Becoming an Energy Broker: Five Steps to Take to Enter the Industry

You’re passionate about the energy industry. You follow the trends and know when the market ebbs and when it flows. You’re also interested in sharing this knowledge with others, helping them to better understand and make use of the resources available to them.

Does this sound like you?

If so, a career as an energy broker could be a viable job path. If the concept sounds exciting, read on. Today, we’re sharing five steps to take toward following this rewarding and future-focused field.

Ready to learn more? Get ready to take notes.

What Does an Energy Broker Do?

Before we delve into how to get your feet wet in the industry, let’s begin with a quick overview of what an energy broker does. In short, you’ll act as the go-between for clients and energy providers, helping your customers lower their utility costs and get the best deal possible for their power needs.

You can work in the residential, commercial or government sector, as long as the entity resides in an energy deregulated state that allows suppliers to set their own prices to attract customers.

As resources such as electricity and natural gas are commodities, you’ll need to stay abreast on the daily market prices, as they fluctuate regularly depending on a range of conditions. You’ll work one-on-one with your clients to help them understand and compare prices and contract details. It can be difficult for them to stay updated on the different prices available and thoroughly vet their options, and that’s where you come in.

1. Research Your State-Specific Requirements

Your first step should be to research the requirements for opening up an energy brokerage in your state. Most will require you to obtain specific licenses and certifications before opening up your business. You should also ensure that the municipality you plan to work in is deregulated, where the energy market is allowed to set its own prices rather than following a pricing scheme policed by a government agency. Recently, there has been a momentum in regulated areas toward a more deregulated environment, meaning that even if your state is currently under regulation, it could still be a potentially viable market in the future.

From there, it’s critical to research who your competitors will be. Which energy brokerage firms currently exist in your locale and who are their primary customers? Learn as much from them as you can, and also consider reaching out to brokers outside of your direct market, who may be able to offer more support.

2. Determine Your Business Structure

Do you plan to open an independent energy brokerage service, or do you intend to join a franchise? While there are companies that offer turnkey franchise solutions complete with a custom website, a list of leads and more, some still prefer the flexibility of working on their own.

Consider your ideal work environment and your preferred style of work. If you’re a go-getter who isn’t intimidated by the prospect of seeking out new clients and finding your footing in your local community, the independent route may be ideal.

3. License Your Business

After you determine which type of business setup to pursue, your next step will be to license your energy brokerage. Registering your business with your local government will aid in both licensure and taxation activities.

It will also help your business gain visibility, as you’ll likely be entered into an online database of energy suppliers and licensed brokers in your area. This information is commonly found via your state’s Department of Public Utilities.

4. Negotiate Your Contracts and Leads

Once you have established business legitimacy and generated some degree of client interest, you can begin communicating directly with energy suppliers and creating contract terms for your customers. If you’re working within a franchise, these contracts will usually be handled for you, through an independent broker will need to establish and negotiate them separately.

When seeking out leads, especially within the commercial sector, it’s wise to find clients with long-term, high-volume energy needs. This can help ensure you have a steady income stream and plenty of work, even if the market becomes momentarily unsteady.

5. Establish an Energy Supply Portal

If you’re a franchised broker, your deal will include a pre-built infrastructure that makes client communication and energy supply as seamless as possible. An independent broker will need to establish this portal from the ground up. One idea is to simply create a website or utilize a centralized digital platform that synchronizes your clients with their providers, so they can receive the electricity they need.

Succeeding as an Energy Broker

While this industry can experience unforeseen challenges, it is also ripe with opportunity. Especially as consumers become more cognizant of the cost of energy and more interested in renewable resources, an energy broker can be an invaluable resource in helping them navigate their options and reduce their utility spend.

If you’re interested in learning more about this industry or want to keep up with recent developments in the energy supplier sector, follow our energy insights so you’re always one step ahead.