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What is a collective energy switch?

What is a collective energy switch?

If you compare energy tariffs, you might see options called collectives. They’re often some of the best-value deals energy suppliers are willing to give. Here’s what they are, how they work, and how to switch.

Peter Earl
From the Energy team
4
minute read
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Posted 6 FEBRUARY 2020

What is a collective, and what is it for?

In the context of energy, a collective is a tariff from a supplier only available exclusively to a specific group of customers. This doesn’t mean an informal group, like friends or neighbours – it’s more organised than that. In the past, collectives have been arranged by councils, national newspapers and, of course, comparison sites for their customers. It's often referred to as collective energy switching.

The idea behind collective energy switching is simple – a group has more bargaining power than an individual, so groups of consumers should be able to negotiate better deals than individuals can. Forming a group allows the organisers to take the large number of customers ready to switch to a supplier and ask to get a special tariff for that group. This type of negotiating is also known as collective purchasing.

Collectives are generally available for a limited time or restricted to a limited quantity (depending on the terms agreed between the organiser and the supplier). As they’re sourced for a specific group of customers, they’re usually not available elsewhere.

How do collectives buy energy more cheaply?

With collective purchasing, the organisation that arranged the group of consumers (like our energy experts at Compare the Market) use the purchasing power of the group to negotiate harder with gas and electricity suppliers. If a supplier has the opportunity to secure large numbers of new customers quickly, they’re far more likely to put their best deals forward and they save money on advertising and marketing costs.

How popular are collective energy switches?

Collective purchasing schemes were popular in 2012 following endorsement by the Government, which also ran its own scheme in October of that year. However, many of the schemes didn’t attract the participation organisers had hoped for. But with energy prices back in the news, there’s been renewed interest in such schemes.

In fact, in 2018 the Government began a new trial of collectives with 50,000 consumers, aiming to get people engaged and make the energy market fairer for everyone.

Does Compare the Market offer collective energy tariffs?

Yes. Over the past few years we’ve secured several successful collective energy tariffs exclusively for consumers switching through Compare the Market. These collectives have seen consumers buying new tariffs and switching their gas and electricity in their thousands. To make sure our best deals are for our loyal customers, only people who have previously bought or quoted for any product through Compare the Market are eligible for collective tariffs.

How do you switch to a collective?

If you complete a quote with us, you’ll see a list of tariffs that are available to you to pick from. If we have a collective offer available, you won’t have to do anything different, it’ll just show up in your results. Then if you're interested, you can switch to it just like any other tariff – it’s as simple as that!

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