Why we are building Luma: the energy company that continually cuts your energy costs, carbon and complexity

Two in three British households are paying the most the law permits for their gas and electricity.

Not because they chose an expensive deal, but because they didn’t choose at all - the market is built on the expectation that they are passive and disengaged.

That is a strange thing to find at the centre of an industry being rebuilt at $2.2 trillion a year - clean energy now attracts nearly double the global investment of oil, gas and coal combined. The capital is already at work. What nobody has rebuilt is the part the customer touches.

Three problems paralyse customers:

• Energy costs. Households pay the regulated maximum while cheaper deals sit in plain sight.
• High intent, low conversion. People want solar and heat pumps; the complicated journey from wanting to owning is where households give up.
• Fragmented markets. Supply, installation and optimisation sit in separate businesses, leaving the household to integrate them.

We built Luma to solve these problems because they are related.

WHY WE ARE BUILDING LUMA

Our drive to build Luma came from being frustrated customers.

I spent three months trying to buy solar and battery panels for my home: several installers, quotes that couldn’t be compared, and a planning risk I raised in the first meeting and asked them to check. Three months of back-and-forth later, having finally agreed to proceed, I was told the job couldn’t go ahead because of the planning restriction I’d raised at the outset.

Nobody in that chain did anything wrong: but no single party was accountable for the outcome, and that is the problem. Nor is it unusual — Which? finds 55% of consumers struggle to trust what traders tell them, and one in five have abandoned home improvements for fear of being let down.

It’s already clear that moving away from fossil fuels will reduce energy costs. But what became clear to me from this process was that achieving this at scale means also moving away from the standard model of supplying energy on one side and renewable tech on the other.

The future-ready business integrates energy supply, renewable tech and then proactively manages and optimises it for customers, built solely to cut energy costs, carbon and complexity for them on an ongoing basis. It’s a one-stop shop where their home or business energy is proactively managed for them.

This is what we are building with Luma, and three things convinced us.

1. The default supply model profits from inertia and is designed around the assumption you won’t get round to switching

When a fixed deal ends, you roll onto your supplier’s standard variable tariff unless you act. Nobody has to do anything to make that happen. It is simply where inaction lands you.

Those tariffs sit at the price cap. Ofgem’s July 2026 retail data put the average standard variable tariff at the large legacy suppliers at £1,663, precisely the cap for that quarter. The cheapest tariff on the market that month was £1,398, and around 81% of fixed deals were priced below the cap. So most households pay the regulated maximum while four in five available deals cost less, and almost nobody moves. Overpaying contributes to high levels of domestic energy debt, which Energy UK puts at around £6 billion, heading for £7 billion by year end.

The other half of the problem is worse. Moving a home away from fossil fuels should be the best financial decision a household can make; instead it is a multi-step project with separate counterparties and nobody fully accountable for the result.

Consumers are not the obstacle. Which? found 62% of homeowners would or might consider solar against 12% who have it, and 33% open to a heat pump against 3% who have one. Cost is the barrier cited most often, with few willing to pay a green premium, especially not during a cost of living crisis. Complexity is another key issue and ends up being a hurdle the people with the least time cannot overcome.

2. The future of consumer energy is proactive management, not just supply or generation

Britain has installed 42 million smart and advanced meters, 72% of all meters in the country, with 92% of them operating in smart mode (DESNZ, June 2026). Some suppliers have launched genuinely clever tariffs that pay you to move your washing to the middle of the night and reactive customer service has significantly improved over the last decade. Comparison sites have made switching about as easy as switching can be made.

And yet Ofgem puts smart time-of-use tariff penetration at 2.8%, and Nesta’s analysis of Smart Energy Research Lab data found 91% of households still pay the same price whenever they use power.

That’s 72% with smart meters but under 3% of the households using this data to reduce their energy costs and carbon, an astonishing statistic that points to a broken model.

Consumers are responsible for navigating this, but it’s not a straightforward ask. Making the wrong choice or no choice at all costs money; time-of-use tariffs reward flexibility, so a household that cannot change its routine can pay more than on a flat rate. No comparison table solves that.

So this is what we mean by proactive: your usage data tells us your consumption patterns and we match this to the cheapest Luma tariff for your household on an ongoing basis. Your energy costs are kept at their lowest without you needing to think about it. Obvious but a genuine game-changer.

Every product in the market today depends on the customer doing the work. We think the next decade of consumer energy belongs to the businesses that can manage this complexity on a bespoke basis for their customers, at scale.

3. Proactive service only works if someone can afford to deliver it

This took us longest to understand, and it is why we don’t think incumbents are the villains. Ofgem builds the price cap by adding up what it costs to serve a household. In the April to June 2026 cap, operating, debt and industry costs came to roughly £274 per customer a year. The allowed supplier profit was around £42.

Try to fund a quarterly human review of every household’s usage, tariff options and solar potential out of that. If this was to be done properly it is easy to see the year’s margin disappearing quickly. So suppliers don’t, and under that cost base they are right not to. The industry has improved at reacting to customer calls, but it cannot afford to proactively help them.

What has changed recently is the cost of doing this work. Admiral credits predictive AI as a major driver of a 12-point loss ratio advantage over its market. Octopus reported AI answering more than a third of its customer emails, the work of around 250 people, and scoring better on satisfaction than human-written replies. Nobody has yet aimed that capability at the harder question: what should this household do, before it thinks to ask.

There’s still plenty we have to be sure to get right to realise this. Klarna found out the hard way - rolling out AI across 2.3 million conversations in a month, then rehiring humans rapidly when quality slipped on the hard cases.

WHY NOW

Each of those arguments has been true for a while. What is new is that tackling all three at once gets you a different business model; tackling them independently just leads to more polished apps.

Banking went the same way. A decade ago, the idea that a startup could compete in an industry that heavily regulated looked implausible. Monzo, Starling and Revolut proved the incumbents’ advantages were narrower than anyone assumed. We expect energy to go the same way, and intend Luma to be one of the proof points.

What we’re building

Luma is the one energy partner households and businesses will ever need, bringing three essential elements into a single relationship:

Energy supply. Ofgem-regulated retail supply on Luma tariffs.

Energy services. Solar, batteries and heat pumps: designed, financed and installed, specified for the property rather than for whatever the installer happens to stock.

The Energy Intelligence Engine. The layer tying the first two together, building and continuously improving a personalised plan for each home and managing flexibility revenue for them too.

The promise is deliberately narrow and testable. We align you with the most cost-effective Luma tariff for your household, reviewed every quarter, without you asking, so your price never quietly ratchets up at month thirteen.

Consumer testing bore this out beyond our expectations. Phase 1 outperformed sector benchmarks by 5x, the best concept at 7x, against an agency view that typical testing varies by 5–10%. People were not just asking for a cheaper tariff. They were asking for peace of mind that they would be on the best tariff on an ongoing basis.

Why this is defensible

Three areas have to work together seamlessly for this to work: regulated supply, renewable services and the technology layer. Incumbents compete in one, most challengers in two. Very few attempt all three from inception, because the real regulatory barriers slow the pace.

This fragmentation is the point. Without the licence you can recommend a tariff but you cannot supply it to a customer; without the services arm you can advise on solar but you are not accountable for whether it performs. Holding all three converts advice into responsibility, and responsibility is the entire product.

It also compounds. Supply data shows how a household actually uses energy; renewables data shows how its system performs. Together they make every recommendation better than the last, from the first customer onwards. The longer a customer stays with us the more their energy costs and carbon are improved.

The opportunity in front of us

Everything needed to build this already exists; what has been missing is a company willing to hold all three layers and be accountable for the outcome. Most households in Britain are paying more than they need to for something they cannot opt out of. That is not a market to be managed; it is the clearest invitation to build a better company we have ever seen. We intend Luma to be the energy company people recommend to their families, not the one they tolerate until the deal runs out.

If you are an investor, an operator, or someone who has spent years in this industry wishing it worked differently, we would like to hear from you.

tony@luma-energy.co.uk