The impact of increased prices caused by high wholesale costs, coupled with the cost-of-living crisis, is having a major impact on consumer energy debt. According to energy supplier EDF, this is affecting its customers as energy debt continues to rise.

The company has seen an increase in the number of customers with a cash/cheque debt – those who pay when they receive their energy bill for what they have used in the previous quarter. Since last year the company has approximately 470k customers with a debit balance on their account totalling £518m, an increase of over £70m compared to this time last year.

To mitigate this EDF states it is investing all its profits back into Britain to help bring down future costs for customers and the country achieve net zero, while remaining committed to supporting those customers most in need. The energy supplier has spent £27m since last October on initiatives to help vulnerable customers, including direct financial assistance to customers in debt. EDF’s measures have helped reduce the average customer debt of those it supported by 21%, but this has not reduced the overall number of customers falling into debt from increasing.

EDF believes there is one aspect the government can do that will positively impact millions of houses, namely to make changes to the Great British Insulation Scheme GBIS).

This scheme provides funding for loft, cavity, and wall installations, and should also be reformed to help customers save cash and carbon for the long term. The scheme is vital given that the price of each unit of energy remains well above previous levels and provides an opportunity to cut bills permanently by helping customers to use less by insulating their homes.

EDF states it has installed over 50% of measures across all suppliers as part of the GBIS scheme, more than any other supplier. However, due to scheme design restrictions, many homes that could benefit from support, are either not eligible or not economically viable.

Philippe Commaret, Managing Director of Customers at EDF, said: “Our reliance on globally traded fossil fuels means that prices have unfortunately increased significantly over the past few years. And while the Ofgem price cap has reduced over the previous months, our price cap forecasting service predicts that October’s will increase by £146 to an average of £1,714 and increase again in January.

“We continue offering assistance to those in need, providing debt relief alongside a range of financial support services, and kept our fixed prices as low as possible to help, but with costs rising customers need urgent assistance in both the short and long term.”

EDF has also put forward several recommendations to the government which include:

  • Allowing the installation of more than one measure with GBIS as currently only one measure per home is allowed. The company believes that allowing multiple measures in homes that require them would help customers lower customers energy bills and carbon footprint, as well as reducing the costs of delivering the scheme.
  • Include heating control measures e.g. room thermostats, as a secondary measure for all customer groups. Heating controls are cost effective to install and can bring a big benefit on bill and usage reduction for households.
  • Extending the GBIS scheme eligibility to include Council Tax Band E homes in England, which would bring in scope an additional 2.4 million homes – representing an extra 10% of all homes in England. Currently the eligibility criteria is Council Tax Bands A-D. This could open up much needed support to customers, including those on low incomes, struggling with the cost of heating a larger home.

Philippe Commaret concludes: “We are supportive of the Great British Insulation Scheme and its objectives to help customers insulate their homes. However, GBIS needs improvements to enable suppliers to extend the benefits to more customers so they can also improve their homes’ energy efficiency.”