Monday kicked off the start of the 7th ‘Big Energy Saving Week’: a week dedicated to raising public awareness on how to switch energy supplier/tariff and make home energy improvements, saving money whilst saving energy. A YouGov poll carried out for the Big Energy Saving Week found that 1/3 of people don’t see the point in switching energy supplier because they believe they are all the same. This is a misconception that is costing people hundreds of pounds a year.
The big six (British Gas, Npower, SSE, Scottish Power, E.On, EDF), who have an 80% market share, are alongside a number of other energy firms which have benefited from the large number of inactive energy customers (those who don’t switch provider frequently). This failure to switch energy suppliers has cost millions of UK households roughly £1500 over the past six years. People have been drawn in by company’s cheapest tariffs. However, these ‘teaser rates’ tend to only last 12 months and once they have finished they switch to a default standard variable tariff (SVT), which can be up to £300 more expensive each year. Customers would usually expect to be rewarded for loyalty; however, in this instance it is quite the opposite.
Between 2012 and 2017 Ofgem figures show that more than a third of UK households (35%) did not change gas or electricity provider. That is the equivalent of nine million households who did not switch suppliers.
In 2017 roughly 5.5 million people in the UK switched electricity provider. Competition does exist in the energy market but primarily this is amongst the companies vying for this select group of active customers. Although the energy market is full of companies trying to get as much from their customers as they can, there are some good ones out there who are turning on the renewable gas and making the big companies hot under the collar. These companies may not reform the energy market, but their business model demonstrates a shift towards systemic change within the sector and is the first step towards a fairer, more transparent and user friendly energy market.
Companies switching it up
One such company is Bulb. Bulb is an energy company that provides electricity which is from 100% renewable sources (10% renewable gas – if you want gas as well). Their business model explicitly focusses on ‘empowering customers’. They have created a community with an open dialogue where you can discuss issues and share ideas.
The beauty of Bulb is that they only have one tariff, meaning after one year you won’t have any nasty surprises or switch tariffs, because there isn’t another one. If you are looking to switch and become a customer with them they will pay your exit fee and complete the process for you. On top of this Bulb don’t have an exit fee as they want you to join and stay with them because of the quality of their service, not because it is too challenging to leave.
Bulb is just one example of the companies looking to bring about a systemic change in the energy market. If you are interested in more companies like this, check out Tonik and Octopus.
Turning to Trust
Trust is a big factor in the success of these companies as the electricity and gas market is one of the most disliked industries in the UK. When looking at Trust Pilot, an independent customer review site, Bulb, Tonik and Octopus have more stars between them than the big 6: they are all rated five stars whereas the highest rating amongst the big six is two stars. In Which? magazine’s latest customer survey the big six all rank in the bottom 10 in the sector for customer satisfaction. It is clear that this is not a single issue; rather, it is something systemic within these large corporations, making the case to switch even more compelling.
When was the last time you looked at the other electricity providers out there? This isn’t a marriage or holy union, this is energy. You aren’t off the market so feel free to look around. Energy companies get away with charging extortionate prices thanks to the large base of inactive customers. If you are one of these inactive customers, take action and switch. If you need help looking around, USwitch is a consumer switching service which can help you identify cheaper tariffs and potentially save hundreds of pounds.
Life is busy and, although I knew there were better energy options out there, it took me longer than it should have done to switch provider. If you are looking to save money and help out the planet, then it’s time to switch. By buying renewable energy you are increasing the demand for this type of energy and contributing to the energy transition away from fossil fuels. Saving money by changing to green energy is a win-win, and it took me less than five minutes to get a quote and switch.
At the start of this year (2018) I have switched my energy supplier to Bulb. I have followed the company for a while and believe they are shaking things up in the energy market. If you are interested in switching to them, you can copy and paste my referral link into the search bar (bulb.co.uk/refer/kieran9700). This means we will both receive £50 to our accounts when you sign up. After you have signed up, your friends can use your referral code and you can both get £50.