Momentum energy has closed the books to new customers amid a tough market for energy due to high wholesale prices, but the small energy retailer says demand for GreenPower isn’t going away and that it will be back as soon as prices abate.
According to research from Finder, wholesale electricity prices are six times higher than they were in April 2021 – and it looks like clean energy retailers are feeling the bite.
Owned by Hydro Tasmania, Momentum Energy was featured in Greenpeace’s Green Electricity Guide alongside community-owned electricity retailer Enova Energy which took out the top spot.
Enova announced in June it was placed into voluntary administration, after it was unable to secure suitable wholesale energy price hedging following the ending of an agreement with Diamond Energy and limitations on it due to a cap on customer pricing.
Administrators now say the company has avoided liquidation through an arrangement with fellow retail startup Energy Locals. As part of the new deal approved by creditors, Enova customers were encouraged to switch from their appointed retailer of last resort (EnergyAustralia or Origin Energy) to Energy Locals.
Now Momentum Energy has revealed to The Fifth Estate they are not taking on new customers due to high energy prices, but reports that there has been no significant loss of existing customers.
However, before closing its books Momentum said that the number of its customers purchasing GreenPower jumped by around 450 per cent in the 2021-22 financial year.
Managing director Lisa Chiba said that the product’s premium price point is still a barrier to entry, particularly for businesses with large energy use – and the current wholesale market conditions have exacerbated this dilemma.
“We know that customers want to support renewable energy, but price has always been a barrier to the take up of GreenPower. It is now particularly acute given the recent rise in wholesale electricity prices and broader cost of living pressures.”
According to internal research carried out for the energy retailer, 17 per cent of businesses want a greener or more environmentally friendly provider, and 52 per cent want cheaper prices or a better deal.
In the 2020 calendar year, GreenPower saw a 34 per cent increase in sales and 16 per cent increase in customers. The government-accredited renewable energy product has around 200,000 customers across Australia.
But Ms Chiba says that the main barrier is a lack of understanding of how it works.
“We know many Australians are keen to find a green electricity provider, but it can be difficult to navigate the options available and the information available can be confusing.
“Whether or not customers can afford GreenPower, we encourage everyone to research and carefully consider their choice of electricity provider.”