It’s that time of year again, when you turn on your heating and notice how much you’re spending on energy bills. Have you thought about collective switching as a way to save money?
Collective switching is where you and your community (your street, your area or even your block of flats) use a third party to negotiate a better rate for your energy with energy suppliers. As you’re negotiating with energy suppliers as a collective, you have more power than if you were negotiating it for just your home.
The DECC (Department of Energy and Climate Change) first launched The cheaper Energy Together fund in October 2012, which supported the development of collective switching. Since then, more and more communities are getting involved in collective switching as a way to save money on their energy bills.
Collective switching is organised through third parties such as a local authority, housing association or local charity. To find collective switching schemes in your area, go to:
Alternatively, you can Google ‘collective switching in’ and your area.
Note: It should be free to sign up to these schemes, but check the small print just in case. You will need your latest energy bill, information on your tariff and energy use, your preferred method of payment.
Your area or block of flats get together and agree upon the goal for the switch (reduce bills, use a greener source of energy). You need a certain number of people to sign up to the scheme before you can go any further. Once the signing up period is closed, the group’s energy needs are assessed. Energy companies are then asked to take part in a reverse auction to supply your energy. This is just like an auction, except the prices get lower instead of larger. Once the auction process has ended, you will be advised on which supplier has won the process. You then decide whether to switch or not- if you are switching, this must be done by a certain date.
As a consumer, you have more buying power if you buy energy in bulk. As a collective, you have a greater need for power and therefore have greater negotiation power. Before considering if it will save you money, you must look at:
You will need an ‘organiser’ who will negotiate on your behalf. This could be a local authority, a housing association or a charity. When you receive the details of the winning supplier, you should get details of what this includes. Tariffs are fixed but you should see how long the tariff is fixed for, as well as payment methods and how to manage the account, if you accept the new deal. Note: you can’t take part in collective switching if:
You may also be required to pay an early exit fee to your current supplier. Ultimately, the power lies with you- you can choose whether to accept the new deal or not.
Ideally, you need as many people as possible to register their interest for the schemes.
It depends on which scheme you’re signed up with but generally, tenants can take part as long as the energy bills are in the tenant’s name.
For further information on collective switching, you may find this of interest:
It could be that you can’t find a collective switching scheme in your area, but all is not lost. You could save money simply by switching energy suppliers. We’ve written an article here which may be of use.