Over 70% of the UK get their energy supply from just 6 different suppliers. These six companies are dubbed ‘the big six’ consisting of British Gas, EDF Energy, E. ON, npower, Scottish Power and SSE. Although 70% sounds like a lot, that is down a fair amount from just 5 years ago in 2014, when the big six supplied energy to over 90% of the UK’s households.
With more and more customers seemingly switching from big suppliers to smaller energy companies, we thought we’d run down the pros and cons of making the jump for a small business.
Pros
Firstly, the biggest factor that most companies will take into consideration is price. According to OFGEMs report into Small and Medium Business Consumers’ Experience of the Energy Market (https://www.ofgem.gov.uk/publications/small-and-medium-business-consumers-experience-energy-market-and-their-use-energy), “In the current economic climate, all SMEs are cost-conscious and the price is a primary driver of their choice of supplier regardless of business size.” The cheapest deals offered to SME’s are usually from smaller energy firms, which is definitely a huge pro, and a big reason for making the switch from the standard large energy company to a smaller or newer company.
In addition to usually offering cheaper deals, smaller energy companies often come out top for customer service. In a smaller company, it can feel like each customer ‘matters more’ whereas, with a big company, it’s easy to get lost in the system.
Another concern with joining a small energy company could be its higher risk of going bust, but lucky for you, if your supplier does go under, no matter the size, your gas and electricity won’t be cut off. Energy regulator Ofgem appoints a replacement gas or electricity supplier to take on the failed supplier’s customers, ensuring your businesses energy needs stay met. Your tariff may change, but you will not lose any in-credit balance you have.
Cons
The risk of going with a smaller and newer energy firm is the potential lack of reviews or feedback from customers. When making a big decision like choosing your businesses energy supply, one of the biggest factors is hearing other people’s experience with the company, helping you get peace of mind that you’re making the right decision.
Conclusion
In conclusion, we believe that picking a supplier based on size is no way to determine quality. The disadvantages of joining a smaller energy company pale in comparison to the advantages.
When making the switch, we suggest looking into a variety of different methods to ensure your making the right decision for you and your business. Using comparison sites or speaking directly to suppliers can help get the best price possible, and make sure you do your research and listen to what customers of the suppliers have to say about their experience with them.