Over the past 2.5 years, more than a million households have been affected by the supplier of last resort
More than a million households have seen their energy companies fail in recent years and that number is likely to increase as wholesale prices rise
- Many small and medium-sized suppliers have left the market
- Safety net means that if a company fails, households will be switched to a new provider
- We reveal the best energy deals on the market that you can switch to now
About 1.7 percent of household energy customers have been saved by the Supplier of Last Resort process in the past two years, new research shows.
According to data from energy analyst Cornwall Insight, between 2019 and 2020, 887,000 domestic customers were supplied by a company that exited the market through SoLR.
It also found that in 2021 alone, an additional 410,000 customers were affected by the SoLR process — meaning more than a million households received gas and electricity from a bankrupt company.
If wholesale prices rise, it could cause more smaller companies to exit the market, with tight margins and fierce competition.
More than a million domestic customers were affected by the Supplier of Last Resort process
The Supplier of Last Resort procedure was established in 2003 to ensure that in the event of a supplier outage, affected domestic customers are assured of continuity of supply.
This means that if a company stops trading, consumers will get another provider who will automatically take over their offer and make sure they never run out of power.
In recent times, the process has been widely used due to the large number of small and medium-sized suppliers that have collapsed.
Providers that have failed include Tonik, Toto Energy, Solarplicity, Our Power, GnERGY, and Go Effortless.
Naomi Potter, Analyst at Cornwall Insight, said: “In the first half of 2021, 1.5 percent of domestic retail customers were already served by suppliers subject to the SoLR process, almost the same as in all of 2019 and 2020 together.
‘This figure is largely the result of the departure of Groene Netwerk Energie at the end of January.
“EDF Energy was appointed as SoLR for the supplier’s 360,000 customers, making this the largest SoLR exit since the mechanism was first introduced.”
The energy price cap is expected to rise by £150 when revised in August, experts say:
She added: “The regulator has responded to the challenges of exiting the market with the introduction of stricter supplier entry tests in June 2019, followed by the changes to the supplier license assessment that came into effect in early 2021.
“However, this is unlikely to change the market situation immediately, and looking ahead, rising wholesale prices and continued Covid-19-related effects point to a difficult year for suppliers, with further SoLR exits on the horizon.”
The energy price cap will also be revised next month, with experts warning that the cap is likely to rise by £150 – the biggest increase to date.
The rising limit is mainly due to the wholesale energy market, where gas prices have risen 55 percent since January.
They are now at the highest level since 2005 and continue to rise.
As a result, customers are encouraged to use price comparison sites to see if they can save money on their utility bills by switching to a different provider or flat rate, as these tend to be cheaper than standard rates.
Best energy deals on the market
All current best value energy rates are fixed, which makes clear how much cheaper they are than standard plans.
The best energy deal on the market right now is with the challenger Zebra Power, on the Zebra Fixed Rate April 2022 v1 Paperless rate averaging £1,000.96.
The second cheapest fare is Avro Energy’s Simple and Flow12M deal which costs £1,035.53.
The two best deals aren’t green, though, so those who want to be more eco-friendly may choose to look elsewhere.
The third best deal is with Utility Point on the Just Join Up 21 12M Fixed Wk28 rate which is green and costs £1,035.67 on average.
Eon and its offshoot Eon Next are the only Big Six vendors to make the list with its Fix Online v46 and Next Online v6 deals both costing £1,126.18.
|Supplier||Plan||Type||End date||Green||Exit costs||Average price|
|zebra power||Zebra Fixed Rate Apr 2022 v1 Paperless||made||12m||No||60||1,000.96|
|Avro Energy||Simple and Flow12M||made||12m||No||0||1,035.53|
|utility point||Join Up 21 12M Fixed Wk28||made||12m||Y||72||1,035.67|
|Outfox the market||21 15.0 . repaired||made||12m||Y||0||1,077.01|
|GOTO.Energy||Direct Control Green July 2022 V3||made||12m||Y||80||1,077.65|
|Bristol Energy||BE Super Green 23 June number 13||made||25m||Y||0||1,121.08|
|job energy||Blue Fix April 12 – 21||made||12m||Y||60||1,122.08|
|E.ON||Fix Online v46||made||12m||Y||60||1,126,18|
|E.ON Next||NextOnline v6||made||12m||Y||0||1,126,18|
|Source: Uswitch (prices correct as of July 16, 2021)|