Green energy firm on course to challenge big six despite price hike | Business

A green energy firm has claimed it is on track to become the largest challenger to the sector’s big six before Christmas, despite raising prices for a third time this year.

Bulb, which has focused on affordable renewable electricity and customer service, has attracted more than 750,000 customers, up from 70,000 a year ago.

Hayden Wood, a former management consultant who co-founded the company with former Barclays energy trader Amit Gudka, said the firm was on a trajectory to overtake First Utility and Ovo within the next three months.

First Utility has 825,000 customers and launched in 2008, while Ovo has 890,000 and started in 2009. Bulb was founded in 2015.

The claim comes as the company announced a huge 11% price rise on Monday, citing rising wholesale costs.

Wood said the speed of growth had surprised him and had been challenging at times. “It’s been hard. We didn’t think we would do this [so quickly] when Amit and I were raising money from friends and family in 2015.”

Robert Buckley, an analyst at Cornwall Insight, said he did not think the price rise would harm the firm’s growth. “Previous price rises have not stopped Bulb’s growth. Given the general move up in prices, I’d be surprised if this one did,” he said.

Wood said the secret to success had been to maintain customer service while rapidly expanding, a formula other startup suppliers have been unable to fulfil.

Growth has been driven by word of mouth and a referral scheme that pays existing customers, ‘members’ in company parlance, £50 to recruit new ones, who also get £50.

“We see no reason to stop this,” said Wood, when asked if the referral fee was sustainable.

The success has also prompted increased attention, including a recent report that the firm is gearing up for a sale. Wood rejected that claim, saying there is “no possibility” of a sale.

He is sanguine about new threats posed to the firm’s growth, from both ends of the market. “I think we’ll be alright,” he said, referring to the merger of npower and SSE, and oil and gas conglomerate Shell buying First Utility.

At the smaller end of the sector, Wood said he was puzzled that new challenger firms were still launching with electricity tariffs that included fossil fuels.

“It still really surprises me they have one green tariff and one brown tariff. Why wouldn’t you just have something that your company stands for?”

It has not all been plain sailing for Bulb. The company was reprimanded by the energy regulator for being slow to offer prepayment meters and is now big enough that its price hikes this year made headlines.

While focused on offering one green tariff to consumers, it is branching into new areas. Two key ones are business energy customers and exploring how to leverage the combination of solar power, Tesla-style household batteries and electric cars.

“We’re beginning to start up some of those businesses. I don’t think it’s going to be overnight,” said Wood.

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