The Competition and Market Authority’s report suggested many remedies to improve the energy market. One of the best and result oriented remedy was to remove four tariff restrictions on suppliers. By suggesting a change on the existing rule, the CMA encourages the competition. The end result of competition in the energy market would benefit the customer with low priced energy.
According to the old rules, a supplier could offer only four tariffs each in the open market. It was to make choice simple for the customer. However, this limitation of four tariffs used to be the bottleneck as customers had limited choice of tariffs. Market experts thought that this limited the competition and as otherwise the suppliers could offer their customers cannot get tailor made energy solutions.
Followed by CMA’s investigation and suggested remedy, the energy regulator Ofgem has relaxed this rule. With this, energy suppliers are open to offer more than four energy tariffs and provide customised energy solutions to the people of UK. The Big Six energy supplier npower was the first one to leverage this opportunity and launched its fifth tariff that would cost just £786 a year.
Role of comparison sites – to grab tailor made, exclusive tariffs:
Some of the energy suppliers came up with a better solution than just increasing the number of energy tariffs. Suppliers like British Gas, npower and Bulb have collaborated with energy comparison sites , which can offer exclusive and cost effective tariffs to the customers.
Custom made and innovative tariffs in the line-up:
Another striking thing came out when suppliers like British Gas came up with a solution of offering free energy on weekends to customers that have smart meters. This would help formulate better deals by analysing the data from the smart meters.
Scottish Power has launched its PowerUp scheme that offers energy in packets, just the same as we do for refuelling our vehicles and recharging our smart phones.
What should the customers do?
You should not get blinded by the initial plan but, keep a check on the standing charges, kWh rates and other details of each tariff.
You should also check the service of the supplier as savings is not always the most important things. Check out for variables, percentage of renewable energy, rewards and extra facilities. Have a broad view and then come to a suitable conclusion.
Brijesh is a financial advisor at Freepricecompare.com and a passionate blogger. He writes on personal finance and money-saving tips. He suggests all UK households to compare energy prices before renewal energy contract with existing supplier. When he isn’t writing, he is spending time to find advance technique of farming and its way of applying. He also plays his guitar gifted by his father.