Care Home Energy Broker vs Direct 2026: £1,500 per 1p

Last updated: Sunday 1 November 2026

For most care homes, using a broker or comparison service is worth it if it puts several suppliers’ quotes side by side and tells you exactly what commission is built into the price. Going direct can work if you have the time to request quotes from several suppliers yourself. The fee matters: a 30-bed home using around 150,000kWh of electricity a year pays about £1,500 a year for every 1p per kWh of commission, or £7,500 over a five-year contract. Since 1 October 2024, Ofgem has required suppliers to show any broker fees in contract terms for every non-domestic customer, as listed on 1 November 2026. This SwitchSquid guide compares the two routes for care homes, with the questions to ask before you sign. SwitchSquid is a comparison service and may earn a commission from the supplier you choose.

Sources: Ofgem: greater protection for businesses, Ofgem: third-party intermediaries guidance, Energy Ombudsman: access for small businesses and Bionic business electricity prices, as listed on 1 November 2026.

Care home energy broker vs going direct: the comparison

Why care homes feel broker fees more than most businesses

Care homes run day and night, all year. Heating, hot water, laundry, kitchens and medical equipment mean energy use is high. A common rule of thumb is about 5,000kWh of electricity per bed each year, so a 30-bed home might use around 150,000kWh. Our care home energy costs per bed guide covers the range.

At that volume, small differences add up quickly:

• 0.5p per kWh of commission is about £750 a year.

• 1p per kWh is about £1,500 a year.

• 2p per kWh is about £3,000 a year, or £15,000 over five years.

For context, Bionic’s October 2026 small business average is 27.2p per kWh, as listed on 1 November 2026. A 2p commission would be about 7% of that rate. Commission is not wrong in itself, since brokers have to be paid for their work, but you should know the figure and compare it.

What the rules say about broker fees

Ofgem tightened the rules for energy brokers in 2024:

• From 1 October 2024: suppliers must show any broker fees in the principal contract terms for all non-domestic customers.

• From December 2024: suppliers may only work with brokers registered with a qualifying dispute-resolution scheme for small business contracts.

• Energy Ombudsman access covers small businesses with fewer than 50 employees and either annual turnover up to £6.5 million or a balance sheet up to £5 million, or using up to 200,000kWh of electricity or 500,000kWh of gas a year.

Many single-site care homes fall inside the small business definition, which gives them access to free dispute resolution if something goes wrong. Ofgem’s microbusiness definition is narrower: fewer than 10 employees and turnover or balance sheet of £2 million or less, or using no more than 100,000kWh of electricity or 293,000kWh of gas. Our microbusiness energy rights guide and broker fees guide go into more detail.

When a broker or comparison service makes sense

• You do not have an energy manager. Most care home managers are already stretched, and a broker handles the quotes and paperwork.

• You want several prices on the same day. Wholesale prices move, so quotes gathered weeks apart are hard to compare.

• Your contract is finishing soon. A broker can move quickly to avoid out-of-contract rates.

• You run more than one site. Aligning contract dates across homes is easier with one point of contact.

You will usually be asked to sign a Letter of Authority so the broker can request your usage data from your supplier. Our Letter of Authority guide explains what it allows.

When going direct makes sense

• You have time to request quotes from several suppliers and compare them line by line.

• You are part of a group with buying power and staff to negotiate.

• Your current supplier offers a strong renewal price. Always ask for one, then compare it with the market.

Going direct removes broker commission, but it does not guarantee the lowest price. A single supplier only shows its own tariffs. Our nursing home energy suppliers guide lists the suppliers that commonly quote for care settings.

Questions to ask before you sign

1. How much commission is included, in pence per kWh and in pounds over the full contract?

2. Is the commission in the unit rate, the standing charge or both?

3. How many suppliers did you ask for quotes, and which ones?

4. Which dispute-resolution scheme are you registered with?

5. Does the contract include VAT and CCL treatment for residential use? Our care home VAT guide explains the 0% rate in Great Britain from 1 October 2026 to 30 June 2027 (Northern Ireland stays at 5%).

6. What happens at the end of the term, and will you remind us?

Business energy contracts have no cooling-off period, so get the answers in writing before you agree. Our care home energy renewal checklist has the full list.

Gas contracts work the same way

Most care homes also have a large gas contract for heating and hot water. The same rules on broker fees apply, and the same maths: commission per kWh multiplied by a high annual use. If you renew gas and electricity at different times, a broker or comparison service can help bring them into line. Our care home gas contract guide covers the details.

Fit summary

• Use a broker or comparison service if: you want several quotes quickly and the commission is disclosed clearly.

• Go direct if: you have the time and expertise to collect and compare quotes yourself.

• Either way: ask for the commission in pounds over the contract, and compare total yearly cost.

• Contract finishing in six months or less: start comparing now to avoid out-of-contract rates.

Need a quick estimate? Ask Squid AI, SwitchSquid’s assistant, or check your dates with our contract end checker. More help for care settings is on our care home energy page.

Important conditions

• Broker rules are Ofgem’s, in force since 1 October and December 2024, as listed on 1 November 2026.

• Energy Ombudsman eligibility depends on your size and usage.

• Care home usage and commission figures are SwitchSquid illustrations. Your quote depends on your usage, meter, location and credit check.

• VAT and CCL relief depend on qualifying use and the declarations you give your supplier.

• Business energy contracts have no cooling-off period.

Final decision card

For a busy care home, a broker or comparison service that shows several suppliers and discloses its commission is usually the practical choice. Going direct can save the commission if you have the time to shop around. Main limitation: neither route guarantees the lowest price, so compare total yearly cost and ask for the commission in pounds, since 1p per kWh is worth about £1,500 a year for a 30-bed home.

FAQ

Should a care home use an energy broker?

It can be worth it if the broker compares several suppliers and discloses its commission clearly. For busy managers it saves time and paperwork. Always compare the total yearly cost.

How much do energy brokers charge care homes?

It varies. Commission is usually added to the unit rate or standing charge. For a home using 150,000kWh a year, each 1p per kWh is about £1,500 a year.

Do brokers have to tell me their fee?

Yes. Since 1 October 2024, Ofgem has required suppliers to show any broker fees in the principal contract terms for all non-domestic customers. Ask the broker for the fee in pence per kWh before you sign.

Is going direct to a supplier cheaper?

Not always. You avoid broker commission, but you only see one supplier’s prices. Collecting quotes from several suppliers yourself takes time but gives a fair comparison.

Can a care home complain to the Energy Ombudsman?

Small businesses with fewer than 50 employees and turnover up to £6.5 million or a balance sheet up to £5 million can use it. So can businesses using up to 200,000kWh of electricity or 500,000kWh of gas a year.

What is a Letter of Authority?

It is a signed document that lets a broker request your usage data and quotes on your behalf. It does not commit you to a contract. Check how long it lasts and what it allows.

When should a care home start comparing energy?

Ideally six months before your contract finishes. That gives time to compare quotes and avoid out-of-contract rates. Many contracts let you agree a new deal well before the end date.