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Domestic Energy Debt Reaches Record £3.7 Billion

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Complaints Customer Service

Closing the gap between complaint volumes and service ratings to save £m’s

There's generally little correlation between customer service ratings and complaint volumes for energy suppliers. A good Trustpilot score doesn't typically mean less complaints, but as we show here, suppliers can save £m's by closing this gap.

Debt

Typical DD customers are ~1.7x monthly payments in credit

As we head into winter, typical Direct Debit (DD) customers are in credit by ~1.7x their monthly payment. With c.70% domestic energy customers choosing to pay by DD, payment adequacy is critical for supplier health. 

Debt

Domestic energy suppliers faced £1.6 billon cash coverage deficit in June 2024

By combining Ofgem's latest data on customer credit with their recent market debt figures, BFY Group analysis shows domestic suppliers faced a £1.6bn shortfall to the target cash reserve in June 2024 - an increase of £1.4bn from 12 months before.

Transformation MHHS Smart

Getting operationally ready for change in a dynamic energy market

Avoiding expensive delays is key in any change programme, and the risks are getting greater with smart targets and MHHS on the horizon. Often, suppliers have the right idea on what to change, but fall short in realising benefits due to how the change is delivered. Here, we show why operational readiness is key to nailing this delivery, with five focus areas to sharpen your approach.

Energy Transition Strategy and Commercial

Quantifying the investment needed for cheaper bills under GB Energy

GB Energy's ambition to reduce bills and make Britain a 'clean energy superpower' is welcome news. But substantial private investment will be needed, if the potential savings pledged by Labour are to be realised. Using a very high-level business case, we've quantified the scale of investment that may be required.

Energy Transition M&A Strategy and Commercial

Capitalising on new M&A opportunities with renewable energy

With Labour leading the drive towards clean energy, we're expecting to see an uplift in M&A activity related to renewables throughout the rest of 2024. Profits, economies of scale, and enhanced customer engagement are on offer to those who capitalise on the opportunities.

Energy Market

Price Cap rising to £1,717 in Oct-24, savings available to those who fix now

Ofgem have today (23 Aug) announced a 10% increase (£149) in the headline Price Cap, which will rise to £1,717 for a typical Direct Debit (DD) customer from October. It’s the highest level since Q1-24, and follows two consecutive falls.

Transformation

Differentiating the customer journey in energy’s era of ‘similar servicing’

Market share gain and great customer service are becoming increasingly linked in Energy. But as suppliers invest in new operating systems, with many opting for the same or similar providers, how will suppliers differentiate their servicing offering to create a competitive advantage?

MHHS Operational Turnaround

MHHS could pose a major commercial risk for suppliers

Market-wide Half Hourly Settlement (MHHS) has the potential to pose a major commercial risk for suppliers, with a risk of overpaying for energy purchases by up to 8%.

Energy Market

Price Cap to increase 10% in Oct-24, but annual bills stay flat

Ofgem's headline Price Cap is set to increase 10% this Winter (~£140 rise from October-24), but demand-weighted annual bills are expected to remain flat. Based on our projections, customers' annual bills should be ~£1,700 from 01 October, staying unchanged since April-24

Debt

Optimising your DCA strategy to mitigate rising debt

Domestic debt keeps rising, and engaging customers through tailored journeys is crucial to take control of the situation. Refining your approach to DCAs can drive these improvements, supporting your internal efforts to better manage customer debt. We've outlined three steps here to help maximise results from your DCA relationships.

Energy Market Energy Transition

Average solar payback takes 14 years - optimising efficiency is key

Recovering install costs for domestic solar panels currently takes ~14 years, and customers can optimise efficiency to access the full potential of these systems, as covered here.

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Kelly Payne, Director at BFY Group. Jonathan Paton, Senior Manager at BFY Group. Jon Vincent, Senior Manager at BFY Group.

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