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Price watch

Green energy doesn’t have to cost more: the price cap should protect everyone

Illustration of wind turbines and the sun

Ofgem has announced it’s awarding permanent derogations from the price cap for three green suppliers.

The price cap limits how much suppliers can charge for their energy

The price cap sets a limit on the amount suppliers can charge their customers for energy. It was introduced last year. At Bulb, we’ve always been big supporters of the price cap. We believe it’s right that consumers are protected from overpriced tariffs and unfair business energy practices. Too many suppliers offer teaser rates to new customers, only to switch them onto much higher rates later. This isn’t right, and it penalises customers for their loyalty.

Suppliers with a permanent derogation are exempt from the price cap

The current price cap allows the regulator, Ofgem, to exclude any tariff it considers to support the production of renewable gas or electricity from the cap. This is called a derogation.

At the beginning of the year, Good Energy, Ecotricity and Green Energy UK were all given temporary derogations. The announcement today means their derogations will last until 2023, when the price cap is due to end.

We believe the price cap should protect every household

In March we wrote about our concern around the green loophole. We were worried it could be exploited to charge people unfair prices for their energy. And we were especially concerned that these tariffs could be awarded permanent exemption from the cap.

We still see no reason why there needs to be an exemption for green tariffs in the price cap. It perpetuates the unhelpful myth that green energy has to cost more. Bulb is living proof that energy can be cheap and green. Our single, 100% carbon neutral tariff is set over £250 below the April price cap level. As always, consumers should shop around to get the best deal for their energy.

We’d love to know your thoughts. Stop by the Bulb Community and let us know what you think.