Bristol Switch & Save
Together for a better energy deal
Project duration: February 2013 to May 2013
Bristol Switch & Save was a collective energy buying scheme for Bristol households. It was developed and managed by CSE, and run in partnership with Bristol City Council, Bristol Credit Union and the Bristol Pound.
The scheme was one of several funded in 2013 by the Department of Energy and Climate Change as a way of increasing the number of people who switch between energy suppliers in order to get themselves better deals.
Read the evaluation report here.
Only around 15% of the population regularly switches from one energy company to another, so many consumers remain stuck on a high tariff while their energy suppliers offer better deals to newer customers. They can safely assume that these non-switchers are ‘sticky’ customers and not likely to be going anywhere else soon.
Headline figures (for details, see foot of page):
A total of 1,242 people including 173 prepayment meter customers switched through Bristol Switch & Save. Between them, these householders will save some £129,794 on their bills.The average saving was £104.81 a year, with ten people saving over £500. This figure is modest compared to other schemes because of the number of Bristol Switch & Save households who chose more expensive greener tariffs (319 of them, 26% of the whole) or fixed price tariffs (571 people, 46%). In other words opting for a lower short-term saving in in favour of renewables or longer-term price certainty.
With high domestic energy bills now a major concern, the Government is keen to encourage switching projects that persuade consumers to be less ‘loyal’, and force the big energy companies to come up with more attractive offers.
And as CSE's Janine Michael explained, "A good way of upping the pressure is for consumers to gang together. If we approach energy companies en masse rather than as individuals we will force them to sit up and listen and hopefully offer consumers a better deal.
And whilst Bristol Switch & Save was aimed at all consumers, including small businesses, a particular effort was made to recruit those most in need of help, namely poorer households and people using prepayment meters who tend to be on the highest tariffs. "This is an opportunity to highlight the benefits of regular switching to fuel poor households and to others who do not get a fair deal from their energy suppliers," Janine added.
Strength in numbers
Bristol Switch & Save was launched by the Mayor of Bristol on 21 February, and quickly gathered registrations of interest through a range of methods including a website (now closed, but image below), text-messaging, letters to Credit Union members, social media, radio and newspaper advertising and publicity in shopping centres and other public places. Information about the scheme was available through a number of local advice centres, city council access points, the Citizens' Advice Bureau, and other voluntary and public service organisations. People could register their interest with no obligation, online or through a dedicated freephone line hosted by CSE.
4,500 people joined in during the four-week registration period (but a total of 5,378 had registered by the end of the negotiation period). Armed with this list of potential switchers and using switch-specialists, energyhelpline, as a ‘broker’, the energy companies were invited to make their best offer.
“We got a good selection of deals for direct debit customers and for those who pay on reciept of bills,” said Janine, “including an exclusive tariff from Bristol-based supplier OVO Energy, a special green offer from local supplier Good Energy plus a selection of offers from British Gas, Co-op Energy, Scottish Power and Sainsburys.”
Tellingly, however, many of the big energy companies were unwilling to offer prepayment customers a decent deal, so CSE chose to use its own scheme finance to offer cashback to this group if they switched to any other supplier.
As CSE’s chief executive Simon Roberts noted, “Despite their protestations to the contrary, energy companies are not interested in this group of people who are poorer, more prone to energy debt and more expensive to service. Bristol Switch & Save has exposed this and we will be pursuing the issue further with DECC and Ofgem.”
Making switching simple
After we had negotiated the deals, we got back in touch with each person (by email, post and/or phone) to tell about the deals. Energyhelpline set up a special price comparison switching website where each customer could get a personalised quotation showing how much they would save if they switched to one of the Bristol Switch & Save deals (along with a comparison with other tariffs on the market). Customers could also get this information by phone.
Once they had seen their personalised quote, the householder was then free to decide whether they wanted to switch supplier for electricity or gas or both. Though most people (especially those who hadn't switched for a long time) would have saved by switching to one of our deals, there was no obligation to do so.
We also wanted to remove the hassle of the switching process, which often presents a barrier. Energyhelpline were a useful partner here, as they were able to sort the process out with the customers' previous and future suppliers, making things as simple as possible.
1,242 people switched (a 23% conversion rate), including 173 prepayment meter customers (a 20% conversion rate for this subgroup).
The large suppliers all gained some customers but lost more, and overall the ‘Big Six’ saw a net loss of 278 accounts. The worst performers were npower (lost 204), E.On (189) and SSE (123).
The big winners were Sainsbury’s (219 switches), and local suppliers Good Energy (170) and OVO (119).
The average saving was £104.81 on annual energy bills, with ten people saving over £500. The average saving figure was negatively affected by two factors:
- 319 people (26%) switched to greener tariffs (of which 216 switched to 100% renewable electricity). While many of these saved money, some chose to save a bit less or spend a bit more to switch to a greener option.
- A huge 571 people (46%) switched to fixed price tariffs, some of which fixed the unit price for 2+ years. This means that a lot of people were happy to accept a lower short-term saving in order to guarantee longer-term price certainty. Their savings therefore appear smaller now, but should be greater in the long term.
In total, Bristol Switch & Save saved householders £129,794 on their bills.
Apart from getting some better energy deals for people in Bristol and beyond, we're very pleased that Bristol Switch & Save raised awareness about the benefits of switching (especially among 'sticky' customer groups) and encouraged and helped people to get around to doing it.
Evaluating the experience
We produced an evaluation report to reflect on the process of running this scheme, and participant feedback, which you can read here. We hope it will be useful to other organisations running collective switching schemes.