The Honest Truth About Energy Broker Commissions

Every Commercial Energy Contract Arranged Through a Broker Contains a Commission. The Question Is Whether You Know What It Is.

Energy broker commissions are the most discussed and least transparent financial relationship in the UK business energy market. Ofgem’s TPI Code of Practice requires brokers to disclose commission upon request. Most businesses never ask. Most brokers never volunteer the information. The result is a market where billions of pounds of broker income is generated annually from UK business energy customers who have little or no visibility of what they’re paying for the service — or even that they’re paying for it at all.

Telnergy discloses commission on every contract we arrange. We do this not because Ofgem requires it (it requires disclosure on request, not proactive disclosure) but because we believe the relationship between an independent energy consultant and their client requires it. This article explains how broker commissions work, what the range looks like across the market, how our commission is structured, and what to ask any broker you work with.

How Energy Broker Commission Is Embedded in Your Bill

When a business energy contract is arranged through a broker, the broker receives a commission from the supplier. This commission is not a separate charge on your bill — it is embedded in the unit rate you pay. The supplier quotes a “base rate” (the rate at which they would supply energy without a broker involved) and adds a “broker uplift” on top. You pay the combined rate; the supplier retains the base and passes the uplift to the broker.

The commission is typically expressed as a pence-per-kWh uplift, paid over the duration of the contract. On a 12-month contract, the broker receives the uplift per kWh for 12 months of consumption. On a 24-month contract, they receive it for 24 months.

The practical implications of this structure:

• You cannot see the commission as a separate line item on your bill — it is invisible within the unit rate
• The broker earns more from higher-consuming clients (more kWh = more commission regardless of rate per kWh)
• The broker earns more from longer contracts (more months = more payment periods)
• Different suppliers pay different commission rates to brokers — creating a structural incentive to recommend higher-paying suppliers

What the Commission Range Looks Like

Broker commissions in the UK non-domestic energy market vary considerably. At the lower end, brokers with volume relationships and competitive pressure accept commissions of 0.1–0.2p/kWh. At the higher end — which is more common in the broader market than most businesses would expect — commissions of 0.5–1.5p/kWh are paid on contracts for smaller business customers.

What this means in practice for a business consuming 200,000 kWh of electricity per year:

• At 0.2p/kWh commission, the broker earns £400 per year, or £800 for a 24-month contract
• At 0.5p/kWh commission, the broker earns £1,000 per year, or £2,000 for a 24-month contract
• At 1.0p/kWh commission, the broker earns £2,000 per year, or £4,000 for a 24-month contract

The difference between 0.2p/kWh and 1.0p/kWh on the same contract, for the same business, is £1,600 per year — money the business is paying directly, invisibly, in their unit rate. The unit rate quoted by the supplier paying 1.0p/kWh commission will be 0.8p/kWh higher than the unit rate from the supplier paying 0.2p/kWh, all else equal. For a business comparing quotes from two brokers — one running low-commission and one running high-commission — the unit rates will differ by approximately that margin, which the business will attribute to supplier pricing differences rather than broker commission differences.

Telnergy’s Commission Structure

We publish our commission structure because we believe transparency is a prerequisite for genuine independence. Our fee is agreed upfront and disclosed in writing before you sign. It may be paid directly or collected via the supplier as a transparent p/kWh uplift. The exact amount depends on consumption, contract length, and service scope.

As a guide, our fee is typically 1–2p per kWh on electricity and approximately 0.5p–1p per kWh on gas. On larger consumption and multi-site contracts, we agree a lower rate or a capped fee — a p/kWh uplift that makes sense at 50,000 kWh would be indefensible at a million, and we price accordingly. This reflects our conviction that commission should be fair compensation for the work done, not a profit maximisation exercise at the client’s expense.

We do not take enhanced commission from specific suppliers in exchange for volume commitments. We do not have preferred supplier arrangements that bias our recommendations toward higher-paying suppliers. Our recommendation is driven by which supplier offers the best combination of competitive rate, financial robustness, and service quality for the specific client — not by which pays us the most.

If you ask us what we earn on any contract we recommend, we will tell you the exact figure.

The Questions Every Business Should Ask Their Broker

The TPI Code of Practice gives every business customer the right to know their broker’s commission. Here are the specific questions to ask:

“How much commission will you receive on the contract you’re recommending?” The answer should be a specific figure or a pence-per-kWh rate. “We’re paid by the supplier, not by you” is not an answer — it is an evasion. “It’s built into the rate” is not an answer — it is a description of the mechanism, not a disclosure of the amount.

“Do you have preferred supplier arrangements or volume-based commission agreements with any suppliers on your panel?” If the answer is yes, ask how that affects their recommendations. If the answer is unclear or defensive, treat the response as significant.

“How many suppliers did you tender this contract to?” A genuine competitive process involves 10–20 suppliers. A process involving 3–5 suppliers may reflect an adequately competitive panel, but it may also reflect a restricted panel driven by commercial arrangements rather than market coverage.

“Will you provide me with the full comparison showing all quotes received, including the supplier rates and your commission on each?” A transparent broker should be able to provide this. The inability or unwillingness to do so is informative.

Why Disclosure Matters Beyond the Financial

The case for commission transparency is not only financial — though the financial case is real and significant. It is also relational. An energy consultancy relationship built on transparency about how the adviser is compensated is a fundamentally different relationship from one where the compensation is hidden.

When a client knows their broker earns £750 per deal, and understands that this is fair compensation for accessing 21+ suppliers, managing the tender process, negotiating contract terms, and managing the transition — the relationship is one of clear mutual value. When the commission is hidden, and the client only discovers it if they ask, the relationship is one where the adviser has a financial interest in the client not asking questions.

We choose the first model. We think it produces better outcomes for clients and better professional standards for the industry.

📱 WhatsApp Business: 07360 272168

📧 Email: hello@telnergy.com

📞 Direct line: 01202 028888

Telnergy Limited · Independent commercial energy consultancy since 2002 · Ofgem registered TPI · ADR Ref E3561 · CRN 04576876 · Christchurch, Dorset