Energy UK and BFY Group published a report on 14 April 2026 calling for a reset of the retail energy market. The report, Demand better: A smarter, fairer energy retail market, argues that the current market is not set up to deliver the government's clean power ambitions, and sets out policy solutions covering regulation, debt, distributional inequality and pricing1.
The report states that supply licence conditions and industry codes now span nearly 10,000 pages of "excessively prescriptive requirements", and that Ofgem's preference for input-based regulation deters investment1. It says household energy consumers owe suppliers £5.5bn and rising, and that over half of all households are now on the price cap, leaving suppliers with compressed margins and unengaged customers1. On pricing, it states that over 50% of the bill is made up of pass-through charges suppliers cannot influence1.
The report identifies structural barriers to participation. It says housing tenure limits the ability of 5.4 million private rental households to install technology such as heat pumps or EV chargers, and that digital exclusion affects approximately 3.1 million households lacking internet access, with at least 2 million more facing barriers from inadequate devices, unaffordable data or poor digital skills1. It warns that without addressing these barriers the transition risks creating a two-tier system where benefits flow to affluent early adopters while costs fall on those unable to participate1.
Among its recommendations, the report calls for a comprehensive supply licence review, light-touch licensing for flexibility service providers, and clear rights to half-hourly consumption data subject to consumer consent1. It proposes that network cost recovery shift from volumetric charges to capacity-based standing charges, and that policy cost allocation shift away from electricity bills toward progressive funding mechanisms such as taxation, building on the Renewables Obligation announcement in the 2025 Budget1. It also calls on Ofgem to publish a multi-year roadmap for the evolution of the price cap, specifying whether protection will narrow, transition to social tariff models, or remain universal1.
"The Energy UK and BFY Group report Demand better: A smarter, fairer energy retail market makes the case for a reset and reimagined retail energy market that will unleash an innovative, competitive, and thriving sector that not only supplies affordable, abundant clean power but also improves customer experience and strengthens consumer protections."
The report notes that the UK has removed over 80% of emissions from the power sector since 1990 and built over 60GW of renewables, and that government policy is to decarbonise the power sector by 2030 and reach Net Zero within the next 25 years1.
| Measure | Figure given |
|---|---|
| Household energy debt owed to suppliers | £5.5bn and rising |
| Households on the price cap | Over half of all households |
| Share of bill made up of pass-through charges | Over 50% |
| Private rental households limited by tenure | 5.4 million |
| Households affected by digital exclusion | Approximately 3.1 million, plus at least 2 million more |
| Supply licence conditions and industry codes | Nearly 10,000 pages |
Why it matters for households
The report's central claim is that the rules governing retail supply shape what tariffs and services households can be offered. It argues that the price cap, which now covers over half of households, restricts the development of and demand for dynamic tariffs, time-of-use pricing and bundled services, and that suppliers lack pricing power over most of the bill1. For a household considering a time-of-use tariff or flexibility service, the report's proposals on half-hourly data access and peak-to-off-peak differentials are the parts that touch directly on what can be offered.
The proposals on network and policy costs bear on standing charges and unit rates. Shifting network cost recovery to capacity-based standing charges, and moving policy costs off electricity bills, would change how costs are distributed between households, including those with solar and batteries1. The report also raises on-bill financing, under which households could adopt EVs, batteries and heat pumps without upfront capital and repay through energy savings over equipment lifetimes1. The rules that would govern such arrangements sit within the wider framework covered in the site's guide to UK home energy regulation and policy, and consumer protection in this area is dealt with by the Renewable Energy Consumer Code.
What happens next
The report sets out recommendations to government, Ofgem and industry rather than dated commitments. It calls on the Department for Energy Security and Net Zero to set out strategic priorities for retail market reform through the Strategic Policy Statement, and on Ofgem to conduct a formal impact assessment before starting work outside its planned forward work programme1. No timetable for these steps has been reported.
Sources1 cited
- Demand Better: A smarter, fairer energy retail market - Energy UK, energy-uk.org.uk