Big Energy Saving Week: Collective energy switching expands slowly
Following Which's Big Switch earlier this year, more schemes are being unveiled, including one from the Labour Party...
Earlier this year, Which? launched a high-profile initiative to reduce gas and electricity bills by ‘collective switching’. Nearly six months on, and with bills on the rise again, is this type of bulk buying catching on?
The first schemes
Which’s Big Switch encouraged households to sign up to be part of a ‘reverse auction’, where energy companies would submit a tariff and the cheapest would win the custom.
As it turned out, the cheapest tariff submitted, from the Co-operative Energy, was actually more expensive than the leading tariff on the market. And the Co-op tariff was only available to 30,000 people, but nearly ten times as many people signed up.
Shortly afterwards, price comparison site energyhelpline launched the Huge Switch. Its collective switching campaign did manage to secure a market-leading deal, in this case cashback on a tariff offered by First Utility.
South Lakeland District Council in Cumbria became the first local council to successfully implement a scheme recently. It says its Power Up Your Community initiative could save the 1,669 households who signed up between £50 and £300 a year via the winning bid from Ovo.
There's an organisation called thePeoplesPower, which says it will be approaching energy companies this month, although so far it only has 2,845 people signed up.
On a more local level, a group of bodies including Cornwall Council, the local NHS, Community Energy Plus and the Eden Project teamed up to launch Cornwall Together. This aims to drive down prices for Cornish households, although anyone in the UK can apply.
The auction closes on Sunday (28th) and the group will be announcing the cheapest tariff shortly after.
And the Labour Party has launched its own scheme too, becoming the first political party to participate.
MP Caroline Flint announced SwitchTogether at the party’s annual conference. A little over two weeks later, its website says nearly 2,500 people have signed up. It will be piloting the scheme in three areas first.
What the Government’s doing
Last week, the Government announced it was providing £5 million for local councils and so-called ‘third sector’ organisations, such as voluntary and community groups, to set up collective switching schemes.
Want to get involved?
If you want to set up a collective switching scheme, the Department of Energy & Climate Change (DECC) has issued a PDF factsheet with advice.
Or if you want to sign up for a scheme, either locally or nationally, the DECC has produced another PDF factsheet with tips on what to consider.
Among the things you should think about are:
- How much energy do I use?
- Am I on a fixed term contract? If so, is there a fee for leaving my contract early?
- What companies is the scheme approaching?
- Will I have to change my payment method to participate?
- How long will the new deal last for?
Signing up for a collective switching scheme doesn’t mean you have to take the offer that is made, particularly if it’s no better than your current deal.
For me, collective switching is certainly not the only answer to our rising bills, as I explained in collective switching only one way of getting cheaper energy bills. Until more schemes report back it will also be difficult to ascertain how much of an opportunity for savings there is.
Having said that, as winter draws in, if it does offer you the chance of getting the cheapest tariff around without too many terms and conditions, you should grab the opportunity while you can.