Room for Reform: Embedding fair outcomes for tenants in tomorrow’s retail energy market

Room for Reform: Embedding fair outcomes for tenants in tomorrow’s retail energy market 607 KB

Energy policy is often focused on idealised, “typical” consumers - homeowners who have a large amount of control over their energy usage and are able to easily make changes to their property. In reality this will also depend on various other factors like income and motivation, but some households are fundamentally more constrained.

The 20% of people who live in rented homes consistently experience worse outcomes in the retail energy market than other tenure types, including disproportionate levels of fuel poverty. Due to their circumstances and often a lack of control over their energy supply, tenants are particularly at risk from poor outcomes. 

They have also disproportionately borne the brunt of the COVID-19 pandemic, with many seeing a reduction in income, and they are facing a bleak outlook as the cost of living crisis bites, with energy cost rises driven by historically high wholesale prices. 

More broadly, tenants often struggle to feel safe and secure in their properties. One of the main reasons for this is the constant threat of evictions, meaning tenants often don’t feel able to raise issues like repairs or challenge landlords when they aren’t meeting their obligations. Citizens Advice’s broader work around ending Section 21 evictions has consistently highlighted these themes. 

Looking to the future, the retail energy market stands on the brink of a revolution that could improve how people engage with and experience their energy supply. Innovation is harnessing the opportunity that the need to decarbonise and the opportunity of better data represents, with new energy technologies and business models promising to cut bills and increase comfort - to improve fundamentally on what went before. 

The potential for better outcomes in the future retail energy market is significant. However, this will only be delivered if barriers to engagement are addressed as much as possible to ensure a fair transition. Previous research by Citizens Advice explored the characteristics and groups most likely to struggle to participate in the future retail energy market, with renters emerging as a group highly likely to be at risk of exclusion from future energy services.

The fundamental reasons behind this stem from the consequences of wider insecurity and lack of control in the private rented sector. In the current market this lack of control will put over 585,000 renting households at risk of missing out on support, including the Warm Home Discount and forthcoming government energy rebate if they are not the billpayer. With predictions that high prices are set to be a feature of the energy market at least until well into next year, this creates fresh urgency to future-proof protections for renters, including ensuring they can control their energy supply. 

Private Rented Sector Barriers To Energy Market Engagement - Impact Research 4.51 MB