Why do brokers get paid when you’re the one shopping around for cheaper electricity? It might seem counterintuitive, but the answer lies in a clever blend of behavioural psychology, commercial strategy, and market dynamics. The truth? Electricity brokers don’t just help you compare providers—they are part of the energy market economy.

Let’s unpack how electricity brokers turn connections into commissions—without charging you upfront.

So, how do electricity brokers actually make money?

Brokers earn commissions from energy retailers—not from the customers they assist.

Here’s the quick version: When an electricity broker helps you switch providers, they receive a fee or commission from the energy company that wins your business. It’s a bit like how mortgage brokers get paid by banks or how real estate agents earn from vendors—not buyers.

But there’s nuance underneath that simplicity. Because electricity brokers sit between the consumer and the retailer, their business model relies on a few psychological and strategic levers to stay profitable.

Do electricity brokers charge the customer?

In most cases, no. Brokers offer their comparison services to residential or business customers for free. Their revenue comes from the supplier side.

This model aligns with the principle of Reciprocity (Cialdini): You get a valuable service without paying upfront, making you more likely to trust and accept the broker’s recommendation. It’s a nudge, not a shove.

There are exceptions, especially in the commercial space where brokers might offer tailored procurement or energy efficiency plans. In those cases, there could be a fee structure—but it’s usually transparent and optional.

What kind of commissions are involved?

Commissions are typically based on:

• The contract term length (e.g., 12, 24, or 36 months)

• The total expected usage (especially for businesses)

• The retailer’s margin and acquisition cost

For example, a broker might receive $50–$150 for signing up a residential customer, but thousands for large commercial accounts. That difference is tied to expected energy consumption—and by extension, the value of the client to the retailer.

Some brokers operate on a flat fee per sign-up. Others get an ongoing trailing commission, a percentage of your bill over time. The latter creates a long-term income stream for the broker, particularly in business energy markets.

Isn’t that a conflict of interest?

It can be—but only if the broker’s loyalty leans more toward the retailer than the customer.

That’s why transparency matters. A credible electricity broker should:

• Disclose how they’re paid

• Offer a broad range of retailer options

• Clearly state whether they’re independent or tied to a particular provider

This is where Authority comes into play. Brokers who are accredited, publicly rated, or have years of experience in specific industries (e.g., hospitality, manufacturing) tend to build more trust.

Think of it this way: A good broker is like a guide dog for the energy blind—not leading you into traffic, but around it.

Do brokers get better energy rates than going direct?

Sometimes, yes. Especially for business customers.

Brokers often have access to wholesale or partner-only rates that aren’t publicly advertised. Why? Because they deliver volume. Retailers are happy to offer discounted plans to brokers in exchange for a steady stream of qualified leads.

This advantage ties into Social Proof—many businesses and households use brokers for this exact reason. If hundreds of other people are getting better deals via a broker, it makes the approach feel safer and smarter.

However, not all broker-sourced plans are cheaper. That’s where comparison (and a bit of healthy scepticism) comes in.

What motivates brokers to act in your best interest?

Surprisingly, their income depends on you staying with the retailer.

If a broker gets a trailing commission, they have a vested interest in helping you choose a plan that’s not only cheap but sticky. You’re more likely to stay if the plan suits your needs and the switch feels smooth.

So, in many cases, their long-term commission model encourages alignment with your satisfaction.

That’s where the Consistency principle comes in. If you’ve committed to using a broker and they follow through with value, you’re more likely to use them again—and refer others. It creates a profitable feedback loop.

Can brokers help with more than just switching?

Yes—and this is especially true in the SME and large-business space.

Many brokers now offer:

• Bill auditing (identifying errors or overcharges)

• Energy efficiency insights

• Peak demand management

• Green energy sourcing

• Network tariff reviews

In short, they’ve moved from “plan comparison” to “energy strategy”.

If you’re a café in Sydney or a regional manufacturing firm, the right broker might save you five figures over a contract term—not just by securing a lower kWh rate, but by adjusting how and when you use electricity.

We’ve seen this in businesses that, through a broker’s advice, shifted their peak usage hours or installed power factor correction devices. These aren’t DIY insights—they’re expert moves.

Are all electricity brokers the same?

Not even close.

Some are tied to only a few retailers. Others operate independently with access to 10+ providers.

Some only work in residential, while others specialise in industries like hospitality, aged care, retail, or warehousing.

Choosing the right broker is like picking a mechanic. Anyone can change your tyres—but not everyone can optimise your engine.

Look for:

• Transparency on commission structures

• Breadth of retailer relationships

• Reputation and client testimonials

• Experience in your industry segment

This external guide from the Australian Energy Regulator breaks down broker roles and your rights when engaging one.

Can brokers work against you?

Yes—but so can any advisor with a commission model.

If a broker only shows you plans from one or two retailers, or pressures you into signing on the spot, that’s a red flag. Remember, Liking can be manipulated—just because someone sounds friendly doesn’t mean they’re working in your favour.

Be friendly but firm. Ask questions. Get offers in writing. And if you’re not sure, pause.

Brokers work for you—but they also get paid by someone else. That’s not wrong, it’s just reality. Understanding their incentive helps you stay in control.

What’s the bottom line?

Electricity brokers make money by connecting customers to retailers—and getting paid by the retailer. But the smart ones play the long game. They know that earning your trust pays better over time than a quick commission.

So if you’re wondering whether to use one, consider their value beyond the quote. If they’re helping you understand usage patterns, navigate contracts, or manage demand charges, they’re not just saving you time—they’re adding strategic value.

And that’s where brokers shift from “middlemen” to “partners”.

If you’re still deciding whether to go it alone or tap a professional, this breakdown on using an energy broker offers a handy perspective.

FAQ

Do electricity brokers favour certain energy retailers?
Some do. Always ask how many retailers they work with and if they’re incentivised differently by each.

Is it cheaper to go directly to the energy retailer?
Not always. Brokers sometimes have access to exclusive rates or bundled deals that aren’t publicly listed.

Can brokers help small businesses, or only big ones?
Absolutely. Many specialise in helping small and medium enterprises manage costs, negotiate contracts, and understand their energy footprint.