While other suppliers are trimming bills, Bulb Energy has announced its second price hike this year.
Customers of the fast-growing renewable supplier will pay an average of £53 more a year for their electricity from October, after seeing their bills rise by £22 a year in March. The hike will impact Bulb’s dual-fuel, electricity only and pre-payment customers.
Bulb attributed the latest bill increase to recovering wholesale electricity prices and the cost of supporting government schemes, such as those bolstering renewable generation, tackling fuel poverty and upgrading energy networks.
Bulb said that despite the recent hikes, its bills would still be cheaper than default tariffs offered by its competitors and £75 below the energy price cap.
Ofgem is dropping the price cap to its lowest level yet to reflect cratering wholesale energy prices due to dampened demand during the coronavirus lockdown. But Bulb said prices had recovered significantly since their nadir in April and the cost of supplying homes has “gone up significantly” over the last five months.
Bulb “held off passing on the cost for as long as possible,” Hayden Wood, co-founder and chief executive said.
“We’re committed to pricing fairly and transparently,” he added.
Bulb is one of a crop of upstart green suppliers, including Ovo and Octopus, which have emerged to challenge the dominance of the Big Six, attracting hundreds of thousands of customers and multi-million-pound valuations. Bulb claims to serve 1.6 million households.
Investment from hedge funds Magnetar Capital and DST Global gave Bulb a valuation of £350 million in late 2018. According to industry sources, the supplier is now targeting tech investors in the US, hoping to clinch an even higher valuation.
However, its books—last year showing a £129 million loss—and lack of its own technology mean Bulb might struggle to sway Silicon Valley investors. Competitor Octopus gained unicorn status--a valuation of £1 billion--largely on the strength of its innovative cloud-based Kraken platform.
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