Good Energy, one of the UK's leading renewable energy suppliers selling 100% renewable electricity and carbon neutral gas, has partnered with Siemens to offer an additional, innovative payment option to its customers. From June, Good Energy will roll out the new Managed Credit solution to around 2,000 of its customers – giving them direct visibility and control over their pre-paid energy usage via a simple web app.
The pandemic has brought growing economic uncertainty for consumers and businesses alike, and bad debt from unpaid energy bills has been accumulating for energy providers. Citizens Advice estimated that between February 2020 and December 2020, 600,000 more households were behind on their energy bills. Pre-paid tariffs remove the bad debit risk for energy providers, but they are costly to service and can hamper the customer experience.
Providers are therefore looking for ways to make prepayment more attractive. Research from Smart Energy GB found that if smart prepayment offers could be cleverly packaged and provide a more convenient user experience, 48% of GB households would be interested in them.
With the Managed Credit option, the customer’s meter operates in credit mode, but the customer pays for energy in advance. The solution leverages existing smart metering infrastructure to deliver a Central Wallet, accessible online via smartphone or computer, which shows the customer’s current credit and makes top-ups quick and easy. Rather than having to worry about the status of their individual gas and electricity accounts, users manage their credit provision in one single energy balance.
As an alternative to traditional prepayment options for customers who do not want additional hardware in their home, Managed Credit digitalises the In-Home Display (IHD) or Prepayment Meter Interface Device (PPMID), whilst the Central Wallet functionality halves transaction costs for the provider and significantly reduces demands on customer services.
The Managed Credit option supports scheduled as well as automatic top-ups when credit is low, so customers can make sure they never run out of gas or electricity. Budgeting tools within the solution provide a structured way for customers to manage their usage. At the same time, Managed Credit enables the energy retailer greater flexibility to provide emergency credit – for example, for vulnerable customers not able to pay instantly but needing immediate access to energy.
Good Energy’s Interim Head of Propositions, Emmanuel Obubuafo, said:
“The roll-out of our new payment service will offer customers a smarter and quicker way to understand their energy usage. This simplified, digital process means paying for your energy use is hassle-free and actively supports vulnerable customers. Siemens has been instrumental in developing this innovative product and supporting the next stage of our digital journey.”
Head of Managed Credit at Siemens, Nick Jones comments: “We’re proud to be working with Good Energy on opening up this new payment option to UK customers. Good Energy is a true challenger brand, committed to 100% renewable energy and Siemens shares this clear focus on sustainability. The UK’s decarbonisation targets can only be met if we keep innovating, helping customers to better engage and understand their energy usage. For too long now energy suppliers have had to make difficult judgement calls between customer experience, credit risk and cost to serve when considering payment options for their customers. Managed Credit strikes a unique balance between these variables and brings energy payment into the 21st century. Our latest white paper – Managed Credit: The Fourth Payment Option highlights the unique risk and cost profile the solution can deliver for energy retailers.”