The monopoly held over the UK energy market by the big six energy suppliers could be coming to a close in 2017, as Ofgem moves to make the way energy is sold to customers simpler than ever before.
2017 will already see the UK’s business water deregulated, leaving businesses free to decide who their water is supplied for. Changes by Ofgem mean that other forms of energy will go the same way, meaning the old-fashioned way of complicated energy sales to customers is a thing of the past.
Why the big energy monopoly may be ending?
Historically, customers used to be door-stepped by energy companies offering new energy deals, deals which included complicated lingo, confusing terms and the risk of falling on to a much more expensive tariff once your existing deal ended. These changes can cost the customer hundreds of pounds extra a year, unnecessarily so.
However, following a long and detailed review by Ofgem, the government regulator for gas and electricity marketing in Great Britain, the way we buy energy will now change as this market becomes deregulated as well.
The key change for energy customers in just how the energy is sold. Moreover, how the tariff is explained, the lock-in period for the tariff and perhaps most tellingly, no more penalties for switching energy supplier.
As part of the shake-up, all energy suppliers must offer at least one tariff which has a standard charge which is a single unit rate, making it simple for business and home owners to understand and to estimate bills based on past usage.
Furthermore, this tariff will have no lock-in period which means that customers can potentially change energy suppliers as often as they wish to. Crucially – and this is where these changes make a massive difference – the tariff will also have no penalty to the customer should they wish to change energy suppliers.
This is a key change, allowing customers to take their energy supply decisions in to their own hands without fear of recompense from the big six energy companies. The standard tariff is designed to also make it easier for customers to compare tariffs side-by-side, both with the big energy suppliers and those smaller supply companies which will now have an opportunity to make real progress in to the marketplace.
Aside from the standard tariff, all energy companies will still be able to market other special offer tariffs and discounted rates.
What the standardised tariffs mean for the big suppliers?
So the consumer is going to be the beneficiary of these changes, having that freedom to change and the transparency of rates. But what do these changes mean for the big six energy suppliers?
Well, they’re almost certainly going to be forced in to not only being more transparent, but to now actively compete with many more energy suppliers. They will have to improve customer service, pricing and every other element of their offer to both win and retain customers in light of heightened competition from other suppliers.
Marketing activity which previously confused customers will no longer suffice as clear, simple and comparable tariffs now required by law.
Help in a changing Marketplace
It’s widely thought that these changes will dramatically change the way that these big suppliers operate, potentially seeing some come up with brand new business models to compete in this much-changed marketplace. To get the best deals in the energy market your business should be seeking the services of an Energy Broker like Supplywise. They can seek out the deals from both the larger and smaller energy providers on your behalf and find innovative and green solutions if required. If big energy is to be a thing of the past, then an expert to review your utility bills will be a huge asset to your business.