Making Energy Switching a Habit
Imagine a world without mobile phones or the handy little contracts that go with them when they were launched. Without them we wouldn’t have our I Phone’s or HTC’s as there wouldn’t be a benchmark for customers to compare against affordability and phone performance, as well as all the other marketable USP’s we so love to cherish from out handsets. Switch that across to a different industry and the Energy Market and Fixed Pricing is just the same.
Historically the UK’s Energy Market has been reliant onan un-competitive market termed the ‘Big 6’ where customers simply accepted the prices handed out by their providers with little question before carrying on business as normal. This lack of price competition has led to the situation we face today in that 87% of UK households have not switched their Energy providers equating to roughly 25 million people. This means that 25 Million households are sitting on the UK’s most expensive Standard Tariff or a more expensive Tariff than what they could be paying, causing a £1.2 billion overspend on Energy Bill’s by UK householders. Is it not time to make energy switching a habit?
“The first challenge in the market is getting people to switch their energy tariffs to a more cost effective Fixed Price Contract for an agreed amount of time. This way the market has a fundamental consumer base”. David Wiggins Big British Switching Week 2015
The second challenge is to get the people who have switched to such a price plan to Switch again until it becomes habit, like a mobile phone contract, the majority of consumers act upon fixing the prices once they know that their contract is due to expire.
Once there is a sizeable consumer base switching habitually, not only are they creating a more competitive Energy Market, which the UK has so desperately needed for decades. People can ‘upgrade’ their energy based upon their own previous expenditure and predicted costs based upon their own personal situation. An energy upgrade could typically include Green Tariffs currently average across the UK on a Dual Fuel Tariff at only £33.16 more than an Energy Tariff of which the supply is produced by Fossil Fuels.
Currently if the amount of people who habitually switch their energy supplier or Fix their Tariff, equating to 13% of all UK households, increases to 20% of the whole UK population by 2020 then the amount of greenhouse gas emissions could potentially be cut, helping the UK hit the Governments Greenhouse Emissions Target by 2050
The solution is long term but if people begin to act now the benefits of a competitive market for all parties and more importantly the UK Governments Renewable Energy targets for 2050 can become more realistically achievable.
Once we as a nation get into the habit of switching suppliers and fixing our Energy prices every year allowing the market to become competitive across the whole spectrum, is the moment when consumers can open the door to more Energy Efficient tariffs. The future can be bright for Green; it’s the steps in between that we as an industry need to work on.