Bulb Posts Lower Losses Amid Sign-up Blitz

Bulb narrowed its losses to £59 million in 2019-20 as it grew its customer base and revenues.

The green energy supplier’s revenues hit £1.521 billion for the year ending in March 2020, up 85% from £823 million posted for the 2018-19 financial year. The upswing in revenues was so dramatic, Bulb was named Europe’s fastest-growing company by the Financial Times, with a compound annual growth rate of 1,159.3% between 2016 and 2019.

Revenues were bolstered by a rush in signups which took Bulb’s customer numbers to 1.66 million last March, up from 1.14 million in March 2019. Fully 15% of customer switches in 2019 were to Bulb, part of an exodus from the traditional largest suppliers to green or low-cost competitors. Bulb now has more dual-fuel customers than struggling Big Six supplier npower, now owned by E.ON.

As of 2021, Bulb is thought to control 6% of the energy market, serving around 2 million UK households. It’s also launched in France, Spain and Texas, part of an ambitious goal to reach 100 million customers around the world by 2030.

Bulb supplies 100% renewable electricity and carbon-neutral gas, including a portion of green gas. However, its green credentials aren't unimpeachable.

While Bulb has power purchase agreements (PPAs) with renewable generators to meet up to 40% of its members' demands, it meets the rests of this consumption with controversial Renewable Energy Guarantee of Origin (REGO) certificates, which has led to accusations of "greenwashing." Bulb is the UK's largest buyer of green gas for domestic customers in the UK but still uses mostly fossil fuel gas, with its emissions offset by carbon reduction projects.

To facilitate its expansion, Bulb has grown its workforce to 1,000 and opened a new office in Brighton in October 2020. Most of this staff transitioned in remote working last March, with Bulb noting that it didn’t furlough any employees.

Bulb is still posting net operating losses but they’ve shrunk despite significant investment in technology and expansion. In the 2018-19 financial year, Bulb lost £129 million.

Co-found and chief executive Hayden Wood said the supplier’s latest accounts show consumers are “voting with their feet for green energy, fair prices and excellent service.”

“As well as increasing our member base, we’ve continued to grow our revenue and keep investing in our team and our global expansion. Our team’s grown to over 1,000, our international markets are growing fast and we’re looking forward to launching in more new markets soon,” he added.

The annual results suggest choppier weathers may be ahead, however. Bulb expects customer defaults and bad debt to increase in next year’s financials as a result of the coronavirus crisis. The company is closely monitoring the situation but is “unable to predict the future impact” at this time.

Ofgem is allowing energy companies to add £23 to the price of their default tariffs, to reflect these high levels of customer default, part of a £96 increase in the energy price cap to take effect from April.

Bulb may also see customer numbers suffer as a result of the two price hikes it imposed in 2020, adding a combined £75 to members' bills as other suppliers trimmed tariff prices.