UK energy regulator Ofgem has published a report on research it commissioned last year into businesses’ experiences in the energy market.
The study, carried out by IFF Research, aims to improve Ofgem’s understanding of the experience of non-domestic energy customers in the UK. IFF Research conducted a telephone survey of 1,000 British businesses between July and September 2024, followed by 30 qualitative interviews in October and November 2024.
One-third (33%) of businesses reported having switched energy suppliers in the last year, an increase from 2023’s 26%. Medium and large-sized businesses are more likely to have switched suppliers in the past year, at 58% and 44%, respectively, compared to 34% of small businesses and 33% of sole traders. The most common reason given for switching suppliers is price, with 53% of businesses who changed their energy supplier citing price as their reason for doing so.
Over half of businesses (55%) said they felt there was sufficient choice in the range of energy suppliers available to them, a 16-point increase from 2023. Meanwhile, two-fifths (41%) felt like they had a sufficient choice in the range of energy contracts available to them, with roughly the same proportion (40%) saying they felt there was enough choice in the range of energy products and services. However, only 35% of businesses said they felt they had enough options in regard to the price of energy bills, up from 2023’s 29%.
The majority of surveyed businesses said that they were keeping up with their energy bills without falling into debt or arrears, and the volume of businesses struggling with energy costs has fallen in the past year. In 2023, 39% of businesses reported facing difficulties paying their energy bills, a number which has fallen to 27% in 2024.
Customer service is a key concern
While the majority (56%) of businesses felt like they had been treated fairly by their energy supplier, around one in six (17%) felt like they had been treated unfairly.
Businesses with a smart meter, as well as those that did not have problems paying their energy bills, were more likely to feel they had been treated fairly by their supplier at 59% and 63% respectively, while around 35% of businesses who feel that they don’t have a good understanding of what makes up their energy bill believe they have been the recipient of unfair treatment from their supplier.
Overall, 62% of businesses said they were satisfied with the overall service provided by their energy supplier, consistent with reported satisfaction levels of 2023. However, the numbers of businesses reporting being unhappy with their supplier has increased slightly since 2023, with 17% of businesses reporting being unhappy with their energy company in this most recent survey compared to 13% in 2023.
Around 80% of large businesses surveyed said they were satisfied with their supplier, alongside 65% of smart meter users, while around 18% of sole traders/micro businesses expressed being unsatisfied with their energy supplier. Among those that said they were unhappy with their supplier, 34% cited price as a reason, while over half (52%) criticise their supplier for poor communication.
