What will happen to energy in 2013? Will prices go up or down? What will happen to Ofgem? And what is the Green Deal anyway?
You heard a lot about clearer bills in 2012 and energy companies like British Gas cut the number of tariffs they offer in an effort to make it easier to compare. However, this is likely to become a mandatory feature of the energy industry as MPs encourage us to compare and switch energy suppliers more easily. Expect an announcement in summer next year.
If you’ve never heard of it, don’t worry, nine in ten respondents in a recent survey had no idea either. The Green Deal is the government’s scheme to allow customers to take out ‘loans’ to install energy-efficient measures such as solar panels, or cavity wall insulation.
The genius of it is, while you pay back the cost of your energy-saving installation on top of your energy bill, you won’t pay back more than your new energy efficient home saves you so you shouldn’t see too much of a rise.
All of the big six suppliers raised their prices last summer leaving consumers seething. However, almost universally the energy suppliers blamed rising wholesale and distribution costs of energy to the UK as the culprits.
Unfortunately we haven’t got a crystal ball but with the government energy saving targets kicking in, which require energy companies to make our homes more energy-efficient, the cost of meeting targets will be passed on to us. The good news? The more energy efficient we become, the less energy we have to use.
Ofgem to go?
Ofgem came under increasing pressure at the end of 2012 with several politicians calling for it to be scrapped. Whether Ofgem last the year depends largely on how the energy industry improves, although it’s hard to imagine it going altogether.
However, we may see some of its powers and responsibilities changed as the government struggles to keep control of the energy industry.
Small suppliers to rise
Small suppliers made their comeback in 2012, appearing at the top of the best buy table and challenging the big suppliers on cost.
It’s Ofgem’s pledge to make the energy industry more competitive, and small suppliers are the key to lessening the dominance of the big suppliers, so expect to see small suppliers go from strength to strength.