Pretty brutal for bulb:
Non-paywall coverage of similar things
IMO, it all comes down to how those losses are split across customer acquisition and the tech development.
Classic example of everything wrong with the startup industry IMO. Great initial idea, take on the big 6, improve customer service, push renewable energy, improve efficiencies.
So they got investment, proved the business model with the first few thousand customers and grew from there… but don’t let any notion of profitability squander the growth model.
Cut to today, 1 star customer service in the CAB independent supplier review, renewable energy that was largely built off the public not knowing the difference between REGO sourced energy and PPA type suppliers, and a £129m loss!
Compare that to So Energy, who now only have a few hundred thousand customers but consistently rank in the top 5 of customer surveys (if not top them), have great prices, are transparent and continue to develop customer-focused features.
Energy suppliers are commodity trading firms with an administration service bolted on. Bulb’s strategy is incredibly risky where customer service is the main differentiator in a service where the supply is homogenous. Doubt the founders care, they’ve made a fortune no doubt.
Where is the regulator though? Just going to let yet another one go bust?
Well I guess up until now the firms going bust have been relatively small, I’m unsure if any levy has been applied in these cases or whether the new supplier has accepted that more accounts are in debit than credit and so agreed to pay out to customers who did have a positive balance in return for the additional customers.
What would happen if Bulb went bust? Probably an industry wide levy I assume. Anecdotally it does seem as though a fair proportion of Bulb customers are in credit, so if they went under there would be a large number of people looking to Ofgem to get their money back. Ofgem would approve a one-off levy to reimburse the new supplier for those credit balances.
There would be a lot of noise around it though, especially as the poor old consumer would be left to pick up the bill for Bulb’s recklessness.
The ‘tech’ Bulb are developing is being created at far too great an expense if those are the kinds of losses they are posting with ‘just’ 1.6 million customers. Once the ‘£50’ referral fee madness has died down I can see people switching away to smaller suppliers who are able to offer better prices because they don’t have to pay some of the levies.
Makes for interesting reading though.
Just in case you were wondering why lots of people have flagged your post, it is because you’ve put a referral link in there
These need to be put in the ‘referral links’ topic below:
The process is known as Supplier of Last Resort.
Anyone got real world experience of using Agile Octopus?
Bulb got 1 star for the “Easier to contact” category. 3.2 star overall rating.
Does anyone know if octopus will pay your exit fees from you’re previous energy supplier?.
I believe they do. Probably best to have a look on their respective websites.
They used to definitely- I’ve been with them for 14 months and they promised to cover them - I didn’t need it though.
Possibly not though now
Thanks for the information, I’ve contacted them to find this out.
I used to sell gas and electric, and from what I know they used to offer (don’t know if they still do, but probably yeah) 100£ credit if you refer someone (50 for you and 50 for the person you refer to). However I don’t think they pay for exit fees, bulb used to do that but it really depends on the company and the offers they have at any time
Any specific questions?
I’ve been on the tariff for quite some time now. For our use case, it works great! Any specific questions?
This comment is from a different thread but I thought it would be more suitable to continue discussion here. I hadn’t heard of London Power but have just taken a look and for me it’s cheaper than my existing supplier (People’s Energy) and also approx. 10% cheaper than equivalent Octopus tariffs. Any idea what the downsides are compared to going direct to Octopus (if any)?
Looking at London Power terms and conditions, they seem to be exactly the same as Octopus energy. My guess is that Octopus is using this company to target the London market (just a guess), so if this company is cheaper for you I would recommend you go for it as Octopus is quite good for me.
No referral cash, so that may be where some of the price cut comes from.
I made about 50-60% of my annual bill in referrals with Bulb in the last year, so referrals can make a provider essentially unbeatable…
I wish that Ofgem would ban these referral schemes.
I appreciate it can make a significant difference to your net energy cost for the year, but what we can see, from Bulb at least, is that people are pushing a company that has a 1 star service rating, because it satisfies their own agenda.
The conflicting interests in energy switching and the energy market in general is a real concern.