Bulb customers will see their yearly energy costs rise from April, but unlike other energy giants, the green supplier isn’t increasing bills to the maximum permitted under the price cap.
For simplicity, Bulb has just two tariffs, both variable, one for households paying by direct debit and another for those on prepayment meters. Prices on both will rise from 19 April, impacting all of Bulb’s estimated 2 million customers.
Bulb’s Vari-Fair tariff, for those with credit meters, is currently priced at £966 per year for a dual-fuel household with typical use. From April, that will rise £91 to £1,057. However, this is still below the £1,138 suppliers are allowed to charge for standard variable tariffs from 1 April under the price cap.
Bulb’s Vari-Fair Prepay tariff, currently set at £1,010 per year for typical use, will increase by £137 to £1,147. However, this is slightly less than the new £1,156 cap on prepayment tariffs.
Bulb has attributed the price hikes to increases in wholesale energy prices, which it says have risen 31% since September.
A spokesperson for the supplier said: “We wanted to protect prices for our members over the winter, and we’ve held off passing this increase on for as long as possible. We pass on cost savings when the cost of supplying energy falls, so when it drops by more than £20/yr, so will our prices.”
Bulb’s price hikes are more modest than those imposed by the Big Six, the traditional largest energy suppliers. British Gas, EDF, E.ON, Npower, SSE and Scottish Power will all raise prices on their standard variable tariffs to the maximum permitted under the price cap from April.
However, Bulb customers may feel the sting of three price hikes in a little over a year. Bulb trimmed its gas prices by £78 annually last March but eroded some of those savings by increasing electricity bills by £22. In October, Bulb once again increased its electricity prices, by £53 per year.
Ofgem raised the price cap for the first time in two years in response to increased wholesale gas and electricity prices and to offset high levels of customer default caused by the pandemic.
The energy price cap, in force since January 2019, limits the cost of default tariffs, to which customers are often moved when their fixed deal expires.
However, it isn’t supposed to ensure customers the best prices on the market, only protect those who haven't switched recently or have pre-payment meters, both of whom are more likely to be vulnerable, from price-gouging. You can lock in lower prices by shopping around and signing up for a fixed-rate deal.
Bulb’s latest financial results revealed that the green supplier massively grew its customer base in the year ending in March 2020, from 1.14 million to 1.66 million. In 2019, 15% of switches were to Bulb from another supplier.
Revenue grew at a similar clip, making Bulb the fastest-growing company in Europe based on an analysis by the Financial Times. At the same time, its annual losses narrowed to £59 million.
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