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Energy Q&A: What's the deal with small energy suppliers?

Small energy suppliers are currently offering some of the cheapest energy deals on the market, and as of 2018, one in five UK households gets their energy from a small supplier.

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Yet many consumers remain reluctant to switch to suppliers they've never heard of. uSwitch answers the question: is there anything to worry about when switching to a small supplier?

How many small energy companies are there?

Here's the story... Small energy companies have flooded the energy market since Ofgem adjusted rules to allow for more competition in the market.

Since then, small suppliers consistently offer some of the cheapest energy rates in the market, making them pretty attractive option compared to the big six (British Gas, E.ON, npower, SSE, EDF Energy and ScottishPower).

There are now more than 50 energy suppliers to choose from. When you take away the big six, that leaves plenty of small energy suppliers in the market.

And, while they offer a solution outside of the big six energy suppliers and their prices are low, the question remains: is it a smart switch to make?

Should I switch to a small energy supplier?

The quick answer is that it's really all the same product and quality (unless you're considering a renewable energy plan). What you're really paying for is the supplier — their customer service, their account management and any rewards and extras they offer — so it's important to know a bit about them before taking the plunge.

That's where price comparison sites can help. A good energy comparison site will provide background info about suppliers, including how long they've been on the market, and a customer service rating (though some suppliers might be too new to have ratings yet).

You can also use trusted consumer review sites like Trustpilot or Feefo to search for real reviews.

So, in short, small suppliers can offer some great deals and have great reviews from customers — just be sure to look past just the low price.

Compare energy suppliers, big and small, with uSwitch now to see if you can get a better deal on your gas and electricity.

How are small energy companies able to compete?

Not that long ago, more than 90% of households were getting their energy from the big six energy companies: British Gas, npower, ScottishPower, SSE, E.ON and EDF.

In 2013, Ofgem revealed its plans to make the energy markets more transparent, forcing suppliers to publish how much they plan to buy and sell electricity in advance.

This increased transparency has made it easier for smaller suppliers to compete on prices and ensure that they are more likely to receive a fair deal when trading.

As a result, dozens of new small suppliers have entered the market since 2013.

Having more suppliers in the market means there's increased competition and, in theory, should encourage the big six energy companies to provide excellent customer service and keep bills affordable.

Are small suppliers cheaper than the big six?

In many cases, it is possible to find a cheaper deal with a small energy supplier. It all depends on your location and what suppliers are available in your region.

Small suppliers don't have as many obligations as the biggest energy companies, which means they likely have smaller overheads.

However, they don't all have large marketing budgets to let customers know about their deals, which means that many people end up switching between big six suppliers instead of trying something else.

uSwitch's Ofgem-accredited energy comparison includes deals from small suppliers and information to help customers make an informed decision.

Is it safe to switch to a small energy supplier?

Many people still avoid switching to a small energy supplier due to a fear of the unknown. Thankfully, uSwitch makes it easier to make a decision by providing plenty of additional information about suppliers we can help you switch to.

In the very rare event that a small energy supplier goes bust, there are protocols in place to ensure those customers will be moved new supplier quickly and without disruption to their energy supply.

Read more on what happens when your energy supplier goes out of business.

Do small energy companies have good customer service?

Many smaller suppliers have been ranked higher on customer service than many of their big six competitors.

In the latest independent uSwitch survey of more than 17,000 UK energy consumers, households rated their suppliers in categories including customer service, value for money, transfer process and likely to recommend. Only two suppliers received the top score of 5 out of 5 stars in the best energy customer service 2018 customer ratings guide — and they were small suppliers Octopus and Bulb.

The easiest way to know which deals are best is to run a energy comparison online with uSwitch.

Read more…

Worried about your winter energy costs?

Don't get caught out in the cold. Compare fixed rate energy deals now to secure your costs this winter!