In 2006, there were only 10 energy suppliers to choose from, including the so-called big six (British Gas, ScottishPower, EDF Energy, E.ON, npower and SSE). Today, there is a decent range of gas and electricity providers able to supply your home.
Many of the challenger energy suppliers entered the market after 2013, when energy regulator Ofgem unveiled its plans to 'create a more level playing field' for small suppliers in an effort to shake up the market and pave the way for more competition.
Small energy suppliers have been serious contenders to the big six, offering some of the cheapest energy deals on the market - and many score highly in customer service ratings too.
However, since the beginning of the energy market crisis, there has been an increase in small suppliers going out of business, so it's important for consumers to research a potential new supplier before signing up.
First, the basics: the term "small suppliers" — sometimes referred to as "independent suppliers" — is generally used to describe any energy supplier that is NOT one of the traditional big six.
These small suppliers generally have 250,000 customers or fewer, though some larger independent suppliers, like OVO Energy and Shell Energy (formerly known as First Utility), are more established and have several thousand more.
Small suppliers are able to offer cheap energy deals because they have smaller overheads than more established suppliers. They are also not held to the same costly obligations that large suppliers are, such as paying into government schemes like ECO.
You might also find that small suppliers are able to be more innovative without the red tape that can hold larger suppliers back. Many small energy suppliers are leading the way in green energy and technology that makes it easier to manage your accounts.
While many new suppliers have entered the market in recent years, some have failed to last the distance. A small energy supplier might struggle to survive financial difficulties in comparison to a more established supplier. This is more likely to be the case over the next few months as the well-documented high wholesale prices situation forces smaller suppliers who have less cash to cover themselves with out of the market.
While historically many small suppliers have operated without issues, as noted above, a higher percentage are likely to exit the market in the near future.
However, you can rest assured there are rules to protect your household against any energy supplier going bankrupt. Energy regulator Ofgem has enforced a number of regulations and, should there be a problem, you will be switched to a new supplier. This will have no impact on your energy supply. You can find out more in our guide to energy suppliers going bust.
Many smaller suppliers have been ranked more highly for customer service than their big six competitors.
In a 2022 independent Uswitch survey of more than 16,000 UK energy consumers, households rated their suppliers in categories including Best Customer Service and Most Likely To Recommend. The top three suppliers for those two categories were all "small" energy suppliers.
If you run an energy comparison through Uswitch, information about the supplier is provided in your results on the Plan Info page.
This information includes when the suppliers were established, any warnings such as advance payment requirements and, where available, an independent customer satisfaction score.
We also provide a guide to energy suppliers, which contains an array of information about many energy providers (both large and small) currently available on the market.
You can also use trusted user review sites like TrustPilot to read real experiences and feedback from customers of any given supplier.
In years gone by, the short answer would have been that gas and electricity is all the same whichever supplier you choose. 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. However, this now includes some risk assessment about whether they're likely to go bust.
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.
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