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Is collective energy purchasing beneficial?

Last updated on 9 November 2018

The principle that drives collective energy purchasing is: “There is strength in numbers”. You may recall that collective energy purchasing involves a large number of consumers, grouped in an association, a company or even a local authority, put out a call for tenders to various energy suppliers.

The supplier that offers the best price gets the contract and the customers.

But the rates obtained from suppliers in this way are not necessarily the most financially beneficial for each individual situation. This is clearly shown by a study conducted by Brugel, the Brussels regulatory authority, in 2017.

What are the benefits of collective energy purchasing? 

Rates

Collective energy purchasing allows consumers to exert pressure on the suppliers to get a discount price.

Convenience

Collectively purchasing your energy means you don’t have to spend time and effort conducting your own research and complying with all kinds of formalities, as the organiser of the purchasing group deals with all that.

But the benefits should be qualified…

The price worked out by suppliers is based on average consumption. If your consumption is too far from this average level, it will probably prove more beneficial to negotiate a quote tailored to your situation.

In addition, only a limited number of suppliers play along and respond to calls for tenders from bulk purchase syndicates. And it is not necessarily the cheapest supplier on the market that ends up being chosen.

Finally, when it comes to convenience, switching suppliers could not be simpler nowadays: just a few clicks or a telephone call and a signature are all it takes. The new supplier takes care of everything, as required by law. You never need to worry about cancelling the contract you have in place with your old supplier and you do not need to state any kind of reason why you are leaving.

When is collective purchasing financially beneficial?

If you have not got the time to compare prices yourself, joining a collective energy purchasing syndicate may well be a good idea. However, you should know that, like other kinds of convenience, it comes at a price and you might not necessarily get the cheapest offer for your situation.

Collective purchasing, though, may be beneficial for the purchase of complex products, such as solar panels.

Finally, you should also be aware that signing up to a collective purchase does not mean you are under obligation to accept the contract the syndicate has chosen in response to the call for tenders. Do not hesitate to compare the rates you are offered with those to be had on the market, by using the official price comparison tool provided by the regulator in your region, i.e.:

Read also: What are my rights with respect to my energy supplier?

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