Are commercial energy brokers free? What businesses actually pay

In Australia, commercial energy brokers are usually not truly free. In many cases you do not pay an upfront invoice, but the broker is paid via a commission that is built into the retailer’s rates, or you pay a fee-for-service directly. The right model depends on your business size, risk settings, and how transparent the broker is about what they earn.

Quick answer: How businesses actually pay

Most business energy broker arrangements fall into one of these models:

Commission model (most common): the retailer pays the broker, and the cost is typically recovered in the retail rate you sign up to. This is why people often call an energy broker free, even though the remuneration can be embedded in your cents per kWh or dollars per GJ.
Fee-for-service: the business pays the broker a disclosed fee, sometimes a fixed project fee, sometimes a monthly retainer for portfolio management.
Hybrid: a smaller consulting fee plus a smaller commission component.

Whichever model applies, the practical question is not whether an energy broker is “free”, it is whether the total outcome is lower cost and better contract terms for your business, with the payment structure clearly disclosed.

Why “free” can be misleading in business energy

When a broker is paid by commission, the broker is not adding a line item to your invoice, so it feels free. But in many retail contracts, commissions can be recovered through the retailer margin within the offered rate. That means two offers can look similar on paper, while one includes a higher embedded margin to accommodate broker commission.

This does not automatically mean using a broker is bad value. A good broker can save you money by:

Matching the contract structure to your load profile, not just chasing a headline rate
Finding tariff issues, demand exposure, or metering charges that are easy to miss
Running a competitive tender across multiple retailers rather than negotiating with one
Preventing rollover onto expensive default rates at renewal

Common ways commission shows up in business energy pricing

Commission is not always obvious. Depending on the retailer and contract structure, it may appear as:

Higher usage rates (c/kWh or $/MWh) compared to a direct-to-retailer quote
Higher daily supply charge (c/day) or fixed monthly charges
Extra retail margin embedded within bundled pricing
Longer contract terms being encouraged, because it can increase total commission over the life of the agreement

For larger C&I customers, commission may also be structured as a cents per kWh amount, a percentage of consumption, or a fixed amount per meter, and may be paid upfront, monthly, or as a trailing commission over the term.

Commission model vs fee-for-service: which is better?

There is no single best model, but there are clear trade-offs.

Commission model

Pros: no direct invoice, easy approval for small businesses, often includes end-to-end switching support.
Cons: can reduce transparency, may create a conflict of interest if a broker is incentivised to favour certain retailers or contract structures.

Fee-for-service model

Pros: clearer governance for procurement teams, easier to compare retailer pricing without embedded incentives, can be better for complex portfolios where ongoing management matters.‍
Cons: requires budget and internal buy-in, and you still need to validate that the fee delivers value.

What you should ask a broker before you sign anything

If you are evaluating whether the service is an energy broker free offering or not, ask these questions and request answers in writing:

How are you paid? Commission, fee-for-service, or both.
Is your commission built into the rates I will pay? If yes, ask how it is calculated (for example, cents per kWh, percentage of usage, per meter).
Which retailers are on your panel? Panel breadth impacts whether you are seeing the market or a subset of offers.
Do you receive different commission levels from different retailers? If yes, ask how conflicts are managed.
Will you show me a like-for-like comparison? Ask for a comparison that includes all rate components, supply charges, demand charges where applicable, metering fees, and contract terms.
What happens at contract end? Will you proactively review and re-tender, or do you only act when contacted.

How to tell if broker commission is “built in” to your contract

While you may not see a line called “broker commission” on your bill, you can still identify warning signs:

You are pressured to sign quickly and not given time to review terms.
The broker will not disclose how they are paid, or says it is “commercially sensitive”.
You are not shown multiple options, or not told why a retailer was recommended.
The offer focuses only on one rate, ignoring supply charges, demand charges, or pass-through items.

If you want to validate pricing properly, use your actual bills and, where available, interval data. For many businesses, the best savings come from getting the tariff and contract structure right, not just changing the usage rate.

Australian context: What rules apply to business energy broking?

Commercial energy brokerage is not regulated in the same way as financial advice. However, energy retailers operate under national and state frameworks, and brokers still need to comply with Australian consumer and competition law. Many businesses also look for brokers aligned with industry codes and best practice, especially when governance and procurement controls matter.

In the National Electricity Market, market institutions like the AEMC, AER, and AEMO oversee rules, retail obligations, and market operation. While these do not directly set broker fees, they shape the contract and billing environment that brokers work within.

Does using a broker increase your energy costs?

It can, but it does not have to. The answer depends on the broker’s process, panel access, and how they manage conflicts.

It may increase cost if commission is large, if you are steered toward a higher-margin retailer, or if the broker focuses on the easiest deal rather than the best-fit tariff.
It may reduce cost if the broker runs a competitive tender, negotiates hard, fixes tariff issues, and keeps you off rollover rates.

The most reliable way to judge is to compare total annual cost under the offered plan, including all charges, not just one advertised rate.

When a “free” broker model tends to suit SMEs

For many SMEs, a commission model can be practical if the broker is transparent, because it reduces friction. It tends to suit businesses that:

Have a single site or a small number of sites
Do not have in-house energy procurement capability
Want a fast comparison and switching support
Value help interpreting tariffs and contract terms

When fee-for-service tends to suit larger or multi-site portfolios

Fee-for-service is more common where procurement governance is formal and where the value is in analysis, tendering, and ongoing management. It often suits businesses that:

Run multi-site portfolios across multiple states
Face demand charges, complex tariffs, or pass-through structures
Need auditable decision trails for finance and compliance
Want strategic timing advice during wholesale market volatility

How Zembl approaches transparency and value

Zembl helps Australian businesses compare energy offers and understand how pricing is constructed, including how remuneration works. The goal is to simplify procurement without hiding the real drivers of cost, so you can make an informed decision.

If you want a benchmark of what you are paying now versus what is available, start with a bill review and a like-for-like comparison of supply charges, usage rates, and tariff fit.

Next steps: Get a like-for-like comparison

If you want to understand whether broker commission is built into your current pricing, or whether you could do better at renewal, Zembl can help you compare offers using your real bills.

Frequently asked questions

Is an energy broker free for business customers?

Usually not in a strict sense. Many brokers do not charge you directly, but they are often paid commission that is built into your energy rate. Some brokers charge an upfront or ongoing fee instead.

Can I ask a broker to disclose their commission?

Yes. You can ask how the broker is paid and whether remuneration is built into the rates you are being offered. You can also request the answer in writing as part of your procurement governance.

Does using a broker mean I will pay more?

Not necessarily. A transparent broker can reduce your total energy cost by running a competitive tender and ensuring your tariff and contract structure fit your usage. The key is to compare total annual cost and contract terms, not just one headline rate.

How do I compare broker quotes fairly?

Ask for like-for-like comparisons using your real bill data, including supply charge, usage rates, demand charges where applicable, and any pass-through items. Confirm contract length, price change clauses, and what happens at the end of term.