Energy broker commissions: what you should know
In short: some energy brokers add a commission to the tariff that the customer does not always see. Compare not only suppliers, but also brokers.
The problem of opaque commissions
The energy brokerage market, especially for businesses, is not always transparent about the commissions paid to brokers. Some explain everything clearly; many others do not.
We often hear from business owners who received insistent sales calls and realised too late that the price included a per-kWh markup, agreed between the broker and the supplier, which inflated the final bill.
Comparison sites are brokers too
The same commission structure often applies to comparison sites: behind a friendly interface, they are brokers. The information may be in the terms and conditions, but in practice you have to ask how much they really receive. See what an energy supplier does to understand who is who.
Example: some brokers charge the equivalent of €0.01 to €0.02 per kWh in commission, an amount that quickly adds up to tens or hundreds of euros over a one-year contract.
Why do some suppliers allow high commissions?
If only unscrupulous brokers charged high commissions, the problem would be smaller. By allowing these markups, suppliers end up encouraging the behaviour, because it is easy profit for whoever intermediates. And a supplier that capped the commission could lose contracts to more permissive competitors.
What you should do
It is not enough to compare the prices of several suppliers: compare brokers too. A good broker adds value and justifies the commission with work that lowers the total price and with support when something goes wrong.
- Better prices: suppliers build offers from the wholesale cost of energy, network charges, taxes and their own margin. For consumers and small businesses margins tend to be larger, because there is less bargaining power.
- Supply review: a good broker reviews every aspect, such as the applicable VAT, the contracted power and other charges where there may be errors.
- Support when something goes wrong: in a billing problem or a supplier error, a competent broker steps in, follows the case and keeps the customer informed.
More transparency in other countries
The practice of inflated commissions worried regulators in several European countries, who began to require more transparency on commissions. In Portugal, it is ERSE that oversees the sector.
Summary: look for transparent brokers, compare suppliers and brokers, and prefer those who show concrete support when something goes wrong.