Is comparing business energy free?
Usually it costs you nothing directly. Comparison sites and brokers are normally paid by suppliers, with the commission built into your unit rate or standing charge. Since October 2024 that cost must be shown in the contract's Principal Terms for all non-domestic customers.
Free to use, not free to run
Most comparison services and brokers do not send you an invoice. They earn commission from the supplier when you sign up, and that commission is recovered through your prices. So the service is free to use, but not cost-free.
What the rules require
- From 1 October 2022, microbusiness contracts must show broker costs in the Principal Terms as a total in pounds and pence for the whole term, though estimates are allowed.
- From 1 October 2024 this extends to all non-domestic contracts signed on or after that date.
- Suppliers may only work with brokers that belong to a qualifying dispute scheme: from 1 December 2022 for microbusinesses and from 19 December 2024 for small businesses.
- If you pay a broker a fee directly, Ofgem says that need not be declared in the supplier's Principal Terms, so ask.
Brokers are not yet directly regulated by Ofgem. Read are energy brokers regulated.
Worked example
A contract's Principal Terms show broker costs of £420 over 3 years. £420 ÷ 3 = £140 a year. On usage of 20,000 kWh, that is £140 ÷ 20,000 kWh = 0.7p per kWh. If a direct quote is 0.7p cheaper, the broker's route costs you nothing extra; if it is cheaper still, you need to ask why.
Questions to ask any comparison service
- How are you paid, and by whom?
- Which suppliers do you not show?
- What is the total broker cost on this quote?
- Is this the same price I'd get going direct?
- Which dispute scheme are you in?
Our guide on broker vs direct vs comparison site compares the routes, and how to find out what your broker is paid shows where to look.
If you want a truly independent view
Biz Energy takes no commission and does not sell energy. Use our cost calculator to check any quote, and compare at least one direct quote.
A word on direct fees
Some advisers charge you a fee instead of, or as well as, taking commission. That is allowed, but it should be agreed in writing before you start. Because Ofgem says directly paid broker fees need not appear in the supplier's Principal Terms, the only way to know your full cost is to ask for a written total of everything the adviser will receive from both sides.
Keep a copy of every quote and any email promising a price. If the final contract differs from what you were told, you have a record to raise with the broker, and later with the Energy Ombudsman if needed.
Next steps
See how to compare business energy and what you need to compare.
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.