Are plans for the future energy market fit for customers?
It might not be obvious as your monthly energy bill arrives again, but how energy is delivered to homes is set to change dramatically in the next few years.
For most people, the main thing they want from the energy system is to know they can turn their lights and heating on when they want. The majority of people are loyal customers who have faced higher prices, while even those who do engage generally limit themselves to comparing and switching suppliers. Most of us want greener energy, but relatively few of us have chosen to install solar panels or have switched to a greener tariff.
This could all change in the next few years. Data and technology offer an opportunity to reshape the energy market to make sure the needs of customers come first. The future energy market could be one that people want to engage with feel the value they get from interacting with.
Within a few years it could be possible to trade renewable power with your neighbours or take advantage of far cheaper prices when there’s a surplus of supply. And smart technology should help increase comfort and control over energy use.
As we move towards this future, as many people as possible need to be able to access new offerings, and all customers need to be protected. The government and the energy regulator are already starting to look at how the market will work and what rules need to be in place.
Last year Citizens Advice launched a programme of research focusing on the future energy market to ensure the customer voice is heard in this debate. Some of the key conclusions that have already emerged are:
1. The importance of customer data shouldn’t be underestimated
Customer data underpins how the future market will operate. To give people confidence they will need transparency and control over their data, including why it is being collected and how it’s used. Data should help customers to easily understand and compare the likely total cost of any products and their key features as offerings potentially grow more complex.
2. Customer protection must be central
The potential impact on customers of alternative market models needs to be thought through. As products and services get more complex companies will need to take steps to help people understand what’s suitable for them, and give the right support when things go wrong. And it’s essential that there continue to be clear routes to advice and redress.
3. Everyone should be able to benefit
We’ll all pay for the infrastructure that enables the new market. So it isn’t fair if only the most tech-savvy and well off are able to save the most on their energy. Some people — especially those in vulnerable circumstances — face extra barriers to engaging. The government and regulator must act to minimise these barriers as much as possible, and give those who need it extra support. Even in a reformed market there will be some people who can’t or won’t engage. There must be processes in place that mean they avoid paying a loyalty penalty.
Today we’re hosting a conference to share our thinking on these issues with the industry and continue that debate — we’ll be posting key insights from the research findings on medium, and follow the hashtag #CAFutureEnergy on twitter to find out more.
