James Lee
- 14 June 2022

Energy consultants, micro businesses & improving the energy market

What is a micro business?

A micro business within the UK according to Ofgem is defined by either its annual consumption or number of employees and annual turnover.

Micro businesses form a strong part of the overall economy within the UK, with over 90% of total enterprises within England being micro businesses.

Energy suppliers will consider your company to be a micro business if it meets one of the following criteria:

• You consume less than 293,000 kWh of gas
• You consume less than 100,000 kWh of electricity per year; or
• You have fewer than 10 employees and your annual turnover or annual balance sheet is no greater than €2 million

What is an energy consultant?

Two out of three micro businesses use an energy consultant when choosing their current energy contract, as stated by Ofgem.

Consultants work with a business on a contractual basis to search the market and help source competitive prices and contracts from energy suppliers.

Using a consultant can bring with it numerous benefits, including taking away the pressure from already busy business owners by taking the time to review and negotiate the contracts. The consultants will already have relationships built with the suppliers. Some consultants also provide other services, such as analysing the consumption and bills for the customer.

Improving the market

More is being done to improve micro businesses’ experience of the energy market, including measures to make energy consultants more transparent and accountable for their actions. With the increase of measures, the aim is to push poor practices out of the market, exercised by the minority of energy consultants, ultimately improving trust and engagement with micro businesses.

Ofgem will be implementing a number of licence changes for suppliers. These will impact how they produce contracts with micro businesses and their consultants:

Contractual terms: strengthening existing rules around the provision of terms to ensure customers receive key information both pre and post-contract
Consultant transparency: consultant commission costs are to be displayed clearly on the principal terms both pre and post contract
Dispute resolution: suppliers will only be allowed to work with consultants that are signed up to dispute resolution schemes
Banning notification requirements: suppliers will be banned from requiring micro businesses to provide notice that they want to switch suppliers at the end of their contract, except in the unique case of Evergreen Contracts
Improving awareness: Ofgem and Citizens Advice will work together to create and update information so that micro businesses can access up-to-date guidance and advice to help boost awareness

Ofgem has stated its approach brings regulation in the energy retail market in line with other sectors such as general insurance.

Crown Gas & Power values everyone they work alongside. Our key focus is providing a first-class customer experience and we are always looking to improve in what we do and how we do it, to help create a clearer, simpler process for all our customers.

To find out more about Crown Gas & Power and how we can help your business, please do get in touch on 0161 762 1883.