When your supplier is selling you a ‘green tariff’, what does this actually means for the electricity you will be supplied with? Renewable, green, and clean energy tariffs are growing in popularity as more people become conscious of the environmental impact their choices may have.
Using green energy can:
- help reverse climate damage,
- protect the ozone layer as it generates no carbon emissions, and
- reduce some types of air pollution.
This is all very attractive to a customer who may be wanting to reduce their carbon footprint, and thus green tariffs have greatly increased in the energy market over the last three years as you can see below:
|Year||% of Green Tariffs on the market|
However, recent research suggests that ‘green tariffs’ offered by companies claiming to be selling you renewable energy may not actually be what they seem.
In a recent survey the following conclusions were established:
|% of Customers||Opinion on Green Tariffs|
|33||Believe that buying a green or renewable energy tariff means that the energy supplied to their home in 100% renewable or green|
|11||Believe that the supplier generates some of the renewable energy that it sells|
|8||Believe that the supplier generates all of the renewable energy that it sells|
So, it seems that most customers who are on renewable tariffs are expecting their energy supply to be exclusively, or mostly, generated from a renewable source.
But this is not the case.
It is not technically possible for renewable power exclusively to be delivered to your home. The only exception to this is if you self-supply with solar panels, meaning you a directly connected to a renewable energy generator.
The energy you use is the same as the energy a neighbouring business uses. Your energy supply is actually supplied regardless of the tariff you are on.
Unlike what most customers seem to believe (due to clever marketing from suppliers) it is not possible for some businesses to be delivered the renewable energy electrons, and the non-renewable electrons to be delivered to another business who do not have a green tariff.
Electricity comes from The National Grid which is a sort of mixing pot of all the electricity generated. 39.5% of the UK’s energy is generated from renewable sources, but all the energy generated is mixed together into the National Grid’s supply.
This means that the green tariff you are on does not mean the energy you are supplied with is ‘green’ energy.
As aforementioned, suppliers do not make navigating the energy world any easier. Many suppliers use misleading information to suggest to customers that the energy they are being supplied with is 100% green. Below are some examples of phrasing used by suppliers in their marketing:
- 100% renewable energy,
- clean energy,
- environmental benefit,
- 100% carbon neutral,
- 100% wind electricity,
- green energy,
- green electricity,
- green tariff,
- renewable electricity,
- renewable power,
- renewable sources.
And yet, as we know, the energy these suppliers are actually providing to your business is not ‘100% green’.
The Meaning of Green
Although many tariffs make claims on renewable and green generation, only 4 companies generate their own green energy and only 6 have a parent company that generates for them.
Around 15 companies buy some or all of their renewable energy directly from generators using contracts called Power Purchase Agreements (PPAs) which are important as they sustain renewable generators with enough income to keep running.
Other companies will buy their energy from the wholesale market but also buy certificates called REGO certificates (Renewable Energy Guarantee of Origins). These certificates show that the company has bought the amount of wholesale renewable energy from the grid as their customers on green tariffs have paid for.
According to Ofgem rules, firms who are unclear or intentionally ambiguous about their energy sources are not actually doing anything wrong. However, companies are not being clear enough about their energy practices to help customers make an informed decision about their tariffs and their supplier.
Here at Energy Solutions, we can help. The best way to be certain you’re getting a great deal on your business electricity is to allow us to support you by getting in touch.