How to switch to a small energy supplier

Switching to a small energy supplier

If you’ve decided to change supplier, it can be difficult to know where to start. While the big six offer longstanding reliability, the energy market has been interrupted by dozens of small energy suppliers in the past few years. From green energy to stand-out pricing, you may find that when you change utility supplier, you discover a company you have never even heard of before, but that suits your needs perfectly. 

So, which of these newcomers can you rely on to give you a good deal, and which is the best small energy supplier for you, if any? Our handy guide is here to help.

Always compare energy deals

Big, small, or in between, no matter the size of energy company you are planning to go with, you should always compare energy deals when you start the search for a new energy provider. Many small energy suppliers offer excellent deals, but perhaps the big six can match them. You may even find that your current provider has a better tariff on offer, so you don’t need to change supplier at all. Whether you’re committed to change, want to find a green plan or just want to save money, always compare energy deals before you change utility supplier.

What is a small energy supplier?

Energy suppliers are described by size based on their customer base. At the top of the scale are the big six - well-established energy companies that have the market share of energy customers in the UK.

However, OVO Energy may soon disrupt this long-standing group, proving that the energy market is, now more than ever, very changeable. In 2013, the big six had an almost total monopoly over the energy market, but now that there is anywhere between 40 and 70 suppliers available, your options are virtually endless. However, that number is also almost constantly changing, as many small energy suppliers have gone bust – a risk worth considering when you change supplier, though not one that should rule out these smaller businesses.

Do I have to do something different to change suppliers?

If you have decided that smaller is better, then you’ll be pleased to know that switching is just as easy as it is with any other supplier. Some companies still value the direct approach, so you can call them directly and make the change, but most will be listed on energy comparison sites right along with the big six.

Whether you use a comparison tool or manually shop around, you should compare energy deals from all the brands on your shortlist. Factors such as location can change your quote quite significantly from the estimated, generic quotes you see on brand homepages. 

Changing to a small supplier doesn’t make you exempt from the exit fees that come with your current tariff shortlist, some small energy suppliers do offer to pay this for you as further incentive.

Are small energy suppliers cheaper?

Small energy suppliers have a reputation for being more affordable than the big six, and in many cases this is true. There are many reasons for this, though one of the key factors is the allowances made by the government for smaller energy suppliers.

Due to the government wanting to encourage competitiveness in the energy market, and therefore create better pricing for customers, small energy suppliers are exempt from the Energy Company Obligation (ECO), a fee placed on energy companies with the aim of lowering carbon emissions. With the money saved from exemptions like these, small energy suppliers can pass savings onto the customers. Small companies, naturally, also have lower overheads, so savings can also be made here. However, exemption from the ECO doesn’t mean these suppliers do not value green energy. In fact, many small energy suppliers get energy from renewable sources. 

You should bear in mind that some of these exemptions may be unsuitable for your circumstances. For example, while big six suppliers must offer the Warm Home Discount, small suppliers are not obligated to do so, even if you are eligible.

Are small energy suppliers greener?

Green energy is a big topic at the moment, and so many new suppliers entering the market make sure to offer this feature to potential customers. The level of commitment to renewable energy can range from 100% renewable electricity as standard, to having just a few plans with green power credentials.  If you want to change supplier in order to be greener, then you should compare energy deals and refine your search to green energy suppliers. 

Many small companies model a whole ethos around renewable energy, which makes them a highly appealing choice, but some members of the big six also have renewable offerings. 

Aren’t small suppliers more likely to go bust?

In 2019 alone, almost half a dozen small energy suppliers went bust. That said, the risk shouldn’t stop you from taking advantage of a great deal. If your company does go bust, Ofgem will step in to place you on a new tariff with a new supplier – this is a plan you are free to leave without exit fees, so you can compare energy deals and find a better supplier if you wish. There will be no disruption to your service, the only difference will be that you may have to pay a slightly higher bill for the month the business fails, as the ‘deemed’ tariff that the Ofgem-selected supplier places you on will likely be more than your previous plan. 

Essentially, if you stand to save money or enjoy green energy with a small supplier, it may be worth the risk. After all, suppliers like Bulb have grown rapidly despite only forming in 2016, so there are plenty of success stories for small suppliers too. 

Things to consider before you change supplier

Some small energy suppliers may offer great deals but do so with limitations. Prepaid meters, Economy 7 tariffs and smart meter rollout, for example, may not be offered by the smallest companies. Other extras that the big six can offer, such as boiler cover or EV tariffs if you have an electric vehicle, are also rarely available under these suppliers. There are also small suppliers like Ebico who have been in the market for much longer than most small-scale companies, but who specialise in helping customers who are dealing with fuel poverty. It may therefore suit your circumstances better to opt for Ebico if you are part of this group, as they will offer better customer service and extra help compared to others. 

Who is the best small energy supplier for me?

The answer to this one is the same as it would be to any decision regarding the big six. You should create a set criterion for what you want from your provider and keep it in mind as you look to change supplier. Whether you value green energy, low prices, great customer service or a mix of the above, the key is to compare energy deals and do your research on each supplier. While small companies do not have the track record of the big six, sites like Trustpilot should give you a good sense of their overall dependability. 

Bjorn GriffithDec 9th 2019