Almost every electricity supplier has a green electricity tariff aimed at customers who want to buy renewable energy.

It’s worth bearing in mind that over a third of Britain’s electricity is generated by wind, solar or hydro. Therefore, regardless of which tariff you’re on, at least some renewable energy is part of the mix.

What is a green electricity tariff?

A tariff is labelled as green if some or all of the power is generated from a verified renewable energy source. For example, a wind farm, solar array or hydroelectric power station.

But how green are they? The answer is that they vary. Some are genuinely all-renewable, others are something of a half-way house, and others aren’t really green at all.

To ensure your energy genuinely comes from renewable sources, look at the small print of the ‘green’ tariff.

Rogue REGOs

Some suppliers claim to have a ‘100% renewable’ tariff, whereas in fact it’s no different from the general energy mix supplied by the grid.

How can they do this?

They can do it because for every mega-watt hour (MWh) of renewable electricity generated, a Renewable Energy Guarantee of Origin (REGO) certificate, is assigned to it. If it wants to, an energy company can buy the REGOs along with the renewable energy to prove that the electricity is from a renewable source. But if it doesn’t, the REGOs, which carry a small additional cost, can be sold separately.

It means these REGOs are now available to other energy suppliers. They can assign them to units of energy they sell to the public, and by doing so claim to have a ‘100% renewable’ tariff.

Critics refer to this practice as ‘greenwash’. The customer believes they’re supporting renewable energy generation. But in reality, their supplier has merely bought up unwanted REGO certificates and is using a market mechanism to undercut genuinely green suppliers without investing in any new renewable capacity.

Mixed supply 

Some of the larger electricity suppliers are also electricity generators. They own and manage wind and solar farms but also gas or coal-powered power stations.

Their standard tariff will provide customers with electricity from this mix of sources. Meanwhile, their green tariff will be backed up by the REGOs from their renewable electricity generation.

Unless this company has a business plan committing to expanding renewable generation and winding down non-renewables, their green tariffs are unlikely to stimulate the development of new renewables.

That’s because if more of their customers sign up to their green tariff, instead of buying or generating more renewable energy, the company can simply divert more of their existing green energy supply to the green tariff and make their standard tariffs ‘dirtier’, in carbon accounting terms. The mix of fossil fuels and renewables hasn’t changed, merely assigned to different customers.

If you really want to make sure you are using green electricity, the best way to do this is by making sure you are using your electricity at the time when the grid is generating mostly renewable power. Generally ‘time of use’ tariffs will be cheaper at times when renewable generation is high and demand is low so they can offer not just greener but cheaper energy, provided you can be flexible with your usage.

Green energy tariffs UK

The greenest tariffs come from suppliers that buy renewable electricity and its accompanying REGO certificates directly from renewable generators.

The most significant of these are Good Energy, 100Green, Octopus and Ecotricity. These four companies provide significantly greater support for the development of the renewables industry than the others. So if supporting renewable energy is important to you, they are a good place to start. (See also the Energy Saving Trust and Which?).

Of course, green electricity comes with a price, and for some households a cheaper non-green tariff may be more appropriate.

The reason that green electricity is more expensive is that green energy suppliers carry higher operating costs than greenwashed or mixed-tariff providers. For example, they invest in detailed forecasting and demand-management processes to ensure that renewable energy generation matches actual customer demand as closely as possible.

These additional costs are recognised by Ofgem, who therefore exempt Good Energy, 100Green and Ecotricity from the energy price cap.