What is a collective energy switch?

There has been renewed interest in collective energy switching, with thousands of customers signing up. But what is collective energy switching, and how could it benefit you?

What is collective energy switching?

Collective energy switching is a type of energy switching where customers switch to new energy deals as a group rather than as individual households. This should allow them to access cheaper deals than would normally be available because suppliers compete to offer the lowest viable price.

From a supplier point of view, collective switches are beneficial because they allow them to potentially gain a large number of customers all at once, rather than in batches over a longer period of time.

Collective switching was fairly popular in the mid-2010s but had fallen out of favour by the time the energy market crisis began in the autumn of 2021. As the market continues to recover, though, suppliers and customers are beginning to explore the benefits of collective switching again.

How does collective energy switching work?

Collective switches are usually run by organisations that aren’t energy suppliers - for example, price comparison websites. 

The process can be slightly different depending on who’s running the switch, but it will generally work like this.

1. Customers register their interest in the collective switch.

2. Suppliers compete via auction to offer the lowest-priced deal.

3. Customers are notified about the deal that’s available to them in terms of how much it costs and how much they could save by switching to it.

4. The switch is completed in the same way that a non-collective switch would be (within 21 days and without any interruption of supply).

Is it worth taking part in a collective switch?

If you’re thinking about switching your energy deal anyway (e.g. you might be coming to the end of your current fixed deal) and you have the opportunity to take part in a collective switch, it’s worth considering. You can sign up to be notified about the deal that is selected, but there’s no obligation to switch to it. 

It’s important to note that the deal will be exclusive to the group who have signed up to be notified about it and therefore could be cheaper than any of the other deals on the market. This isn’t guaranteed, though. You should always run an energy comparison after receiving any offers via a collective switch to ensure it’s the cheapest deal available to you.