Bulb Energy electricity prices Increase
Customers of Bulb Energy will see an increase in their electricity bills from the 1st of April when the supplier will apply changes to its single variable tariff. Read on for all the details and potential solutions.
What is happening to Bulb Energy electricity prices?
The London-based provider has informed its customers that a typical annual electricity bill will increase by £22 despite a fall in wholesale prices.
An average household can expect their yearly electricity costs to jump from £501 to £523 with Bulb Energy.
Pre-pay electricity customers will, of course, suffer the traditional financial punishment of paying more again for their power. These households, which tend to be more vulnerable to fuel poverty, will endure an average hike in electricity top-ups to £24.
Bulb Energy, which offers only one tariff, has blamed an increase in network and policy costs for the rise.
The firm, which has been involved in the UK market since 2015, has over 1.6 million customers. Ofgem’s most recent data shows it has a market share of 5% in both gas and electricity.
What other price changes is Bulb Energy making?
While Bulb is putting up its electricity prices, those with a dual-fuel account could potentially benefit from a decrease in their overall monthly bills. This will only occur for customers with household energy consumption which remains consistent or decreases.
Thanks to a fall in the wholesale price of gas due to oversupply, typical dual-fuel households have been told they could see an annual saving of £56 as long as their energy consumption does not change significantly.
That figure is the difference between the £78 saving on gas prices and the extra £22 Bulb has put on its electricity rates.
Here too, however, prepay customers with Bulb will miss out. Top ups for typical dual-fuel gas and electricity accounts will fall by just £18 leaving these households to pay £1,026 a year while those on direct debit will see their annual bill fall from £1,000 and pay just £944 per year.
People in fuel poverty or low incomes often can’t afford to commit to the direct debit system for various reasons.
The supplier’s direct debit tariff is lower than Ofgem’s energy price cap by £218. The price cap is a ceiling on the amount energy suppliers can charge for an average default tariff paid by direct debit and is principally aimed at stopping bigger providers from exploiting customers.
Needless to say, prepay customers again fare worse with the saving between Bulb’s tariff and the prepayment cap being £174, that’s £44 less than for direct debit accounts. Bulb said that most of its customers would save money on their energy, but admitted not everyone would see a reduction in costs.
The company has also announced that it will no longer maintain its policy of a single standing charge across the country.
From April the amount you pay for the standing charge will differ according to your location, meaning those in the countryside and more remote areas will probably have to pay more than those in towns and cities.
What are energy distribution network and policy costs?
The energy network and environmental and social policy support costs Bulb Energy has blamed for their price changes will increase by 13 per cent for 2020-2021.
The network costs are the fees a supplier must pay to National Grid and local distribution networks for use of the nation’s energy distribution infrastructure. The money goes towards the maintenance and development of the network.
Policy costs, which are levied by Ofgem and the government, go towards energy-saving schemes such as the Warm Home Discount and carbon-reduction projects like the Contracts for Difference scheme (CFD) and the Energy Company Obligation (ECO).
When will the price changes kick in for people moving to Bulb Energy?
The change in prices will come as an unwelcome surprise to people who have recently researched Bulb’s tariff and decided to sign up to the supplier.
Anyone paying by direct debit switching to the supplier from the 2nd of March will be charged the new tariff when their transfer is complete.
Direct debit customers who sign up for a prepay service from the 11th of March will be paying the new rates. Prepay customers who joined between the 2nd and 10th of March will be on the old tariff.
What has the reaction been to the new Bulb energy tariffs?
Co-Founder and CEO of Bulb said Hayden Wood said his company’s “mission” was to “reduce our members’ bills and cut their carbon emissions.”
“So it’s great we’re able to cut bills for over one million homes,” he said.
“By having a single tariff, our members know they’re always on our best deal, whether they joined us four years ago or just signed up this week.”
However, some customers on Bulb Energy’s community forum are feeling a little cheated.
User garbo5 said they were a new customer, but they don’t seem to be a very happy one.
“I’m a brand new member of Bulb. Thank you so much for your welcoming greetings and friendly approach. But NOT thanks for immediately putting up the cost by £1.61 a month,” garbo5 posted.
“I have just done a comparison prior to choosing BULB, and then you go and spoil it all by saying something stupid like ‘We want more money’.”
Longer-term customer Gerri thinks the price rises are an ongoing trend for Bulb Energy.
“Bulb were really good to start. They have increasingly gotten expensive,” Gerri wrote.
“My readings every month have gotten higher and higher. During the summer no heating on but yet they were charging me winter rates. Will be seriously looking after I have finished off paying them.”
Bulb Energy doesn’t charge any exit fees, so if you’re a Bulb Energy customer unhappy with the price increase you can feel free to look around for a better deal.
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