EDITOR’S COMMENT: The collapse of failed electricity supplier Solarplicity Supply is expected to cost households £4.5m, at a time of global recession. Maybe we should stop experimenting with less reliable energy sources so that people aren’t burdened with the fallout?
French state-owned giant EDF took on Solarplicity’s customers after the minnow collapsed in August 2019, and has now asked for Ofgem’s help with the costs of doing so. When an energy supplier goes bust, Ofgem’s procedure is for a stronger rival to be found to take on the customers. That company can then ask Ofgem to recoup costs of the arrangement from the rest of the industry. Suppliers then typically pass this on to customers through household bills.
More than £3.6m of the total £4.5m claimed by EDF is the amount it has paid back to customers who were in credit to Solarplicity Supply at the time of its collapse.
Critics question this arrangement as they believe it distorts the market by taking responsibility away from businesses that have failed, and does nothing to discourage struggling companies from taking advance payments from customers. Herts-based Solarplicity Supply had around 7,500 household customers and just under 500 business customers.
EDF said that “operating a responsible and reliable business” allowed it to “support customers of failed suppliers in ensuring that their finances and energy can be protected.” A spokesman added: “We were pleased to have supported customers of Solarplicity last year to ensure they were protected after they were left without an energy supplier.”