TRANSPARENCY FOCUS • JANUARY 2026

Energy Brokers vs Direct Suppliers 2026

Avoid hidden commissions and save £150-£3,000+ annually. Expert comparison of costs, transparency & long-term value for households and businesses.

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£3,000+
Potential Annual Saving
0.5p-2p/kWh
Hidden Broker Commission
80%
Better Direct for SMEs
100%
Better Direct for Households

Energy Brokers vs Direct Suppliers: What's the Difference?

Energy Broker

Middleman between you and suppliers

✅ Collects your details

✅ Requests quotes from suppliers

✅ Recommends/selects deals

✅ Earns commission from supplier

Common in business energy

Direct Supplier

Sells energy directly to you

✅ No middleman involved

✅ Pricing usually clearer

✅ Fewer layers, fewer mark-ups

✅ You compare suppliers yourself

Better transparency

Comparison Platform

Transparent market overview

✅ Compares multiple suppliers

✅ Shows true total costs

✅ No hidden commissions

✅ Puts you in control

Best of both worlds

Brokers vs Direct Suppliers: Side-by-Side Comparison

Feature Energy Broker Direct Supplier Comparison Platform
Middleman Involved ✅ Yes - Adds commission ❌ No - Direct relationship ❌ No - Transparent tool
Pricing Transparency Low–Medium High Very High
Control Over Contract Limited High Very High
Renewal Risk High - Auto renewals Lower - Clear process Low - You control timing
Best for Households ❌ Rarely needed ✅ Better option ✅ Best option
Best for SMEs ❌ Often expensive ✅ Usually better ✅ Optimal choice
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Total Cost Transparency Matters

Hidden broker commissions of 0.5p-2p per kWh add thousands over multi-year contracts. Direct comparison platforms provide full transparency, showing true total costs without hidden mark-ups. For 80% of SMEs and 100% of households, avoiding traditional brokers saves significant money.

Are Energy Brokers More Expensive?

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Hidden Commission Costs

Most brokers add 0.5p-2p per kWh commission to unit rates. For a medium business using 50,000 kWh annually, this adds £250-£1,000+ yearly to energy costs.

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Long Contract Incentives

Brokers earn higher commissions on longer contracts (3-5 years). They often push these regardless of customer needs, locking businesses into poor value.

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Renewal Commissions

Many brokers earn additional commission at renewal. This creates incentive to automatically renew contracts rather than seek better market rates.

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"Exclusive" Deal Myth

Brokers often claim "exclusive" deals unavailable elsewhere. In reality, these usually include hidden commission rather than genuine supplier discounts.

Hidden Commission Impact on Your Energy Bill

Broker Deal
£2,500/yr
Direct Supplier
£2,100/yr
Comparison Platform
£1,900/yr

Typical medium business (40,000 kWh): Broker commissions add £400-£600 annually vs direct supplier comparison.

⚠️ The Biggest Problem With Energy Brokers: Lack of Transparency

Common issues include: No breakdown of commission • "Exclusive" deals that aren't actually cheapest • Contracts chosen for broker benefit, not customer value • Difficult exit terms • Automatic renewals with rate hikes • Some brokers are ethical, but most lack pricing transparency.

Brokers vs Direct: Domestic vs Business Energy

For Households

Direct comparison ALWAYS wins

✅ Broker involvement rarely needed

✅ Domestic tariffs are standardized

✅ Price cap provides some protection

✅ Comparison platforms are free

100% better direct

For SMEs

Direct comparison usually wins

✅ Brokers are more common but costly

✅ Commissions inflate business costs

✅ Rollover contracts are major risk

✅ Transparency saves thousands

80% better direct

For Large Enterprises

Brokers may help with transparency

⚠️ Complex multi-site portfolios

⚠️ Specialized procurement needs

⚠️ Requires full commission disclosure

⚠️ Still compare direct options

Proceed with caution

How to Avoid Broker Overcharging

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Request Commission Disclosure

Ask for written confirmation of all commissions, fees, and mark-ups added to your energy rates before signing any contract.

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Get Multiple Supplier Quotes

Request quotes from at least 3 different suppliers through the broker, then compare with direct market rates independently.

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Check Unit Rates Independently

Use transparent comparison platforms to verify unit rates and standing charges against broker-provided quotes.

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Avoid Long Rollover Clauses

Reject contracts with automatic renewal or long notice periods. These trap businesses in expensive rollover rates.

How Much Can You Save by Avoiding Brokers?

Households save £150–£400 per year | Small businesses save £500–£2,000+ | High-usage SMEs save £3,000+

Choose Transparency Over Hidden Commissions

Compare energy prices directly through transparent platforms. Avoid broker mark-ups, secure better rates, and maintain full control over your energy contracts.