The Way We Buy Energy Is Broken.

How Do You Buy Energy?

The way we all buy energy is broken.

When was the last time you bought energy? Probably a few minutes ago, but did you notice it? If you used electricity or are sitting in a heated home/business, you have spent something on energy, you just (probably) haven't paid for it yet.  

We all dread the feeling when we open the first winter (or summer depending on where in the world you live) energy bill. It costs us a wack of money and can mean we're left short at the end of the month, but how did you buy this energy? 

Most of us pay for our energy bills directly, but when is the last time you shopped around for your supplies?  Most of us have been through this process at least once, but it still remains the case that 80% of us do not do this on a regular basis, meaning our suppliers are making extravagant profits at our expense. 

"Suppliers are making extravagant profits at our expense"

For HOMES, most people who have tried to shop around have either used a complicated confusing price comparison site that asks us for lots of information which we don't even know (such as how many kWh you use) or had a person call to the door/phone us about an amazing exclusive offer who then fill in all the paperwork for us. 

This model is broken. Why? Well, for starters, these people/sites claim to be working with us to reduce costs when in fact they are being paid directly by the companies they are switching us over to. There is a slight conflict of interest here. They also do not really care about how much energy you use. In fact, the more you use the better as some of their commissions are increased for big users. They usually tie us into a 12/24 month deal, which may or may not be better for our pockets and then once the contract is over, you default into the more expensive prices.

"There is a slight conflict of interest here."

For BUSINESSES it is even more confusing. Usually you only switch with the "help" of a broker or a person who calls in claiming to reduce your utility costs. We use inverted commas for help as their help is not always aligned with your business' best interests.  In fact it rarely is. Think about it, it is a free service, paid for by the people who these brokers actually work for, the supplier. If you do not pay them, they need to be paid by somebody so it really isn't their fault, but do not be surprised that you are not getting the best rates on the market. 

"We want to fix this."

We want to fix this.  Too many of us are paying too much for our energy. We also need to bring transparency to the energy world and make the move to a low carbon economy.  This will mean we need to make decisions about the types of energy we use, how we can reduce waste/use energy more efficiently and whether we can self generate clean energy on site ourselves.

Next time you go energy shopping, maybe think twice about who is advising you and who is paying them before jumping into an expensive mistake.