A Simple & Practical Guide:
How to Become an Energy Broker
Before I dive into how to become an energy broker, i’d like to start with the basics. But if you’re already familiar with the energy industry and are interested in becoming an energy broker, grow an existing energy broker business by expanding into new markets, or if you don’t want to become an energy broker but would like to join our channel partner program, you can skip these first few sections and jump straight to the “meat” of this article by selecting the from the below menu:
3 Ways to Enter the Energy Industry
Introduction
Energy is an essential commodity that empowers us to live comfortable and productive lives. But with our increased energy demand, energy prices have also constantly increased. According to Bloomberg, Americans are paying record prices for electricity.
As a result, people are looking for more affordable and reliable energy. For most, this means finding ways to be more energy efficient, using less, or wasting less energy. However, for people who live or work in a deregulated energy market, finding lower energy rates is one of the best and easiest ways to reduce energy costs immediately.
This is what we call energy deregulation or the energy choice program.
To learn more about energy deregulation and how it works, we have created a three-minute video that makes it very simple to understand.
Thanks to energy deregulation in certain states, the energy industry has consistently grown over the past 15-20 years. With the energy market maturing into an established enterprise, energy brokers have become critical to energy sales and the energy choice program.
While residential and commercial customers in deregulated markets have a choice over their energy suppliers, the many options, prices, and plans can get confusing. Finding the best and most competitive energy prices can also be time-consuming. On the flip side, retail energy suppliers learned that it is easier to subcontract an energy broker than to hire their own sales teams.
This is why becoming an energy broker is an excellent option for opening a viable business or adding value to an existing business by offering clients a simple way to reduce energy costs.
If you want to enter the energy industry and part-take in its electrifying phase of growth and opportunity (yep, that’s a pun), then continue reading. I’ve compiled this guide to help you learn how to become an energy broker and to help you decide if becoming an energy broker is right for you.
What is an Energy Broker?
If you’re looking for an opportunity to open your own business, take advantage of the booming energy industry, or pursue a career as an energy broker, then let’s take a second to understand what an energy broker does.
An energy broker is a professional who helps individuals and businesses locate the best energy rates, plans, and suppliers to meet that individual or business’ needs. An energy broker acts as an intermediary between a residential or commercial customer and a retail energy supplier to negotiate the best possible energy rates, plans, and terms on behalf of the customer.
Every individual or business will have some energy goal in mind. For example, a residential customer may want to lower their electric bill, while a large corporation may want to use more renewable energy to reach their renewable energy goals.
A good energy broker works with clients to understand their energy usage, budget, and needs. Then, using their energy market knowledge, they locate and compare plans and prices from various retail energy suppliers and negotiate the best deal for their clients.
But an energy broker’s job doesn’t stop there. Energy brokers also provide ongoing support for their clients by managing their energy usage and bills, helping them renew their energy contracts before expiration, and always getting the best energy rates and terms possible.
The goal of an energy broker is to work with their clients to reduce energy costs and reach any energy-specific goals. An energy broker works to build strong and trusted long-term relationships with their clients. It’s not uncommon for a business or coproration to work with the same energy broker for years.
What Does an Energy Broker Do?
So, now that you know what an energy broker is, let’s take a look at what an energy broker does. What does an energy broker do?
A typical day in the life of an energy broker can be exciting and quite rewarding. Energy brokers must work to acquire new customers through sales, negotiating energy prices and contract terms for new and existing customers, studying up on energy news and the energy market, and managing contract renewals for customers.
While, broadly speaking, an energy broker helps get their clients the best pricing for electricity and natural gas, how this is done covers a range of activities. These can include:
An Energy Broker Studies the Energy Market
Like any commodity, energy prices are determined by the energy market, which changes daily. Although it’s impossible to predict the market accurately, it’s part of an energy broker’s job to monitor the energy market and advise their clients on the best solutions based on historical market information and current trends. Having up-to-date market information will help an energy broker recognize good pricing opportunities and advise their clients on what plans to choose and what contract terms best fit the current situation.
How Energy Professionals helps you with this:
If you already follow the energy market, this part will seem simple. This may sound daunting if you are new to the energy industry and unfamiliar with the market. To make this easy, at Energy Professionals, we have an onsite market analysis that issues easy-to-understand and consumer-friendly monthly reports on the natural gas and energy market to help you stay on top of your game.
An Energy Broker Locates & Negotiates The Best Energy Rates and Plans for Their Clients
As mentioned above, an energy broker works with several retail energy suppliers to negotiate the best energy rates and plans for their clients. They work to get the most competitive deals to provide their customers with energy price stability and reduce energy costs over the contract term. An essential part of this is running the market comparison. This means an energy broker works to obtain quotes from several retail energy suppliers simultaneously and then compares them and offers their customers the best ones, saving them time and the headache of needing to research and negotiate prices.
To give you an example, years ago one of our energy brokers here at Energy Professionals contacted a church in New York. The lady who managed their energy was sure they had the best rate possible but, thankfully, sent in a copy of the church’s energy bills for us to double-check it. Upon looking at the bills and attaining quotes from several retail energy suppliers, our energy broker found the church was paying more than double what it should be. By finding a much lower energy rate and contracting that rate for three years, the church realized more than $30,000 in energy savings over its contract.
How Energy Professionals helps you with this:
As one of the nation’s leading energy consulting companies, Energy Professionals works with more than 40 retail energy suppliers as well as the largest and most competitive ones. Thanks to our large customer base and having worked in the energy industry for over 20 years, an energy broker who is part of our broker network, has access to the most competitive rates and plans on the market.
An Energy Broker Oversees & Manages the Switch
The idea behind energy choice is that customers living in deregulated energy states can search for and source their energy from retail energy suppliers instead of “having to” pay their local utility rates. States that have deregulated their energy market passed legislation to prevent the local utility from having a monopoly on energy sales. This means that when an energy broker helps a customer find a better energy rate and plan, they must oversee the customer’s switch from their local utility or existing supplier to the new one.
If you’re not already familiar with how this works, here is a video that explains it:
How Energy Professionals helps you with this:
At Energy Professionals, our dedicated customer service team oversees and manages every new contract to ensure that any customer you enroll is smoothly transferred to their new contract and supplier. This means that, as an energy broker or channel partner, you can focus on your customers and their needs while we handle all the back-office contracting, paperwork, and follow-up with the customer and utility.
An Energy Broker Helps His Customer Renew Their Energy Contracts
There are two common ways to purchase energy rates. The most popular option is called a fixed-rate plan. A fixed-rate plan offers competitive energy rates and guarantees them for a certain period of months or years, known as the “contract term.” Energy brokers keep track of all their customer contracts and work with their clients to renew contracts that are coming to an end by locating new rates, new plans, and sometimes even a new supplier.
For example, an energy broker works with a local ice cream shop and signs them up with supplier A for a competitive energy rate of 5 cents per kilowatt-hour for the next two years. This means that as long as the ice cream shops stay within the terms of the contract, they will always pay 5 cents for every kilowatt-hour they use for the next two years, even if energy prices increase. Then, six months before the ice cream shop’s energy contract is complete, the energy broker would start looking for new and current energy rates and plans to go into effect when the current contract is completed. This is what we call “forward start pricing.” It means an energy broker can secure a competitive energy rate today that starts when the ice cream shop’s current contract ends. The energy broker would look for new rates and plans with Supplier A, but he would also shop with other suppliers to ensure he locates the best rate and plan for his customer, the ice cream shop. The energy broker then contacts the ice cream shop and renews them without a lapse or delay between contracts.
How Energy Professionals helps you with this:
By working with Energy Professionals, you can access state-of-the-art software we use to track all customer contracts and renewals. Alerting you about customers who need to be renewed, you can shop for new rates, continue existing customers quickly, and continuously grow your energy broker business.
To Build a Good Energy Broker Business, an Energy Broker Provides Great Customer Service
While not common, little hick-ups can occur along the process or the course of an energy contract. Maybe a customer is expanding or moving to a new location, maybe they have questions about their rates or agreement, and perhaps there is some billing discrepancy, or something went wrong or not as planned. An energy broker must have good customer service to retain customers and ensure a long and productive relationship.
How Energy Professionals helps you with this:
By enrolling in our energy broker platform, Energy Professionals handles all the customer service work for you so that you can work on locating new customers, registering them on new rates and plans, and renewing existing customers.
How Does an Energy Broker Get Paid?
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What is The Difference Between an Energy Broker and an Energy Consultant?
While our program and platform offer an option to become an energy broker or a consultant, this is an excellent place to cover the difference between an energy broker and an energy consultant.
Like an energy broker, an energy consultant also locates and negotiates the best energy prices and plans from retail energy suppliers. In addition, an energy consultant provides additional energy solutions to help clients reduce energy costs and waste, gain better control over energy usage, and offers renewable energy options, such as installing solar panels, wind turbines, or a microgrid.
Energy consultants work with energy providers to bring their clients solutions to meet their energy needs and goals. As experts in the energy industry, energy consultants can also enroll their clients in programs where they can earn money by reducing energy usage, such as demand response programs, or perform a full audit on a client’s utility bills to ensure there are no mistakes and help recover funds as a result of past billing errors.
Becoming an energy consultant is a great way to take an existing energy broker business and immediately expand it. These additional energy solutions also make an excellent way for channel partners to offer various energy solutions to their clients.