How do comparison sites decide which suppliers to show?
Typically they show suppliers they have a commercial agreement with, and are paid commission by those suppliers. Some suppliers are left out and some prices are only available through certain routes. Ask any site which suppliers it covers and how it is paid.
The business model
Comparison sites and brokers are generally paid by suppliers, not by you. That is how they can say the service is free. Ofgem's guidance on third-party intermediaries notes that brokerage costs are included in what you pay. Commission is built into your rates, which means the supplier mix a site shows can reflect who it has agreements with rather than the whole market. We have not been able to verify the selection method of any individual site.
What this can mean in practice
- Not every supplier appears. Some suppliers sell only direct, or do not pay commission.
- Different prices for the same deal. The same supplier's price can differ between routes, for example if the commission built into it differs. Ask what is included.
- Quotes may be estimates. Final rates can depend on credit checks and your details.
- Sorting by price is not the same as value. See whether the cheapest deal is the best.
What the rules do cover
Brokers, which can include comparison services that arrange contracts, must have costs shown in Principal Terms, and suppliers may only use brokers in a qualifying dispute scheme. See what a QDSS is. Ofgem does not license brokers or approve those schemes, and direct regulation is still being developed. Read are brokers regulated.
Worked example
You get three quotes for 15,000 kWh. A site shows Supplier A at 26p and Supplier B at 27p. A direct quote from Supplier C, not on the site, is 25.3p. The difference between 26p and 25.3p is 0.7p × 15,000 = £105 a year. You only find it by asking for a direct quote.
Questions to ask
- Which suppliers do you compare, and which do you not?
- How are you paid, and is the amount in my Principal Terms?
- Is this the supplier's best available price for my usage?
- Which dispute scheme are you in?
- Can I get a direct quote to compare?
Use two different routes, for example one comparison service and one direct quote, and compare the total annual cost with our calculator.
Reading the results sensibly
Treat a comparison result as a shortlist rather than a verdict. Check the quote's contract length, whether rates are fixed or pass-through, and any broker cost, then confirm the price with the supplier. If a result seems unusually low, ask what is excluded. Finally, remember that a site showing fewer suppliers is not necessarily doing anything wrong, but you should know the limits of what you are comparing.
Next steps
Read compare business energy and broker vs direct vs comparison site.
Biz Energy is independent and not affiliated with any supplier, broker or comparison site, and takes no commission. This is general information, not legal, tax or financial advice.
Sources
General information only. Energy prices, rules and supplier terms change; check the latest position with your supplier, Ofgem or the Energy Ombudsman before you act.