Ask most small business owners how their energy contract compares to the market, and you’ll get a shrug. That’s not a criticism. Business energy is bought in a way that makes it almost impossible to know.
If you run a small or medium-sized business in the UK, there’s a decent chance you’re paying more for your gas and electricity than you should be. Not because energy itself is expensive, though it is. Because of how the deals get put together in the first place.
The wholesale price isn’t the whole story
Domestic customers benefit from a price cap and a market that’s easy enough to compare. Business energy works differently. There’s no cap, contracts are negotiated one at a time, and most SMEs don’t have the hours in the day, the market knowledge, or the purchasing volume to push suppliers hard on their own.
That gap gets filled by energy brokers. And for a lot of SMEs, that’s where the real money leaks out.
Where broker commission actually sits
Most business energy brokers are paid by the supplier, not by the business they’re supposedly representing. Their commission goes into your unit rate and stays there, quietly, for the length of your contract.
You rarely see it on the bill. You’re rarely told what it is upfront. And it’s usually tied to how much energy you use, which means the more you consume, the more the broker earns, whether or not they’ve actually found you a good deal.
This isn’t a fringe complaint. Ofgem has spent recent years tightening the rules around Third Party Intermediaries, the industry term for the brokers and consultants who sit between businesses and suppliers, precisely because commission opacity keeps hurting SME customers.
Why SMEs get hit hardest
Big businesses have procurement teams, energy consultants on retainer, and enough volume to negotiate directly with suppliers. SMEs generally don’t. That leaves the small and medium end of the market the most likely to:
- Roll onto a supplier’s default out-of-contract rate without noticing
- Take the first quote a broker sends over
- Have no visibility into whether that quote reflects any real competition
- Pay a broker fee they never agreed to and were never told about
None of this is a moral failing. It’s a market designed in a way that makes it easy to overpay and hard to spot when you have.
What a fairer setup looks like
You don’t have to go it alone or spend your week ringing round suppliers. What has to change is how the middle bit is paid, and how much competitive pressure it actually puts on your quote.
An auction fixes both. Open the contract to the major suppliers at the same time. Let them see each other’s bids and come back lower until you stop. Charge one flat fee, agreed before anything happens, and only if you accept. The hidden commission goes. So does the incentive to leave you on a rate that suits the broker more than the business paying for it.
That’s what we’ve built with energybid, ahead of our Q4 2026 launch. A live auction for UK business energy contracts, with a single flat fee that isn’t linked to your usage and only becomes payable when you accept a bid.
The takeaway
Overpaying for business energy is rarely bad luck. It’s the shape of the market. Knowing where the hidden costs sit is the first step to keeping them out of your rate.
Register your interest ahead of launch and you’ll be first in line to put your renewal up for auction when your contract next comes round.
