ACM’s Monitor on the consumer energy market: comparability of contracts must improve
Summary
- Many households are actively comparing energy contracts, yet, at the same time, people do find it difficult to actually make those comparisons.
- Energy suppliers play an important role in providing clear, easy-to-compare, and easy-to-understand information on prices, conditions and sustainability.
- Heat suppliers, too, must communicate in an open and easy-to-understand manner about their prices and service.
The Monitor on the consumer experience of the Netherlands Authority for Consumers and Markets (ACM) reveals that many households are actively comparing energy contracts as well as making their homes more sustainable. That is a positive development, especially considering the increasing number of choices in the energy transition, as well as the opportunities for active consumers offered by those choices. According to the Monitor, there are also many individuals that do comparison-shop and, after comparing different contracts, decide to keep their current suppliers. As a result, the number of people that make conscious choices is higher than what the switching rates suggest. At the same time, ACM does see that many consumers face obstacles when comparing contracts and offers.
Comparing is important, yet difficult
The Monitor reveals that a majority of consumers (59 percent) thinks there are too many suppliers to keep a good overview. More than half (55 percent) of all consumers find it difficult to fully understand prices due to limited offers and welcome offers. More than a quarter of all consumers find it difficult to compare energy contracts and suppliers (28 percent). ACM has often already drawn attention to this issue, and is launching a study to explore how transparency and comparability can be improved. What is important is that households know what options they can choose from, and are able to compare those options. That will not just boost confidence in the market, but also involvement in the energy transition.
Manon Leijten, Member of the Board of ACM, adds: “As the energy transition progresses, the options for consumers increase accordingly. It’s important that consumers are able to make well-informed choices, and are able to compare energy contracts easily and fairly. Energy suppliers play an important role in that process. By providing clear, easy-to-compare, and easy-to-understand information on prices, conditions and sustainability, they can help consumers make conscious decisions.”
Consumers put under pressure in telemarketing calls
Suppliers are able to help households make well-informed choices, but, at the same time, ACM does emphasize that telemarketing calls are not the right way. The monitor reveals that, over the past 12 months, one in four households (26 percent) have been approached in connection with new energy contracts. Almost half of these consumers (45 percent) felt pressured in those interactions, and two-thirds (67 percent) found it annoying to receive unsolicited calls. That is why ACM calls on businesses to stop using telemarketing practices.
Offering greater insight into households connected to heat networks
In the monitor, ACM also looked at households that are connected to heat networks. This group is less satisfied with the overall service provided by their suppliers than are households that heat their homes using natural gas or electricity (54 percent vs. 71 percent). In general, however, heat consumers are satisfied with how quickly and how well their water heats up, but are less satisfied with price levels and consumption overviews. Heat consumers cannot choose themselves from which supplier they consume heat. That is why ACM finds it important that heat companies communicate in an open and easy-to-understand manner about prices and service, and that heat suppliers actually deliver on that, so that consumers have a better overview of what they pay and why. That helps raise confidence in the heat market, and helps advance the energy transition.
Many consumers are actively taking part in the sustainability transition
About half (48 percent) of all consumers are actively taking action to make their homes more sustainable. These consumers have already taken numerous sustainability measures, such as solar panels, heat pumps, or insulation. The most frequently cited reason for making their homes more sustainable is saving money (70 percent) followed by counteracting climate change (44 percent), and becoming less dependent on other countries (34 percent). Households that are not actively taking action to make their homes more sustainable often do want to do so, but are simply unable to, for example, because they live in a rental home (42 percent), and are thus unable to decide this themselves. Consumers that are not actively taking action (or only partially so) to make their homes more sustainable because they find it difficult say they are helped the most by an overview of subsidies (39 percent), personal assistance from the municipality or local government (29 percent), and step-by-step information (27 percent) in accessible language (28 percent).
Significantly higher rates
ACM keeps a close watch on the prices of energy suppliers. In that context, ACM looks at, among other aspects, the price differences between suppliers as well as at the reasons behind those price differences. ACM’s Monitor on the consumer energy market reveals that the prices of the below contracts for households this month are significantly higher than comparable contracts from other suppliers.
| Supplier | Contract type |
| Kikker energie | Variable – natural gas and electricity |
| Ventum | Variable – electricity |
| Energyhouse | Variable – natural gas and electricity |
| Groenpand | Variable – electricity |
| Powerpeers | Variable – electricity |
| Kikker energie | Dynamic – natural gas and electricity |
ACM’s Monitor on the consumer energy market also reveals that several suppliers charge significantly higher prices for their model contracts. This is the case with ANWB Energie, EnergyZero, Hallostroom, Slim met Energie, Easyenergy, Innova, Tibber, and Clean Energy. A model contract is a standard contract with a variable price that can typically be adjusted on January 1 and July 1. Every energy supplier is statutorily required to offer such a model contract, even suppliers that wish to offer dynamic contracts only. The fact that prices of these model contracts are significantly higher says nothing about the prices of other contracts offered by these suppliers.