The renewable energy supplier Bulb has thrown the gauntlet down to the rest of the sector by announcing a cut to its standard variable tariff (SVT).
The supplier has claimed to be the first to cut SVT prices this year, and will reduce its rate by 3 per cent from 24 April onwards, which Bulb claims is due to falling wholesale energy costs.
And Bulb have also challenged their competitors to follow suit, adding that if all the other energy companies in the UK cut their SVT rates by the same amount, UK households would save a total of £770 million.
Company co-founder Hayden Wood said it was “outrageous that the big suppliers are refusing to pass on these savings to customers”, as energy costs continue to tumble.
“The fact that a startup like Bulb has been able to power our prices by three per cent shows what’s possible,” added Wood. “And we’re calling on everyone else to do the same.”
Earlier this month, EDF Energy announced it will implement a 9 per cent increase to the price of electricity for customers on its standard tariff from 21 June.
The move was promptly condemned by consumer groups, such as Which?.
“Bulb’s cut is the first price reduction this year, laying down the gauntlet for others in the market to follow suit now that wholesale prices are starting to fall,” said uSwitch.com’s energy expert, Claire Osborne.
“Bulb’s price cut shows how a competitive market can work, proving that competition – not heavy-handed market intervention – is the most effective way to drive down prices for consumers.”
There have also been numerous reports that the government plans to cap energy price increases in a consumer green paper, although it is not clear when the paper will be published following the recent announcement of a snap general election.