.