What does an energy consultancy do?

Businesses don't always have the time or expertise to navigate volatile energy markets alone.

Buying business energy can be complicated. There are multiple suppliers, contract types, pricing structures and terms to consider.

An energy consultancy helps customers compare options, understand contracts and manage the procurement process.

But not every consultancy offers the same service. In this guide, we explain what energy consultancies do, how they make money and what to consider before choosing one.

In this article:

• Learn what an energy consultancy does.

• Understand how energy consultancies can impact your business.

• Discover the benefits and drawbacks of using an energy consultancy.

What does an energy consultancy do?

An energy consultancy acts as an intermediary between businesses and energy suppliers.

There is no one-size-fits-all solution for business energy procurement. First, a consultancy should help businesses understand the energy market enough to make an informed decision that suits their current situation.

Consultancies should present a range of options to prospective customers and explain contracts without rushing or pressuring businesses into deals they don’t understand.

Once a contract has been agreed, consultancies should work to implement the switch (or renewal) and provide ongoing support to ensure a smooth transition.

How does an energy consultancy work?

Each consultancy works differently, but they should follow a similar journey:

1. Understand your contract and usage: Consultancies should take time to understand your business and your current energy contract. Reviewing current terms is important, but knowing your usage is even more crucial at the first stage, so they can identify a contract that suits your specific business.

2. Establish a timeline: Once your renewal window has been identified, consultancies should provide you with a guide to the process, including how long each stage is likely to take.

3. Compare the market: At this stage, consultancies will approach their panel of suppliers with your needs to obtain prices and contract terms, then develop a few options that may be suited to your business. Meanwhile, you can focus on your daily operations.

4. Present options: Once quotes have been gathered, the consultancy will present you with their recommendations and options. You should make the final decision. You have the authority and control to select a contract you are comfortable with.

5. Manage the switch: Consultancies will begin the process of transitioning to the new contract, coordinating with the chosen supplier to ensure a smooth transition. Once the switch is completed, the consultancy can provide any agreed ongoing support and help with any final steps.

How do energy consultancies make money?

Ultimately, when you use a consultancy, you are paying for a service. Depending on the consultancy's remuneration model, this may be through a direct fee, supplier commission or another arrangement.

It is important that you ask your consultancy how they are paid. You deserve to know where your money is going and what services you are paying for.

This doesn’t mean working with a consultancy represents bad value.

If you are less confident navigating volatile energy markets, a consultancy’s expertise could be invaluable.

If you are struggling to find time in a working day, a consultancy can take much of the legwork out of energy procurement, freeing you to focus on running your business.

Five benefits of using an energy consultancy

1. Save time: Consultancies handle research and supplier conversations. 

2. Market knowledge: They make sense of complicated energy markets.

3. More choice: Potential access to multiple suppliers and contract options.

4. Negotiation: Experienced consultancies may be able to negotiate commercial terms with suppliers on your behalf.

5. Support: Depending on the service, consultancies can help with administration, supplier communication and ongoing account management.

Three considerations before using an energy consultancy

1. Understand the costs: As we have mentioned, find out precisely how consultancies earn their money. Are they being transparent?

2. Understand the service: Do they have access to a broad range of suppliers, and are they transparent about any commercial relationships? How far does their service extend? What support do they offer? Know what you’re paying for.

3. Understand the consultancy: Finally, not all consultancies are created equally. Do they listen to your concerns? Do they listen to your concerns? Do they understand your business and remain willing to support you after the contract is signed?

How we can help

Business energy is confusing. You know you need to stay on top of such a major cost, but that can be difficult while focusing on running your business and serving your customers.

We get it. We can support you.

CLA Energy Services exists to help rural businesses like yours make sense of their energy needs, simplify complex information and make smart decisions that lead to real change and reduced costs.

We are not here to sell you a quick fix. We're here to understand what matters to you, offer clear advice, and take ownership of the hard parts, so energy becomes one less thing to worry about.

Book a free energy health check today using the form below, call 0808 164 6151 or energyservices@cla.org.uk.