Quick summary
A commercial energy broker is usually paid to place you into an electricity or gas contract. An energy consultant is usually paid to advise you on what to buy and when, and may or may not place the contract.
Key takeaways
- Brokers are commonly paid by retailers or suppliers through commissions or referral arrangements, so you need clear disclosure and you should assume there is an incentive unless proven otherwise.
- Consultants are commonly paid by you through a transparent fee, and can be engaged to run a procurement process, reduce risk, and fix bill, tariff, and demand charge problems.
What is a commercial energy broker in Australia?
A commercial energy broker is an intermediary who helps a business arrange or negotiate an electricity or gas contract with a retailer. In practice, many brokers focus on sourcing offers, comparing headline rates, and getting a contract signed.
For small businesses, this often looks like a quick “rate check” and a switch to a market retail contract. For larger commercial and industrial businesses, it can involve a tender to multiple retailers and negotiation of a bespoke contract, but the broker’s incentive structure matters more because volumes and terms are bigger.
In NSW, intermediaries such as agents and brokers have obligations to disclose commission or referral arrangements before the customer commits to supply, signs, or pays (disclose if they have commission or referral arrangements).
What is an energy consultant in Australia?
An energy consultant is engaged to give advice and analysis, not just place a contract. A consultant might still help you buy energy, but their value is usually in making the decision make sense, not just making the decision happen.
For small businesses, a consultant’s work is usually about bill comparison, tariff fit, avoiding nasty contract terms, and quick operational fixes. For larger commercial and industrial businesses, consulting often extends into risk management, load profile analysis, network tariff optimisation, demand charge reduction, and procurement strategy.
Even if you use a broker, you still benefit from understanding your baseline rights in the retail market, including expectations around clear contracts and information (fair contracts with clear terms and conditions).
How do brokers and consultants get paid, and why does it matter?
Payment structure is the practical difference that drives behaviour.
- A broker may be paid by commission or a referral arrangement. In NSW, an intermediary must disclose the existence of a commission or referral arrangement (must take reasonable steps to make consumers aware of any commission).
- A consultant is commonly paid by you via a fee agreed upfront. That fee can be fixed, hourly, or tied to a defined scope such as “run a tender” or “reduce demand charges”. Fee-for-service does not automatically mean better, but it usually makes conflicts easier to see.
For small businesses, hidden fees can be a bigger issue than you expect because you do not have the time to dissect a contract line-by-line. For larger commercial and industrial businesses, a small price uplift embedded in a per kWh rate can compound into a big dollar figure over a long term.
What does “commission uplift” mean on an energy contract?
A commission uplift is when a broker’s commission is recovered through the energy price you pay, for example by adding a margin into a cents-per-kWh rate.
This matters for both small and large businesses, but it hits larger energy users harder because the same uplift applies to a much larger volume. Where commission is not made clear at the point you choose a deal, you can end up paying more while thinking the service was free (commissions are usually added onto a customer’s monthly bill).
What should be in the scope: Broker vs consultant?
This is where deals go wrong. Both small and large businesses should insist on scope in writing.
What questions should you ask before you engage anyone?
These questions apply to both small and large businesses, but the priority changes.
- How are you paid, and will you put the full detail in writing before you present prices?
- Do you receive commissions or referral fees from retailers, and if yes, from which retailers?
- Which retailers will you approach for my site, and are you limited to a panel?
- Will you provide a conflict of interest statement with the proposal?
- What exactly will you do with my bill data, and who else will see it?
- Will you negotiate contract terms, not just price, including pass-throughs and exit fees?
- If you say you can reduce demand charges, what is your method and what data do you need?
What are the common traps for small businesses?
Small businesses usually have less time and less negotiating power, so traps are often about clarity.
- Assuming the broker is free without asking how they are paid.
- Comparing only cents per kWh and ignoring supply charges and fees.
- Missing exit fees or conditions that lock you in if circumstances change.
- Not checking whether the offer fits your operating hours.
- Not keeping a copy of the signed contract and the final price schedule.
It is reasonable to use a broker or third party, but you still need to understand any fees and limitations (be aware of all fees involved before committing, or limitations on the offers they have available).
What are the common traps for larger commercial and industrial businesses?
For larger energy users, traps are usually about risk, not just the headline rate.
- Signing a multi-year contract without modelling volume risk and operational change.
- Not understanding pass-through clauses that can move costs after you sign.
- Letting a tender run on a rushed timeline that weakens negotiation.
- Using an intermediary that cannot explain how they are incentivised.
- Missing network tariff and demand charge drivers that swamp retail savings.
FAQs
What is the main difference between an energy broker and an energy consultant?
An energy broker mainly helps arrange and negotiate an electricity or gas contract with a retailer, and may be paid via commissions or referral arrangements. An energy consultant mainly provides advice and analysis to improve your decision, usually for a transparent fee.
Do energy brokers have to disclose commissions in Australia?
Rules vary by jurisdiction and situation. In NSW, intermediaries such as brokers must take reasonable steps to disclose commission or referral arrangements before you commit, sign, or pay (must take reasonable steps to make consumers aware of any commission).
What should I ask to avoid conflicts of interest?
Ask how they are paid, whether they receive commission or referral fees, which retailers they approach, and whether they are limited to a panel. Get it in writing before you receive pricing. For NSW businesses, intermediaries must disclose commission or referral arrangements before you commit (disclosure must be made before the consumer signs the contract, makes a payment, or commits), which gives you a clean point to insist on clarity.
Do small businesses get the same energy protections as households?
In many parts of Australia, small businesses can be treated as “small customers” under national energy frameworks if they are below consumption thresholds, commonly framed around 100 MWh per year (business customers that use less than 100 MWh of electricity a year). That can mean stronger rules around contracts and information. Larger commercial and industrial businesses usually do not have the same protections and must negotiate terms more actively.
Can an energy consultant reduce demand charges?
Often, yes, but only if they work from interval data and the network tariff rules that apply to your meter. Demand charges are linked to your maximum short-interval electricity use and government guidance notes they are often based on the highest half-hour interval in a period, usually a month (highest half hour interval of demand). For small businesses, quick operational changes may help. For larger energy users, automation and process changes are common.
Do I need to give my full bills to a broker or consultant?
Usually yes, because your bills contain the tariff, meter details, and the pattern of usage that drives real cost. Before you share anything, confirm the scope, how they will store data, and whether it will be shared with retailers.
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