The Energy Market Data Hub (EMDH) released energy switching data on its latest report for the first few months of 2020. This information revealed that due to the Covid-19 pandemic, there had been a significant impact on the consumer’s decision to change suppliers. The number of consumers switching suppliers has significantly increased in the past few months.
ElectraLink has also shared an analysis of the number of switches completed each month.
As per Energy UK’s statistics, over 450,000 customers switched energy providers in January 2020 alone. This number was up 17% compared to January of last year, where the figure stood around 382,000. Around 18% of the switches were made to small- and mid-tier energy companies, totalling to about 81,000. According to Energy UK’s Interim CEO, January generally used to be a slow month, but switching figures show that the trend has been changing.
On a similar trend, switching activity in February 2020 was also up by 12.4% compared to the same period in 2019. There were over 513,000 changes compared to 456,000 switches in February 2019. Over 35.4% or 181,000 of these switches from Big Six energy firms to smaller challenger suppliers were made.
In 2019, twelve switches happened every minute as more customers tried to save money by finding the best deals in the market. There are currently over 60 energy suppliers available. While March 2020 saw the number go up to 712,000, it also marked a 7.5% decline as compared to the same period last year.
There has been a significant decline in the daily switching activity in March. It is due primarily to the national lockdown because of the Covid-19 crisis. A similar decrease continued in April, which was generally the peak month in terms of switching suppliers. With increased financial awareness and time from furloughed workers, changing activity is expected to continue declining in number.
Further, both SME business leaders and domestic consumers would prioritise activities for coronavirus awareness and management over switching their energy suppliers. However, that does not mean switching activity will cease significantly. There are interesting observations from the data recorded in March, such as:
As customers stare at a period of financial uncertainty and potential job losses, saving money on their energy bills may provide a small degree of relief. According to Ofgem, the energy market regulator, switching energy tariff, or supplier can result in significant savings. Price comparison websites offer details and analysis of the tariffs available with different companies.
Energy companies are classified as essential services, which continue to carry out maintenance work and repair even during the lockdown. Customers who are looking to switch can start researching about energy companies and the tariffs that will work best for them. The process of switching suppliers can take more than six weeks to complete, so once a customer has chosen a supplier and a specific tariff, they can initiate the process even during the lockdown.
For those with accounts that are in credit, they would receive a refund from the energy firm once the final settlement is calculated. For customers who owe money to the energy firm, they may have to either settle the outstanding balances or get a payment plan for the firm to pay those charges. The status of the account generally does not affect the switching process.
At a time like this, even small savings matter, and being on the right energy tariff can help you make significant ones.